ProQuest Company - Securities Class Action

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Copyright (c) 2001
Stanford Law School

ProQuest Company Summary: The judge granted preliminary approval of the settlement on November 20, 2008. A fairness hearing is set for March 12, 2009 where members of the class will be able to voice their objections to the settlement prior to a final ruling.

Discovery continued over the course of a year until parties filed a Stipulation of Settlement on November 12, 2008. As part of the agreement to drop claims against the company and its officers, the defendants will establish a settlement fund of $20 million, to be paid within 10 days of preliminary approval. Plaintiffs' attorneys intend to apply for fees of 30% and reimbursement of expenses of $285,000. According to Voyager Learning Company's Annual Report submitted on September 17, 2008, the settlement will largely be funded by insurers.

According to an article November 13, 2007, Judge Avern Cohn of the Eastern District of Michigan last week denied ProQuest and its executives' motions to dismiss the case, ruling that the company's shareholders had provided sufficient evidence to let the case proceed. The suit, which consolidated four shareholder cases, accused the publishing company of failing to have adequate accounting controls which led to earnings restatements and stock price plunges.

On May 2, 2006, the Court entered the Stipulation and Order U.S. District Judge Avern Cohn granting the motion to consolidate the related actions and to appoint lead plaintiffs and to approve lead plaintiffs’ choice of co-lead counsel. On July 17, 2006, the plaintiffs filed a Consolidated Class Action Complaint. The defendants responded by filing motions to dismiss the Consolidated Class Action Complaint.

The original Complaint alleges defendants violated federal securities laws by issuing a series of materially false statements regarding ProQuest's financial condition. Specifically, defendants concealed the following facts: (i) the Company lacked requisite internal controls, and, as a result, the Company's projections and reported results were based upon defective assumptions and/or manipulated facts; and (ii) the Company's financial statements were materially misstated due to its failure to properly defer income and royalty payments and its improper capitalization of royalty expenses, thereby overstating its revenue and income from at least 1999 to 2005.

The complaint further alleges that on or around February 9, 2006, prior to the market opening, ProQuest announced that it had discovered material irregularities in its accounting and would have to restate certain of its previously issued financial statements. As a result of the irregularities, the Company's deferred income and accrued royalty accounts were materially understated in previously issued financial statements and its prepaid royalty account was materially overstated. On this news, ProQuest's stock fell almost 18% from the previous day's close to close at $24.19 per share. During the Class Period, ProQuest traded as high as $37.89 per share on April 12, 2005.

The lawsuit was filed on behalf of all persons who purchased or acquired the common stock of ProQuest Company during the Class Period, and including those who acquired ProQuest through its acquisition of Voyager Expanded Learning.

INDUSTRY CLASSIFICATION:
SIC Code: 2741
Sector: Services
Industry: Printing & Publishing

COMPANY/ISSUER NAME:	ProQuest Company
COMPANY/ISSUER TICKER:	PQE
COMPANY WEBSITE:	http://www.proquestcompany.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Industry City Associates Employee Pension Plan Trust Money Purchase U/A 03/10/1986, et al. v. ProQuest Company, et al.

COURT: E.D. Michigan	DOCKET NUMBER: 06-CV-10619
JUDGE NAME: Hon. Avern Cohn
DATE FILED: 02/10/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 01/09/2003	CLASS PERIOD END: 02/08/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Brodsky & Smith, LLC (former Pennysylvania) 11 Bala Avenue, Suite 39, Bala Cynwyd, PA, 19004 (voice) 610.668.7987, (fax) 610.660.0450, esmith@Brodsky-Smith.com Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC) 1100 New York Avenue, N.W., Suite 500, West Tower, Washington, DC, 20005 (voice) 202.408.4600, (fax) 202.408.4699, lawinfo@cmht.com Dyer & Shuman, LLP 801 E. 17th Avenue, Denver, CO, 80218-1417 (voice) 303.861.3003, (fax) 800.711.6483, info@dyershuman.com Federman & Sherwood (Oklahoma City) 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Kahn Gauthier Swick, LLC (New Orleans) 650 Poydras St. Suite 2150, New Orleans, LA, 70130 (voice) 504.455.1400, (fax) , lewis.kahn@kglg.com Law Offices of Charles J. Piven, P.A. World Trade Center-Baltimore,401 East Pratt Suite 2525, Baltimore, MD, 21202 (voice) 410.332.0030, (fax) , pivenlaw@erols.com Lerach Coughlin Stoia Geller Rudman & Robbins LLP (San Diego) 655 West Broadway, Suite 1900, San Diego, CA, 92101 (voice) 619.231.1058, (fax) 619.231.7423, Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com Smith & Smith LLP 3070 Bristol Pike, Suite 112, Bensalem, PA, 19020 (voice) 215.638.4847, (fax) 215.638.4867, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 10

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 02/10/2006
Stipulation And Order To: (1) Consolidate The Related Actions; (2) Appoint Lead Plaintiffs; And (3) Approve Lead Plaintiffs' Choice Of Co-Lead Counsel And Liaison Counsel
Type: Order Appointing LP/LC		Date on the document: 05/02/2006

REFERENCE COMPLAINT

In Re: ProQuest Company Securities Litigation

COURT: E.D. Michigan	DOCKET NUMBER: 06-CV-10619
JUDGE NAME:
DATE FILED: 07/17/2006	SOURCE: Docket
CLASS PERIOD START: 02/20/2001	CLASS PERIOD END: 04/27/2006
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Kaplan Fox & Kilsheimer, LLP (former New York, NY) 805 Third Avenue, 22nd Floor, New York, NY, 10022 (voice) 212.687.1980, (fax) 212.687.7714, info@kaplanfox.com Schiffrin & Barroway LLP 3 Bala Plaza E, Bala Cynwyd, PA, 19004 (voice) 610.667.7706, (fax) 610.667.7056, info@sbclasslaw.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint
Type: Complaint		Date on the document: 07/17/2006
US District Court Civil Docket
Type: Docket		Date on the document: 10/19/2006
Stipulation And Agreement Of Settlement
Type: Settlement		Date on the document: 11/12/2006
First Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 01/24/2007
Memorandum And Order Denying Defendants Motions To Dismiss
Type: Order		Date on the document: 11/06/2007
Order Preliminarily Approving Settlement
Type: Order		Date on the document: 11/20/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 11/21/2008

OTHER DOCUMENTS
Class Action Complaint
Case Name and/or Number: Betty O'Connell, et al, vs. Proquest Company, et al.
Type: Complaint		Date on the document: 02/17/2006

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