IMAX Corporation - Securities Class Action

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_______________
Copyright (c) 2001
Stanford Law School

IMAX Corporation Summary: According to a press release dated August 14, 2006, the Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of IMAX securities. During February and March 2006, the company issued press releases touting the Company's financial success, and indicated the Company's willingness to explore financial options. A press release issued as late as May 9, 2006 continued to mislead investors concerning IMAX's true financial condition.

The complaint further alleges that on August 9, 2006, IMAX shocked the market by announcing that it was being investigated by Securities and Exchange Commission ("SEC") regarding revenue-recognition timing. The SEC's inquiry was focused on IMAX's recognition of revenue in the fourth quarter of 2005 in 10 theaters that were not open during that quarter. Further, IMAX said that it had identified a "material weakness" related to revenue-recognition issues in its second- quarter financial report, leading to a reduction in revenue. The press release also stated the Company had yet to find an investor to effectuate a merger or purchase. After these announcements the price of IMAX shares crashed, falling by 40.6%, or $3.91 on the following trading day.

The Complaint alleges that IMAX and its top executives knew during the Class Period that revenue was being improperly recognized, but failed to make the necessary adjustments, thus artificially inflating the stock. The Complaint alleges that to affect a sale or merger of IMAX, and to gain as higher price as possible for IMAX in such a transaction, it was critical that the value of IMAX was perceived to be high. Therefore, IMAX and some of its top executives sought to bolster the share price of the Company by strategically recognizing revenue when it most suited the Company, even when such revenue recognition policies violated recognized accounting principles.

According to the Company’s Form 10-Q for the quarterly period ended September 30, 2009, the Company and certain of its officers and directors were named as defendants in eight purported class action lawsuits filed between August 11, 2006 and September 18, 2006, alleging violations of U.S. federal securities laws. These eight actions were filed in the U.S. District Court for the Southern District of New York. On January 18, 2007, the Court consolidated all eight class action lawsuits and appointed Westchester Capital Management, Inc. as the lead plaintiff and Abbey Spanier Rodd & Abrams, LLP as lead plaintiff’s counsel. On October 2, 2007, plaintiffs filed a consolidated amended class action complaint. The amended complaint, brought on behalf of shareholders who purchased the Company’s common stock between February 27, 2003 and July 20, 2007, alleges primarily that the defendants engaged in securities fraud by disseminating materially false and misleading statements during the class period regarding the Company’s revenue recognition of theater system installations, and failing to disclose material information concerning the Company’s revenue recognition practices. The amended complaint also added PricewaterhouseCoopers LLP, the Company’s auditors, as a defendant. The lawsuit seeks unspecified compensatory damages, costs, and expenses. The defendants filed a motion to dismiss the amended complaint on December 10, 2007. On September 16, 2008, the Court issued a memorandum opinion and order, denying the motion. On October 6, 2008, the defendants filed an answer to the amended complaint. On October 31, 2008, the plaintiffs filed a motion for class certification. Fact discovery on the merits commenced on November 14, 2008 and is ongoing. On March 13, 2009, the Court granted a second prospective lead plaintiff’s request to file a motion for reconsideration of the Court’s order naming Westchester Capital Management, Inc. as the lead plaintiff and issued an order denying without prejudice plaintiff’s class certification motion pending resolution of the motion for reconsideration. On June 29, 2009, the Court granted the motion for reconsideration and appointed Snow Capital Investment Partners, L.P. as the lead plaintiff and Coughlin Stoia Geller Rudman & Robbins LLP as lead plaintiff’s counsel. Westchester Capital Management, Inc, appealed this decision, but the U.S. Court of Appeals for the Second Circuit denied its petition on October 1, 2009.

On April 14, 2011, the Court appointed Merger Fund as Lead Plaintiff and Abbey Spanier Rodd & Abrams LLP as Lead Counsel for the class.

On March 28, 2012, the Court issued the Amended Order Preliminarily Approving Final Settlement And Providing For Notice.

INDUSTRY CLASSIFICATION:
SIC Code: 3861
Sector: Services
Industry: Motion Pictures

COMPANY/ISSUER NAME:	IMAX Corporation
COMPANY/ISSUER TICKER:	IMAX
COMPANY WEBSITE:	www.imax.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Motti Kaplan, et al. v. IMAX Corporation, et al.

COURT: S.D. New York	DOCKET NUMBER: 06-CV-06128
JUDGE NAME: Hon. Naomi Reice Buchwald
DATE FILED: 08/11/2006	SOURCE: Notice of Filing
CLASS PERIOD START: 02/17/2006	CLASS PERIOD END: 08/09/2006
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Abbey Spanier Rodd Abrams & Paradis, LLP (New York) 212 East 39th Street, New York, NY, 10016 (voice) 212-889-3700, (fax) 212-684-519, info@abbeyspanier.com Brower Piven (Baltimore) The World Trade Center-Baltimore. 401 East Pratt Street, Suite 2525, Baltimore, MD, (voice) 410.332.0030, (fax) 410.685.1300, info@browerpiven.com Chimicles & Tikellis LLP (Haverford) 361 West Lancaster Avenue, Haverford, PA, 19041 (voice) 888.805.7848, (fax) 610.649.3633, mail@chimicles.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 Girard Gibbs LLP (San Francisco) 601 California Street, Suite 1400, San Francisco, CA, 94108 (voice) 415.981.4800, (fax) 415.981.4846, mail@girardgibbs.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 Bruce G. Murphy 265 Llwyds Lane, Vero Beach La, FL, 32963 (voice) 561.231.4202, (fax) , Milberg Weiss Bershad & Schulman LLP (New York) One Pennsylvania Plaza, 49th Floor, New York, NY, 10119 (voice) 212.594.5300, (fax) 212.868.1229, info@milbergweiss.com Murray, Frank & Sailer LLP 275 Madison Ave 34th Flr, New York, NY, 10016 (voice) 212.682.1818, (fax) 212.682.1892, email@murrayfrank.com Paskowitz & Associates 60 East 42nd Street, 46th Floor, New York, NY, 10165 (voice) 212.685.0969, (fax) 212.685.2306, classattorney@aol.com Schatz & Nobel, P.C. 330 Main Street, Hartford, CT, 06106 (voice) 800.797.5499, (fax) 860.493.6290, sn06106@AOL.com Wechsler Harwood LLP 488 Madison Avenue 8th Floor, New York, NY, 10022 (voice) 212.935.7400, (fax) , info@whhf.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 13

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Type: Complaint		Date on the document: 08/11/2006
Memorandum And Order
Type: Order of Consolidation		Date on the document: 01/18/2007

REFERENCE COMPLAINT

In Re: IMAX Corporation Securities Litigation

COURT: S.D. New York	DOCKET NUMBER: 06-CV-06128
JUDGE NAME:
DATE FILED: 10/02/2007	SOURCE: Docket
CLASS PERIOD START: 02/27/2003	CLASS PERIOD END: 07/20/2007
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Abbey Spanier Rodd & Abrams, LLP (New York) 212 East 39th Street, New York, NY, 10016 (voice) 212-889-3700, (fax) 212-684-519, info@abbeyspanier.com Abbey Spanier Rodd Abrams & Paradis, LLP (New York) 212 East 39th Street, New York, NY, 10016 (voice) 212-889-3700, (fax) 212-684-519, info@abbeyspanier.com Coughlin Stoia Geller Rudman & Robbins LLP (Melville) 58 South Service Road, Suite 200, Melville, NY, 11747 (voice) 631.367.7100, (fax) 631.367.1173, info@csgrr.com/ _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Amended Class Action Complaint
Type: Complaint		Date on the document: 10/02/2007
Stipulation And Order
Type: Order		Date on the document: 12/04/2007
Notice Of Motion
Type: Notice		Date on the document: 12/10/2007
Notice Of Motion To Dismiss Pursuant To Rules 12(b)(6) And 9(b)
Type: Notice		Date on the document: 12/10/2007
Memorandum And Order
Type: Order		Date on the document: 09/16/2008
Order
Type: Order		Date on the document: 03/13/2009
Memorandum And Order
Type: Order Appointing LP/LC		Date on the document: 06/29/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 07/06/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 03/30/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 12/22/2010
Memorandum and Order
Type: Order		Date on the document: 04/14/2011
U.S. District Court Civil Docket
Type: Docket		Date on the document: 04/14/2011
Amended Stipulation And Agreement Of Settlement Between Settlement Class Members And Imax Corporation, Richard L. Gelfond, Bradley J. Wechsler, Francis T. Joyce, Kathryn A. Gamble And PricewaterhouseCoopers LLP
Type: Settlement		Date on the document: 03/20/2012
Amended Order Preliminarily Approving Final Settlement And Providing For Notice
Type: Order		Date on the document: 03/28/2012
U.S. District Court Civil Docket
Type: Docket		Date on the document: 03/28/2012

OTHER DOCUMENTS
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Michael J. Larosa, et al. v. IMAX Corporation, et al.
Type: Complaint		Date on the document: 08/21/2006
Class Action Complaint for Violation of Federal Securities Laws - Jury Trial Demanded
Case Name and/or Number: Floyd Reynolds, et al. v. IMAX Corporation, et al.
Type: Complaint		Date on the document: 09/05/2006
Class Action Complaint
Case Name and/or Number: Robert B. Gray, et al. v. IMAX Corporation, et al.
Type: Complaint		Date on the document: 09/19/2006

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