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Xethanol Corporation Summary: According to a press release dated October 08, 2008, Xethanol Corporation (AMEX: XNL), a renewable energy company, announces that on October 6, 2008, the United States District Court for the Southern District of New York approved the settlement agreement negotiated between Xethanol and a class of plaintiff shareholders who had sued the company on October 24, 2006. The Final Approval Order also dismisses the action, which is now concluded. The settlement agreement was reached on November 28, 2007 during a mediation overseen by a retired United States District Court Judge in West Palm Beach, Florida, and attended by counsel for plaintiffs, counsel for the company and the individual defendants and counsel for the company’s insurance carriers.
On February 7, 2007, the Court entered the Order consolidating several actions under In Re Xethanol Corporation Securities Litigation, 06cv10234. On March 15, 2007, the Court entered the Order appointing the Counsell Group as Lead Plaintiffs and appointing Kahn Gauthier Swick is appointed class counsel. On March 27, 2007, the plaintiffs filed an Amended and Consolidated Class Action Complaint, and the defendants responded by filing a motion to dismiss the Amended and Consolidated Class Action Complaint. On September 7, 2007, Judge Harold Baer denied defendants’ motion to dismiss. On April 29, 2008, a Motion for Settlement Preliminary Approval, filed by The Counsell Group. According the notice of settlement, dated May 29, 2008, a $2,800,000 cash Settlement was proposed. On May 16, 2008, the judge granted the motion for Preliminary Approval of Settlement. The Court certified the Class solely for purposes of this Settlement. A hearing was set on the matter.
The original complaint charges Xethanol and certain of its officers and directors with violations of Section 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder. Throughout the Class Period, Xethanol repeatedly assured investors that it could sustain itself on revenue from corn ethanol production while successfully commercializing biomass ethanol production. In fact, however, as investors have now learned, Xethanol was suffering from a host of undisclosed adverse factors that negatively impacted its business and it appears that they do not have the ability to commercialize biomass ethanol in the foreseeable near term. As investors learned the truth about Xethanol, shares of the Company declined precipitously -- falling from a Class Period high of over $15 per share in April 2006, to less than $4.00 per share by the end of the Class Period. While shares of Xethanol were artificially inflated during the Class Period, certain insiders were able to liquidate millions of dollars of their personally held Xethanol shares.
Particularly, the complaint alleges that Xethanol: (1) misrepresented management's experience and standard of ethics; (2) omitted disclosing a series of related party transactions and association with investors who had alarming records of stock fraud and related shareholder abuses; (3) materially overstated the Company's profitability by under-reporting the true costs associated with completing a biomass to ethanol production facility, and by failing to make proper adjustments to the Company's financial reports; (4) lacked any reasonable basis to assert that the Company was operating according to plan or could achieve the near-term commercialization of biomass ethanol production, or achieve the guidance sponsored and/or endorsed by the Company; and (5) caused plaintiffs and other Class members to purchase Xethanol common stock at artificially inflated prices.
INDUSTRY CLASSIFICATION:
SIC Code: 3250
Sector: Services
Industry: Waste Management Services
| COMPANY/ISSUER NAME: | Xethanol Corporation |
| COMPANY/ISSUER TICKER: | XNL |
| COMPANY WEBSITE: | http://www.xethanol.com |
| FIRST IDENTIFIED COMPLAINT IN THE DATABASE | |||||||||||||||||
| Milton Ariail, et al. v. Xethanol Corporation, et al. | |||||||||||||||||
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| DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT | |||
| Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded | |||
| Type: Complaint | Date on the document: 10/23/2006 | ||
| Order | |||
| Type: Order | Date on the document: 03/14/2007 | ||
| REFERENCE COMPLAINT | |||||||||||||||||
| In Re: Xethanol Corporation Securities Litigation | |||||||||||||||||
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| DOCUMENTS FOR THE REFERENCE COMPLAINT | |||
| Amended Consolidated Class Action Complaint For Violations Of Federal Securities Laws | |||
| Type: Complaint | Date on the document: 3/27/2007 | ||
| Lead Plaintiffs' Motion For Preliminary Approval Of Settlement; Directing Notice Of Pendency And Settlement Of Class Action; And Setting Hearing Date For Final Approval Of Settlement And For Certification Of Settlement Class | |||
| Type: Motion | Date on the document: 4/29/2008 | ||
| Notice Of Pendency Of Class Action And Proposed Settlement With All Defendants. Motion For Attorneys' Fees And Settlement Fairness Hearing | |||
| Type: Notice | Date on the document: 5/29/2008 | ||
| Final Order And Judgment Of Dismissal With Prejudice Of Class Action, Approval Of The Plan Of Allocation, And Award Of Plaintiffs' Counsel's Attorneys' Fees And Reimbursement Of Litigation Expenses | |||
| Type: Order | Date on the document: 10/06/2008 | ||
| U.S. District Court Civil Docket | |||
| Type: Docket | Date on the document: 10/06/2008 | ||
| OTHER DOCUMENTS | |||
| Class Action Complaint - Jury Trial Demanded | |||
| Case Name and/or Number: Joseph Spoto, et al. v. Xethanol Corporation, et al. | |||
| Type: Complaint | Date on the document: 10/31/2006 | ||
| Class Action Complaint For Violations Of Federal Securities Laws | |||
| Case Name and/or Number: Cheryl Difruscio, et al. v. Xethanol Corporation, et al. | |||
| Type: Complaint | Date on the document: 10/31/2006 | ||
| Class Action Complaint for Violations of Federal Securities Laws - Jury Trial Demanded | |||
| Case Name and/or Number: Chad Jones, et al. v. Xethanol Corporation, et al. | |||
| Type: Complaint | Date on the document: 11/10/2006 | ||
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