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_______________
Copyright (c) 2001
Stanford Law School


OrthoClear Holdings, Inc.
Summary: The original Complaint alleges that the directors and certain officers of OrthoClear deceived investors by failing to disclose that OrthoClear's business was substantially based on patents and other intellectual property stolen from Align Technology, Inc. The Complaint also alleges that investors were misled about the nature and prospects for litigation brought by Align, and that after settling with Align, OrthoClear unlawfully distributed a substantial portion of the settlement funds to venture capital investor, 3i Group PLC.

The Complaint alleges that within weeks of OrthoClear's launch, Align Technology -- OrthoClear's sole competitor -- filed multiple law suits alleging OrthoClear had stolen Align's intellectual property, infringed its patents and used its propriety customer information without consent. OrthoClear Holdings raised $10-20 million from investors in private placements of Class A, B, and C Preferred Convertible Shares, while assuring potential investors that Align's claims and lawsuits were wholly without merit.

On the eve of first trial between Align and OrthoClear (and without warning) OrthoClear abandoned its defense of the Align litigation, announcing that it had entered into a settlement that required it to assign its intellectual property to Align and exit the orthodontic aligner business in return for a payment of only $20 million. In a letter to shareholders in October 2006, OrthoClear admitted for the first time that it was likely to lose the litigation with Align, and further acknowledged that the costs of prosecuting and defending the Align lawsuits were prohibitive.

The Complaint alleges that false and fraudulent statements made in OrthoClear's Purchase Agreements, press releases, and oral presentations assured that the operation of OrthoClear's business did not infringe any patent or other proprietary right of Align. The Complaint further alleges that, instead of using the $20 million for the benefit of all its shareholders, OrthoClear unlawfully refunded all or a significant portion of the $10 million investment made by 3i. It is alleged this distribution violated OrthoClear's own Memorandum of Association and applicable laws governing corporate distributions. It is also alleged this action constituted a breach of fiduciary duty by OrthoClear's current and former directors.

NOTE: The Class consists of investors who purchased Class A, B and C Preferred Convertible Shares between January 2005 and September 2006.

On April 12, 2007, the plaintiffs filed a First Amended Class Action Complaint and later filed a Second Amended Complaint on July 24, 2007. On August 7, 2007, certain defendants filed a motion to dismiss Counts III, V and VIII of Plaintiffs' Second Amended Class Action Complaint. On October 26, 2007, defendants filed a motion to dismiss the Second Amended Complaint. By the Order issued by U.S. District Judge Jeffrey S. White on January 18, 2008, the Court grants Defendants OrthoClear and the D&O Defendants’ motion to dismiss and 3i and Badawi’s motion to dismiss. This ruling is without prejudice to Plaintiffs filing a third amended complaint.

On February 19, 2008, the plaintiffs filed a Third Amended Class Action Complaint. On March 24, 2008, the defendants filed motions to dismiss the Third Amended Complaint. On February 27, 2009, District Court Judge Jeffrey S. White granted the defendants’ motions to dismiss without leave to amend. Judgment was entered in favor of Defendants and against Plaintiffs. The case is now closed.

On March 26, 2009, the plaintiffs filed a Notice of Appeal as to the Judgment and Order dismissing the action. According to the Mandate from the Ninth Circuit Court of Appeals entered on April 23, 2010, the parties have stipulated to the dismissal of this appeal under Fed. R. App. P. 42(b). This appeal is dismissed.
INDUSTRY CLASSIFICATION:
SIC Code: 3842
Sector: Healthcare
Industry: Medical Equipment & Supplies

COMPANY/ISSUER NAME: OrthoClear Holdings, Inc.
COMPANY/ISSUER TICKER:
COMPANY WEBSITE: http://www.orthoclear.com/
FIRST IDENTIFIED COMPLAINT IN THE DATABASE
Michael B. Eshelman, D.D.S., et al. v. OrthoClear Holdings, Inc., et al.
 COURT: N.D. California  DOCKET NUMBER: 07-CV-1429
 JUDGE NAME: Hon. Jeffrey S. White
 DATE FILED: 03/12/2007  SOURCE: Notice of Filing
 CLASS PERIOD START: 01/01/2005  CLASS PERIOD END: 09/30/2006
 TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
 PLAINTIFF FIRMS NAMED IN COMPLAINT:
  • Sparer Law Group
      100 Pine Street, 33rd Floor, San Francisco, CA, 94111
       (voice) 415.217.7300, (fax) 415.217.7307, info@sparerlaw.com
    _____________________________________________
     TOTAL NUMBER OF PLAINTIFF FIRMS:  1

    •  DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
    Class Action Complaint - Demand for Jury Trial
    Type: Complaint Date on the document: 03/12/2007
    REFERENCE COMPLAINT
    Michael B. Eshelman, D.D.S., et al. v. OrthoClear Holdings, Inc., et al.
     COURT: N.D. California  DOCKET NUMBER: 07-CV-1429
     JUDGE NAME: Hon. Jeffrey S. White
     DATE FILED: 02/19/2008  SOURCE: Docket
     CLASS PERIOD START: 01/01/2005  CLASS PERIOD END: 09/30/2006
     TYPE OF COMPLAINT: Third Amended
     PLAINTIFF FIRMS NAMED IN COMPLAINT:
  • Sparer Law Group
      100 Pine Street, 33rd Floor, San Francisco, CA, 94111
       (voice) 415.217.7300, (fax) 415.217.7307, info@sparerlaw.com
    _____________________________________________
     TOTAL NUMBER OF PLAINTIFF FIRMS:  1

    •  DOCUMENTS FOR THE REFERENCE COMPLAINT
    First Amended Class Action Complaint - Demand for Jury Trial
    Type: Complaint Date on the document: 04/12/2007
    Stipulation And [Proposed] Order To Reschedule Case Management Conference
    Type: Order Date on the document: 05/25/2007
    Stipulation And Order To Reschedule Case Management Conference
    Type: Order Date on the document: 05/29/2007
    Certificate Of Service By Mail
    Type: Other Date on the document: 06/01/2007
    Order Granting Application For Admission Of Attorney Holly J. Caldwell Pro Hac Vice
    Type: Order Date on the document: 06/05/2007
    Order Granting Application For Admission Of Attorney Peter L. Welsh Pro Hac Vice
    Type: Order Date on the document: 06/05/2007
    Stipulation Re Date Of Response For Defendants 3i Technology Partners III, L.P. And Paul Badawi
    Type: Other Date on the document: 06/19/2007
    Order Granting Application For Admission Of Attorney Randall W. Bodner Pro Hac Vice
    Type: Order Date on the document: 06/20/2007
    [Proposed] Order Granting Application For Admission Of Attorney Randall W. Bodner Pro Hac Vice
    Type: Order Date on the document: 06/20/2007
    Notice of Appearance
    Type: Notice Date on the document: 06/26/2007
    ADR Certification By Parties and Counsel
    Type: Other Date on the document: 07/20/2007
    Stipulation And [Proposed] Order Selecting ADR Process
    Type: Order Date on the document: 07/20/2007
    Stipulation And Order Selecting ADR Process
    Type: Order Date on the document: 07/23/2007
    Second Amended Class Action Complaint
    Type: Complaint Date on the document: 07/24/2007
    Clerk's Notice
    Type: Notice Date on the document: 07/25/2007
    Clerk's Notice
    Type: Notice Date on the document: 07/25/2007
    Stipulation Regarding Filing Of Second Amended Complaint
    Type: Other Date on the document: 07/30/2007
    Declaration Of Peter Welsh In Support Of Defendants 3i Technology Partners III, LP And Paul Badawi’s Motion To Dismiss Counts III, V And VIII Of Plaintiffs’ Second Amended Class Action Complaint
    Type: Declaration Date on the document: 08/07/2007
    Defendants 3i Technology Partners III, LP And Paul Badawi's Notice Of Motion And Motion To Dismiss Counts III, V And VIII Of Plaintiffs' Second Amended Class Action Complaint; Memorandum Of Points And Authorities
    Type: Motion Date on the document: 08/07/2007
    [Proposed] Order Granting Defendants 3i Technology Partners III, LP And Paul Badawi's Motion To Dismiss Counts III, V And VIII Of Plaintiffs' Second Amended Class Action Complaint
    Type: Order Date on the document: 08/07/2007
    Clerk's Notice
    Type: Notice Date on the document: 08/08/2007
    Declaration Of Marc Haber In Support Of Motion To Shorten Time And In Support Of Motion To Limit OrthoClear's Contacts With Potential Class Members And For Corrective Actions
    Type: Declaration Date on the document: 08/20/2007
    Motion To Limit OrthoClear' S Contacts With Potential Class Members And For Corrective Actions
    Type: Motion Date on the document: 08/20/2007
    [Proposed] Order Granting Motion To Limit OrthoClear's Contacts With Potential Class Members And For Corrective Actions
    Type: Order Date on the document: 08/20/2007
    Request For Judicial Notice In Support Of Motion To Limit OrthoClear's Contacts With Potential Class Members And For Corrective Actions
    Type: Other Date on the document: 08/20/2007
    Stipulated Request And [Proposed] Order Shortening Time
    Type: Order Date on the document: 08/20/2007
    Stipulated Request And Order Shortening Time
    Type: Order Date on the document: 08/21/2007
    Notice of Appointment of Mediator
    Type: Notice Date on the document: 08/22/2007
    Corrected – Defendant OrthoClear Holdings, Inc. Memorandum Of Points And Authorities In Opposition To Plaintiffs' Motion To Limit Contacts With Potential Class Members And For Corrective Actions
    Type: Memorandum Date on the document: 08/27/2007
    Corrected Declaration Of Dorothy L. Fernandez In Support Of Opposition To Plaintiffs' Motion To Limit Contacts With Potential Class Members And For Corrective Actions
    Type: Declaration Date on the document: 08/27/2007
    Declaration Of Dorothy L. Fernandez In Support Of Opposition To Plaintiffs' Motion To Limit Contacts With Potential Class Members And For Corrective Action
    Type: Declaration Date on the document: 08/27/2007
    Defendant OrthoClear Holdings, Inc. Memorandum Of Points And Authorities In Opposition To Plaintiffs' Motion To Limit Contacts With Potential Class Members And For Corrective Actions
    Type: Memorandum Date on the document: 08/27/2007
    [Proposed] Order Re Plaintiffs' Motion To Limit OrthoClear's Contacts With Potential Class Members And For Corrective Actions
    Type: Order Date on the document: 08/27/2007
    Reply In Support Of Motion To Limit OrthoClear's Contacts With Potential Class Members And For Corrective Actions
    Type: Other Date on the document: 08/29/2007
    Notice of Supplemental Authority In Support Of Motion To Limit Orthoclear's Contacts With Potential Class Members And For Corrective Actions
    Type: Notice Date on the document: 8/30/2007
    Minute Order
    Type: Order Date on the document: 08/31/2007
    Order Denying Plaintiffs’ Motion To Limit OrthoClear’s Contacts With Potential Class Members And For Corrective Action
    Type: Order Date on the document: 09/04/2007
    Notice Of Appearance As Counsel For Ocumenta Capital Holdings, Inc., Ocumenta, Inc., Muhammad Ziaullah Chishti, Huafeng "Charles" Wen, Peter Riepenhausen, Arthur T. Taylor, Saiyed Atiq Raza, And Joseph Breeland
    Type: Notice Date on the document: 09/07/2007
    Declaration Of Marc Haber In Support Of Motion To Extend Time
    Type: Other Date on the document: 9/10/2007
    Stipulated Request And Proposed Order Extending Time
    Type: Other Date on the document: 9/10/2007
    Stipulated Request And Order Extending Time
    Type: Order Date on the document: 09/11/2007
    Declaration Of Charles R. Rice In Support Of Motion To Dismiss Second Amended Complaint
    Type: Declaration Date on the document: 10/26/2007
    Defendant Christopher Kawaja's Joinder In Motion To Dismiss Second Amended Complaint (Under F.R.C.P. 12(b)(6))
    Type: Other Date on the document: 10/26/2007
    Notice Of Motion And Motion To Dismiss Second Amended Complaint; Memorandum Of Points And Authorities
    Type: Motion Date on the document: 10/26/2007
    [Proposed] Order Granting Motion To Dismiss Second Amended Complaint
    Type: Order Date on the document: 10/26/2007
    Request For Judicial Notice In Support Of Motion To Dismiss Second Amended Complaint
    Type: Other Date on the document: 10/26/2007
    Clerk's Notice
    Type: Notice Date on the document: 10/30/2007
    Clerk's Notice Re: Failure To File Electronically And/Or Register As An E-Filer
    Type: Notice Date on the document: 10/30/2007
    Declaration Of James S. Nabwangu In Opposition To Defendant OrthoClear's Motion To Dismiss
    Type: Declaration Date on the document: 11/09/2007
    Declaration Of James S. Nabwangu In Opposition To Defendants 3i's And Badawi's Motion To Dismiss
    Type: Declaration Date on the document: 11/09/2007
    Exhibit A
    Type: Other Date on the document: 11/09/2007
    Plaintiffs' Opposition To Defendant OrthoClear's Motion To Dismiss
    Type: Other Date on the document: 11/09/2007
    Plaintiffs' Opposition To Defendants 3i's And Badawi's Motion To Dismiss
    Type: Other Date on the document: 11/09/2007
    [Proposed] Order Denying Defendant OrthoClear's Motion To Dismiss
    Type: Order Date on the document: 11/09/2007
    [Proposed] Order Denying Defendants 3i's And Badawi's Motion To Dismiss
    Type: Order Date on the document: 11/09/2007
    Request For Judicial Notice In Support Of Plaintiffs' Opposition To Defendant OrthoClear's Motion To Dismiss
    Type: Other Date on the document: 11/09/2007
    Request For Judicial Notice In Support Of Plaintiffs' Opposition To Defendants 3i's And Badawi's Motion To Dismiss
    Type: Other Date on the document: 11/09/2007
    Corrected Declaration Of James S. Nabwangu In Opposition To Defendant OrthoClear’s Motion To Dismiss
    Type: Declaration Date on the document: 11/13/2007
    Corrected Declaration Of James S. Nabwangu In Opposition To Defendants 3i's And Badawi's Motion To Dismiss
    Type: Declaration Date on the document: 11/13/2007
    Defendant Christopher Kawaja's Joinder In Reply To Opposition To Motion To Dismiss Second Amended Complaint
    Type: Motion Date on the document: 11/16/2007
    Defendant Patricia H. Seifert's Joinder In Defendants' Reply To Opposition To Motion To Dismiss Second Amended Complaint
    Type: Other Date on the document: 11/16/2007
    Reply Brief Of Defendants 3i Technology Partners, LP And Pauld Badawi In Support Of Motion To Dismiss
    Type: Other Date on the document: 11/16/2007
    Reply To Opposition To Motion To Dismiss Second Amended Complaint
    Type: Other Date on the document: 11/16/2007
    Certification And Notice Of Interested Parties (Civil L.R. 3-16)
    Type: Other Date on the document: 12/26/2007
    Certification Of Interested Entities Or Persons
    Type: Other Date on the document: 12/26/2007
    Certification And Notice Of Interested Parties (Civil L.R. 3-16)
    Type: Other Date on the document: 12/27/2007
    Certification Of Non-Interested Entities Or Persons
    Type: Other Date on the document: 12/28/2007
    Joint Case Management Statement And [Proposed] Order
    Type: Order Date on the document: 12/28/2007
    Notice Of Tentative Ruling And Questions
    Type: Notice Date on the document: 01/03/2008
    Plaintiffs' Notice Of Intent To Rely On Authorities Not Cited In Oppositions To Defendants' Motions To Dismiss
    Type: Notice Date on the document: 01/03/2008
    Defendants 3i Technology Partners III, LP And Paul Badawi's Notice Of Intent To Rely On Authorities Not Cited In Defendants' Motion To Dismiss
    Type: Notice Date on the document: 01/04/2008
    Minute Order
    Type: Order Date on the document: 01/04/2008
    Order Granting Motions To Dismiss
    Type: Order Date on the document: 01/18/2008
    Third Amended Class Action Complaint
    Type: Complaint Date on the document: 02/19/2008
    Declaration Of Jason P. Lee In Support Of Stipulated Request And [Proposed] Order Extending Time
    Type: Declaration Date on the document: 02/28/2008
    Stipulated Request And [Proposed] Order Extending Time
    Type: Order Date on the document: 02/28/2008
    Stipulated Request And Order Extending Time
    Type: Order Date on the document: 02/28/2008
    Declaration Of Edith R. Matthai In Support Of Motion To Dismiss Third Amended Complaint
    Type: Declaration Date on the document: 03/24/2008
    Declaration Of Joseph V. Mauch In Support Of Motion To Dismiss Third Amended Complaint
    Type: Declaration Date on the document: 03/24/2008
    Declaration Of Peter Welsh In Support Of Defendants 3i Technology Partners III, LP And Paul Badawi's Motion To Dismiss Plaintiffs' Third Amended Class Action Complaint And Request For Judicial Notice
    Type: Declaration Date on the document: 03/24/2008
    Defendant Patricia H. Seifert's Notice Of Motion And Motion To Dismiss Third Amended Complaint; Memorandum Of Points And Authorities
    Type: Motion Date on the document: 3/24/2008
    Defendant Patricia H. Seifert's Request For Judicial Notice In Support Of Motion To Dismiss Third Amended Complaint
    Type: Other Date on the document: 3/24/2008
    Defendants 3i Technology Partners III, LP And Paul Badawi's Notice Of Motion And Motion To Dismiss Plaintiffs' Third Amended Class Action Complaint; Memorandum Of Points And Authorities
    Type: Motion Date on the document: 3/24/2008
    Notice Of Motion And Motion To Dismiss Third Amended Complaint; Memorandum Of Points And Authorities
    Type: Motion Date on the document: 3/24/2008
    [Proposed] Order Granting Defendants 3i Technology Partners III, LP And Paul Badawi's Motion To Dismiss Plaintiffs' Third Amended Class Action Complaint
    Type: Order Date on the document: 3/24/2008
    [Proposed] Order Granting Motion To Dismiss Third Amended Complaint
    Type: Order Date on the document: 3/24/2008
    [Proposed] Order Re: Defendant Patricia H. Seifert's Motion To Dismiss Third Amended Complaint
    Type: Order Date on the document: 3/24/2008
    Request For Judicial Notice In Support Of Motion To Dismiss Third Amended Complaint
    Type: Other Date on the document: 3/24/2008
    Declaration Of James S. Nabwangu In Opposition To Defendants' Motions To Dismiss
    Type: Declaration Date on the document: 4/18/2008
    Plaintiffs' Opposition To Defendant 3i's Motion To Dismiss Third Amended Complaint
    Type: Other Date on the document: 4/18/2008
    Plaintiffs' Opposition To Defendant Orthoclear's Motion To Dismiss Third Amended Complaint
    Type: Other Date on the document: 4/18/2008
    Plaintiffs' Opposition To Defendant Patricia H. Seifert' S Motion To Dismiss Third Amended Complaint
    Type: Other Date on the document: 4/18/2008
    [Proposed] Order Denying Defendants'motions To Dismiss Plaintiffs' Third Amended Complaint
    Type: Order Date on the document: 4/18/2008
    Request For Judicial Notice In Opposition To Defendants' Motions To Dismiss
    Type: Other Date on the document: 4/18/2008
    Declaration Of James S. Nabwangu In Support Of Plaintiffs' Request For Leave To File Supplemental Declaration Of Alan W. Sparer
    Type: Declaration Date on the document: 8/18/2008
    Plaintiffs' Request For Leave To File Supplemental Declaration Of Alan W. Sparer
    Type: Other Date on the document: 8/18/2008
    [Proposed] Order Granting Plaintiffs' Request For Leave To File Supplemental Declaration Of Alan W. Sparer
    Type: Order Date on the document: 8/18/2008
    Order
    Type: Order Date on the document: 02/04/2009
    Third Amended Class Action Complaint (Red-Line)
    Type: Complaint Date on the document: 02/05/2009
    Judgment
    Type: Other Date on the document: 02/27/2009
    Notice Of Appeal
    Type: Notice of Appeal Date on the document: 03/26/2009
    U.S. District Court Civil Docket
    Type: Docket Date on the document: 04/23/2010

     OTHER DOCUMENTS
    Order
    Case Name and/or Number: Michael B. Eshelman, D.D.S., et al. v. OrthoClear Holdings, Inc., et al.
    Type: Order Date on the document: 04/19/2010
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