Harman International Industries, Inc. - Securities Class Action

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Harman International Industries, Inc. Summary: According to the docket, on August 15 the judge entered a minute order vacating his previous order to dismiss the case in light of an October 2007 order providing plaintiffs an opportunity to respond to the original motion to dismiss the non-consolidated action, which they never did. The case was ordered re-opened and continues as of August 18, 2008.

Of February 15, 2008 all related cases were consolidated and the judge appointed lead plaintiffs and approved selection of lead counsel. A First Consolidated Class Action Complaint was filed on May 2, 2008 and quickly met by defendants' motion to dismiss. The defendants successfully argued the motion and the judge ordered the case dismissed with prejudice on August 8, 2006.

According to a press release dated October 1, 2007, the complaint charges Harman and several of its officers and directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”). It is alleged that defendants omitted or misrepresented material adverse facts about the Company’s financial condition, business prospects, and revenue expectations during the Class Period. Harman claims to be a leading manufacturer of high-quality, high fidelity audio products and electronic systems for the automotive, consumer and professional markets in the Americas, Europe, and Asia. The Company operates under the brands names Harman Kardon, JBL, Revel, Mark Levinson, Infinity, Lexicon, Soundcraft-Studer, AKG, Becker, and QNX, and is traded on the New York Stock Exchange.

The complaint alleges that on April 26, 2007, the Company announced that it had entered into a contract in which two investment funds affiliated or sponsored by private investment companies, Kohlberg Kravis Roberts & Co. L.P. (“KKR”) and GS Capital Partners VI Fund, L.P. (“GSCP”) (KKR and GSCP are collectively referred to as the “Purchasing Companies” herein), would merge with Harman (the “Merger”). According to the complaint, the Merger was valued at approximately eight billion dollars ($8,000,000,000).

Specifically, the complaint alleges that, during the Class Period, defendants issued numerous materially false and misleading statements which caused Harman’s securities to trade at artificially inflated prices. As alleged in the complaint, these statements were materially false and misleading because they misrepresented and failed to disclose that: (1) the Company had breached the Merger agreement with KKR and GSCP and thus placed the Merger in serious doubt; (2) the Company needed to sustain higher research and development (“R&D”) costs primarily related to its automotive platform awards; (3) the Company’s inventory was greater than disclosed and was negatively impacting its cash flows; (4) its relationship with Daimler-Chrysler had materially worsened; (5) a material adverse change in Harman's business had occurred which related to capital spending; (6) the Company’s financial health had generally deteriorated; and (7) as a result of the foregoing, the Company’s statements about its financial well-being, earnings, and future prospects were lacking in a reasonable basis when made.

According to the complaint, on September 21, 2007, the Company shocked the market and announced that the Purchasing Companies “no longer intend to complete the previously announced acquisition . . . KKR and GSCP have informed Harman that they believe that a material adverse change in Harman's business has occurred, that Harman has breached the merger agreement and that they are not obligated to complete the merger.” The complaint alleges that this news caused the Company’s share price to fall from a closing price of $112.25 on September 20, 2007, to close at $85.00 on September 21, 2007, on unusually heavy volume. Then, on September 24, 2007, the complaint alleges that the Company announced that it would fail to meet its financial guidance for the quarter ended September 30, 2007, and needed to significantly reduce its estimates for the FY 2008. According to the complaint, this news caused the Company’s share price to fall to $80.31 on extremely high volume of over 14.5 million shares.

INDUSTRY CLASSIFICATION:
SIC Code: 3651
Sector: Consumer Cyclical
Industry: Audio & Video Equipment

COMPANY/ISSUER NAME:	Harman International Industries, Inc.
COMPANY/ISSUER TICKER:	HAR
COMPANY WEBSITE:	http://www.harman.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Cheolan Kim, et al. v. Harman International Industries, Inc., et al.

COURT: D. District Columbia	DOCKET NUMBER: 07-CV-01757
JUDGE NAME: Hon. Richard W. Roberts
DATE FILED: 10/1/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 4/26/2007	CLASS PERIOD END: 9/24/2007
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
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 Paskowitz & Associates 60 East 42nd Street, 46th Floor, New York, NY, 10165 (voice) 212.685.0969, (fax) 212.685.2306, classattorney@aol.com Roy Jacobs & Associates 350 Fifth Avenue Suite 3000 , New York, NY, 10118 (voice) , (fax) , classattorney@pipeline.com _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 3

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint - Jury Trial Demanded
Type: Complaint		Date on the document: 10/01/2007
First Amended Class Action Complaint
Type: Complaint		Date on the document: 1/16/2008
Order Appointing Lead PLaintiff And Approving Selection Of Lead Counsel
Type: Order Appointing LP/LC		Date on the document: 2/14/2008

REFERENCE COMPLAINT

In Re: Harman International Industries, Inc. Securities Litigation

COURT: D. District Columbia	DOCKET NUMBER: 07-CV-01757
JUDGE NAME: Hon. Richard W. Roberts
DATE FILED: 5/2/2008	SOURCE: Docket
CLASS PERIOD START: 4/26/2007	CLASS PERIOD END: 2/5/2008
TYPE OF COMPLAINT: Complaint (Unamended and Unconsolidated)
PLAINTIFF FIRMS NAMED IN COMPLAINT:
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 _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 1

DOCUMENTS FOR THE REFERENCE COMPLAINT
Consolidated Class Action Complaint
Type: Complaint		Date on the document: 5/2/2008
Defendants' Motion To Dismiss The Consolidated Class Action Complaint
Type: Motion		Date on the document: 7/3/2008
Order
Type: Order		Date on the document: 8/6/2008
U.S. District Court Civil Docket
Type: Docket		Date on the document: 8/6/2008

OTHER DOCUMENTS

Case Name and/or Number:
Type:		Date on the document:

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