LDK Solar Company Ltd. - Securities Class Action

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Copyright (c) 2001
Stanford Law School

LDK Solar Company Ltd. Summary: Several purported class action complaints have been filed in the U.S. District Courts for the Southern District of New York and Northern District of California. The first filed complaint, Tsang v. LDK Solar Company, Ltd., was filed on October 9, 2007, in the U.S. District Court for the Southern District of California. The complaint alleges violations of federal securities laws, Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5, including allegations of issuing a series of false and material misrepresentations to the market which had the effect of artificially inflating the market price of the Company's publicly-traded securities. By Court order, on December 14, 2007, the case was transferred to the Northern District of California. The case is now listed as a member case in the pending Northern District of California action, In re LDK Solar Securities Litigation, 07-CV-05182.

According to the complaint filed on the October 9, 2007, in U.S. District Court for the Northern District of California, the class action was commenced on behalf of purchasers of LDK Solar Co. Ltd. American Depositary Shares during the period from August 1, 2007 to October 3, 2007. Specifically, the complaint charges LDK and certain of its officers and directors with violations of the Securities Exchange Act of 1934. LDK manufactures multicrystalline solar wafers, which are the principal raw material used to produce solar cells. The complaint alleges that throughout the Class Period, defendants concealed the full extent of how badly flawed the Company’s internal controls were, preventing it from accurately measuring or reporting its inventory. As a result, the Company’s inventories were overstated by an estimated 25%, causing inflation in LDK’s assets, earnings and earnings per share (“EPS”) reported during the Class Period.

On October 3, 2007, LDK’s share price fell almost 25% following a report that LDK’s financial controller had resigned, stating that the Company lacked internal controls and that the Company’s reported 1,000 tonne inventory of polysilicon was overstated by 25%. LDK’s former controller, Charley Situ, reported these discrepancies to both the U.S. Securities and Exchange Commission and the Company’s external auditor, KPMG. LDK could not deny or confirm Situ’s allegations on October 3, 2007, but promised to investigate and issue a further statement. The Company has since stated it will have an independent outside auditor investigate Situ’s allegations. The Company’s ADSs, which traded as high as $76.75 on September 27, 2007, plummeted $16.66, or 24.39%, to close at $51.65 on October 3, 2007. The ADSs continued to decline in after-hours trading, falling to $47.49.

The complaint alleges that defendants’ Class Period statements describing LDK’s business fundamentals, financial results and continued sales and earnings growth potential were false and misleading as: (a) defendants had overstated LDK’s inventory of polysilicon prior to and during the Class Period and those false statements remained alive in the market during the Class Period; and (b) due to the Company’s inventory of polysilicon being overstated, the Company’s reported earnings and EPS prior to and during the Class Period were false and those false statements remained alive in the market during the Class Period.

On January 4, 2008, the Court entered the Order appointing a certain individual as Lead Plaintiff. On January 22, 2008, an order to transfer actions 07cv8766(JGK) and 07cv9745(JGK) to the Northern District of California as related to 07cv8766(JGK) was entered. Furthermore, on February 8, 2008, the Court entered an Order granting the motion to appoint Cohen, Milstein, Hausfield & Toll, P.L.L.C. as Lead Counsel. On March 10, 2008, the Lead Plaintiff filed a Consolidated Class Action Complaint. The defendants have responded by filing a motion to dismiss the Lead Plaintiff's Consolidated Class Action Complaint.

According to the transferred action, a stipulation and extending time to answer consolidated class action complaint was filed by LDK Solar Co., LTD. and several individuals on June 12, 2008.

On May 29, 2008, U.S. District Judge William Alsup denied the Defendants’ motion to dismiss.

A press release dated August 29, 2008 stated that investors are fighting for class certification in a lawsuit alleging LDK Solar Co. Ltd. and its executives committed a “massive” securities fraud by inflating the value of the company’s inventory of raw materials and understating the costs of producing solar wafers, which are used in devices that convert sunlight into electricity. The plaintiffs said in court documents filed Thursday in the U.S. District Court for the Northern District of California that the case was “perfectly suited” for treatment on a classwide basis because the class is so numerous that joinder of all the members would be impracticable, common questions of law and fact dominate the case, and the proposed class representative has typical claims of the class and is an “adequate and appropriate” representative.

On January 28, 2009, an Order granting plaintiff’s motion for class certification was entered by the court.

According to a press release dated March 3, 2010, LDK Solar Co., Ltd., a leading manufacturer of multicrystalline solar wafers, announced today that it has reached an agreement to settle the securities class action lawsuit pending in the U.S. District Court of Northern California. After submitting the proposed settlement agreement to the court on February 16, 2010, the court granted preliminary approval of the settlement on February 17, 2010. The settlement is not final until the class receives notice of the settlement and the court grants final approval of the settlement terms. Under the terms of the agreement, all of the claims in the securities class action lawsuit will be dismissed with prejudice. All of the defendants will receive a complete release of all the claims alleged in the case. The settlement agreement expressly states that it does not include any finding that any defendant committed any wrongful act. The defendants continue to maintain that the allegations in the case have no merit at all. To avoid legal expenses, uncertainties and distraction of management, LDK Solar elected to settle the case. As part of the settlement terms, LDK Solar and its insurance carrier will pay a total of $16 million (approximately 5% of the alleged damages) to compensate the class members and to cover all legal and administrative expenses.

On June 22, 2010, an Order Granting Final Approval Of Class Action Settlement was issued by the Court.

INDUSTRY CLASSIFICATION:
SIC Code: 3674
Sector: Technology
Industry: Semiconductors

COMPANY/ISSUER NAME:	LDK Solar Company Ltd.
COMPANY/ISSUER TICKER:	LDK
COMPANY WEBSITE:	www.ldksolar.com

FIRST IDENTIFIED COMPLAINT IN THE DATABASE

Chester Tsang, et al. v. LDK Solar Company, Ltd. et al.

COURT: S.D. New York	DOCKET NUMBER: 07-CV-08706
JUDGE NAME: Hon. John G. Koeltl
DATE FILED: 10/09/2007	SOURCE: Notice of Filing
CLASS PERIOD START: 06/01/2007	CLASS PERIOD END: 10/02/2007
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 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 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, info@csgrr.com/ Federman & Sherwood (Oklahoma City) 120 North Robinson, Suite 2720, Oklahoma City, OK, 73102 (voice) 405-235-1560, (fax) , wfederman@aol.com Glancy Binkow & Goldberg LLP (Los Angeles) 1801 Ave. of the Stars, Suite 311, Los Angeles, CA, 90067 (voice) 310.201.915, (fax) 310. 201-916, info@glancylaw.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 Schatz Nobel Izard P.C. One Corporate Center, 20 Church Street , Hartford, CT, (voice) 860.493.6292, (fax) 860.493.6290, info@snlaw.net Spector Roseman & Kodroff (San Diego) 1818 Market Street, Suite 2500, Philadelphia, PA, 19103 (voice) 215.496.0300, (fax) 215.496.6611, _____________________________________________ TOTAL NUMBER OF PLAINTIFF FIRMS: 8

DOCUMENTS FOR THE FIRST IDENTIFIED COMPLAINT
Class Action Complaint
Type: Complaint		Date on the document: 10/9/2007
US District Court Civil Docket
Type: Docket		Date on the document: 1/18/2008

REFERENCE COMPLAINT

In re: LDK Solar Securities Litigation

COURT: N.D. California	DOCKET NUMBER: 07-CV-05182
JUDGE NAME: Hon. William H. Alsup
DATE FILED: 03/10/2008	SOURCE: Docket
CLASS PERIOD START: 06/01/2007	CLASS PERIOD END: 10/07/2007
TYPE OF COMPLAINT: Consolidated Complaint
PLAINTIFF FIRMS NAMED IN COMPLAINT:
Cohen, Milstein, Hausfeld & Toll P.L.L.C. (San Francisco) One Embarcadero Center, Suite 526, San Francisco, CA, 94111 (voice) 415.623.2048, (fax) 415.623.2048, 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: 2

DOCUMENTS FOR THE REFERENCE COMPLAINT
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Type: Complaint		Date on the document: 10/09/2007
Declaration Of Mark Kindall In Support Of Motion For Appointment Of Lead Plaintiff And Approval Of Selection Of Lead Plaintiffs' Choice Of Counsel
Type: Declaration		Date on the document: 11/21/2007
Declaration Of Matthew B. Kaplan In Support Of Motion Of Shahpour Javidzad For Relief From The Court's Scheduling Order
Type: Other		Date on the document: 11/21/2007
Memorandum In Support Of Motion For Appointment Of Lead Plaintiff And Approval Of Selection Of Lead Plaintiffs' Choice Of Counsel
Type: Memorandum		Date on the document: 11/21/2007
Motion Of Shahpour Javidzad For Relief From The Court's Scheduling Order; Memorandum In Support Thereof
Type: Motion		Date on the document: 11/21/2007
Notice Of Appearance Of Mark Kindall
Type: Notice		Date on the document: 11/21/2007
Notice Of Motion And Motion Of Shahpour Javidzad For Appointment As Lead Plaintiff; Memorandum In Support Thereof
Type: Motion		Date on the document: 11/21/2007
Notice Of Motion For Appointment Of Lead Plaintiff And Approval Of Selection Of Lead Plaintiffs' Choice Of Counsel
Type: Motion		Date on the document: 11/21/2007
Proof of Service
Type: Other		Date on the document: 11/21/2007
Proof of Service
Type: Other		Date on the document: 11/21/2007
[Proposed] Order Appointing Lead Plaintiff and Approving Selection of Lead Plaintiffs’ Choice of Counsel
Type: Order		Date on the document: 11/21/2007
[Proposed] Order Granting Motion Of Shahpour Javidzad For Appointment As Lead Plaintiff
Type: Order		Date on the document: 11/21/2007
[Proposed] Order Granting Motion Of Shahpour Javidzad For Relief From Scheduling Order
Type: Order		Date on the document: 11/21/2007
Memorandum In Opposition To Lead Plaintiff Motions And In Further Support Of Movant's Lead Plaintiff Motion
Type: Memorandum		Date on the document: 11/27/2007
Notice Of Withdrawal Of Motion Of Inna Kreer For Appointment Of Lead Plaintiff And Approval Of Selection Of Lead Plaintiffs' Choice Of Counsel
Type: Motion		Date on the document: 11/27/2007
Proof of Service
Type: Other		Date on the document: 11/27/2007
Stipulation and Order Consolidating Related Action
Type: Order		Date on the document: 11/28/2007
Declaration Of Matthew B. Kaplan
Type: Declaration		Date on the document: 12/10/2007
Proof of Service
Type: Other		Date on the document: 12/10/2007
[Proposed] Order Granting Motion Of Shahpour Javidzad For Appointment As Lead Plaintiff
Type: Order		Date on the document: 12/10/2007
Supplemental Notice Of Motion And Motion Of Shahpour Javidzad For Appointment As Lead Plaintiff; Memorandum In Support Thereof
Type: Motion		Date on the document: 12/10/2007
Memorandum Of Points And Authorities In Further Support Of Shahpour Javidzad's Motion For Appointment As Lead Plaintiff And In Opposition To Competing Movants' Motions For Appointment As Lead Plaintiff
Type: Memorandum		Date on the document: 12/17/2007
Proof of Service
Type: Other		Date on the document: 12/17/2007
Shahpour Javidzad's Reply To Movant Candelore's Opposition To Mr. Javidzad's Motion To Be Appointed Lead Plaintiff
Type: Other		Date on the document: 12/17/2007
Declaration Of Matthew B. Kaplan In Support Of Shahpour Javidzad's Reply To Movant Candelore's Opposition To Mr. Javidzad's Motion To Be Appointed Lead Plaintiff
Type: Declaration		Date on the document: 12/20/2007
Proof of Service
Type: Other		Date on the document: 12/21/2007
Order Appointing Lead Plaintiff
Type: Order		Date on the document: 01/04/2008
Notice Of Filing Of Certification Of Lead Plaintiff Shahpour Javidzad
Type: Notice		Date on the document: 01/09/2008
Proof of Service
Type: Other		Date on the document: 01/09/2008
Order Appointing Lead Counsel
Type: Order		Date on the document: 2/8/2008
Consolidated Class Action Complaint
Type: Complaint		Date on the document: 3/10/2008
Opposition To Defendants' Motion To Dismiss Plaintiff's Consolidated Class Action Complaint
Type: Other		Date on the document: 4/24/2008
Plaintiff's Opposition To Defendants' Request For Judicial Notice
Type: Other		Date on the document: 4/24/2008
Declaration Of Matthew B. Kaplan
Type: Declaration		Date on the document: 5/6/2008
Plaintiff's Notice Of Motion And Motion To Authorize Service To Unserved Defendants Located Abroad Pursuant To Federal Rule Of Civil Procedure 4(F)(3)
Type: Motion		Date on the document: 5/6/2008
[Proposed] Order Granting Lead Plaintiff's Motion To Authorize Service To Unserved Defendants Located Abroad Pursuant To Federal Rule Of Civil Procedure 4(F)(3)
Type: Order		Date on the document: 5/6/2008
Order Denying Defendants' Motion To Dismiss
Type: Order		Date on the document: 5/29/2008
Plaintiff's Reply In Further Support Of His Motion To Authorize Service To Unserved Defendants Located Abroad Pursuant To Federal Rule Of Civil Procedure 4(F)(3)
Type: Other		Date on the document: 6/5/2008
Order Granting Plaintiffs' Motion To Authorize Service To Unserved Defendants Located Abroad And Vacating Hearing
Type: Order		Date on the document: 6/12/2008
Order Denying Motion For Leave To File Motion For Reconsideration, Or, In The Alternative, For Certification Of Issues For Interlocutory Appeal
Type: Order		Date on the document: 7/14/2008
Declaration Of Jane D. Nettesheim
Type: Declaration		Date on the document: 8/25/2008
Notice Of Supplemental Material Filed In Further Support Of Plaintiff's Opposition To Defendants' Motion To Stay Discovery
Type: Notice		Date on the document: 8/26/2008
Lead Plaintiff's Notice Of Motion And Motion To Certify Class
Type: Motion		Date on the document: 8/28/2008
Stipulation And Order Modifying Briefing And Hearing Schedule On Lead Plaintiff’s Motion For Class Certification
Type: Order		Date on the document: 9/2/2008
US District Court Civil Docket
Type: Docket		Date on the document: 9/2/2008
Declaration Of Matthew B. Kaplan In Support Of Plaintiff's Opposition To Defendants' Motion For A Protective Order
Type: Declaration		Date on the document: 9/4/2008
Opposition To Defendants' Motion For A Protective Order
Type: Other		Date on the document: 9/4/2008
[Proposed] Order Denying Motion For Protective Order And Granting Discovery
Type: Order		Date on the document: 9/4/2008
Declaration Of Matthew B. Kaplan In Support Of Lead Plaintiff's Motion For Class Certification And Lead Plaintiff's Reply In Opposition To Defendants' Motion To Exclude Declaration Of Jane D. Nettesheim
Type: Declaration		Date on the document: 11/03/2008
Notice Of Supplemental Declaration Of Jane D. Nettesheim
Type: Notice		Date on the document: 11/03/2008
Opposition To Defendants' Motion To Exclude Declaration Of Jane D. Nettesheim
Type: Other		Date on the document: 11/03/2008
Reply In Further Support Of Lead Plaintiff's Motion For Class Certification
Type: Other		Date on the document: 11/03/2008
Notice Of Firm Name Change And Notice Of Appearance
Type: Notice		Date on the document: 11/14/2008
Exhibit C
Type: Other		Date on the document: 01/26/2009
Exhibit A
Type: Other		Date on the document: 01/27/2009
Order Re Motion For Class Certification
Type: Order		Date on the document: 01/28/2009
Exhibit D
Type: Other		Date on the document: 02/18/2009
Declaration Of Matthew B. Kaplan
Type: Declaration		Date on the document: 03/04/2009
Plaintiff’s Opposition To Defendants’ Motion To Quash Plaintiff’s Subpoena To Google Inc. And For Protective Order And Plaintiff’s Request For Affirmative Relief
Type: Other		Date on the document: 03/04/2009
[Proposed] Order Denying Defendants’ Motion To Quash And For A Protective Order And Granting Affirmative Relief To Lead Plaintiff
Type: Order		Date on the document: 03/05/2009
U.S. District Court Civil Docket
Type: Docket		Date on the document: 02/02/2010
Order Granting Motion For Preliminary Approval Of Settlement Agreement
Type: Settlement		Date on the document: 02/17/2010
Order Granting Final Approval Of Class Action Settlement
Type: Settlement		Date on the document: 06/22/2010
U.S. District Court Civil Docket
Type: Docket		Date on the document: 06/29/2010

OTHER DOCUMENTS
Class Action Complaint - Demand for Jury Trial
Case Name and/or Number: Thomas O'Reilly, et al. v. LDK Solar Company, Ltd. et al.
Type: Complaint		Date on the document: 10/09/2007
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: Weichen G. Lui, et al. v. LDK Solar Company, Ltd. et al.
Type: Complaint		Date on the document: 10/10/2007
U.S. District Court Civil Docket
Case Name and/or Number: Greenwald, et al. v. Peng, et al.
Type: Docket		Date on the document: 10/16/2007
Class Action Complaint - Jury Trial Demanded
Case Name and/or Number: [Unknown plaintiff], et al. v. LDK Solar Company, Ltd. et al.
Type: Complaint		Date on the document: 11/02/2007
Class Action Complaint for Violation of the Federal Securities Laws - Demand for Jury Trial
Case Name and/or Number: Reza Karkonan, et al. v. LDK Solar Company, Ltd. et al.
Type: Complaint		Date on the document: 11/13/2007
U.S. District Court Civil Docket
Case Name and/or Number: Reza Karkonan, et al. v. LDK Solar Company, Ltd. et al.
Type: Docket		Date on the document: 11/13/2007
U.S. District Court Civil Docket
Case Name and/or Number: Chester Tsang, et al. v. LDK Solar Company, Ltd. et al.
Type: Docket		Date on the document: 12/14/2007

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