According to the docket, on August 15, 1997, the Court entered the Final Judgment and Order signed by Judge Daniel R. Dominguez dismissing this case on the merits and with prejudice. The case was closed.
As reported in the Company’s 10-K For The Fiscal Year Ended September 30, 1997, in September 1997 the Company settled. The class action alleged federal securities violations by the Company and various officers and directors of the Company based on accounting irregularities that required the Company to restate certain of its reported financial results and other alleged misstatements and omissions in the Company's disclosure documents. The settlement resulted in the payment of $2.5 million and 2.5 million in previously issued and outstanding shares of Class B Common Stock to the plaintiffs and their attorneys. The 2.5 million Class B Shares were acquired by the Company from a number of the Company's shareholders, including the original organizers of the Company, in connection with the settlement of the litigation. The settlement resulted in the dismissal of the actions. In connection with the settlement and their contribution of Class B Shares to the Company for use in the settlement, certain of the Company's directors and the founding shareholders were released by the Company from all possible claims arising out of the circumstances which precipitated the litigation and certain other possible claims.
On or around March 1997, the cases filed in the U.S. District Courts for the Eastern District of New York and the Southern District of Florida were transferred and consolidated in the District of Puerto Rico under Docket No. 1156. On April 30, 1997, the Court entered the Order consolidating all transferred cases. The lead plaintiffs are Sweetwater Investments, Annabella Sykes Ray and Joseph Shanken and the Law Firms of Hagens & Berman, P.S. and Abbey, Gardy & Squitieri are appointed Lead Counsel.
The original action alleges violations of Sections 10(b) and 20 of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder based on accounting irregularities in the Company's reported financial results for its first and second quarters ended December 31, 1995, and March 31, 1995, respectively.
Several purported class action law suits with similar allegations have also been filed in the U.S. District Courts for the Southern District of Florida and District of Puerto Rico.