According to the docket, on October 9, 2003, the Court entered the Preliminary Order by U.S. District Judge John T. Nixon granting the motion for preliminary approval of the class action settlement. A settlement fairness hearing was set for December 17, 2003. On December 18, 2003, the Court entered Order and Final Judgment granting the motions for final approval of the settlement plan of allocation and for attorneys’ fees and reimbursement expenses. Plaintiffs' counsel was awarded the sum of $3,666,666 in fees and $831,655 in reimbursement of expenses. The settlement was approved as fair, reasonable and adequate and the complaint was dismissed with prejudice.
The Notice Of Proposed Settlement announces the establisment of a Settlement Fund in the amount of $11,000,000 in cash, plus interest.
Pursuant to the Order, dated April 5, 2002 from U.S. District Judge John T. Nixon of the U.S. District Court for the Middle District of Tennessee, Nashville the shareholders' motion for class certification was granted in their action alleging defendants violated the Securities Exchange Act of 1934. The Court hereby CERTIFIES a Class including all persons or entities who purchased Envoy's stock during the period of February 12, 1997 through and including August 18, 1998; but excluding Defendants, subsidiaries and affiliates of the Company, members of the immediate families of any excluded person, any entity in which any excluded person has a controlling interest, and the legal representatives, affiliates, heirs, successors, predecessors in interest, or assigns of any Defendant. Furthermore, this Court CERTIFIES Plaintiffs James E. Jackson, Robert Schneider and Mark W. Spates to represent the Class.
The shareholders sued defendants alleging that they improperly recorded large one-time write-offs for in-process research and development in connection with three acquisitions, causing the stock price to be artificially inflated. The court granted the shareholders' motion for class certification, holding that they had met the predominance requirement under Fed. R. Civ. P. 23(b)(3) and that under the fraud-on-the-market theory common issues of reliance would predominate. The shareholders had established the fraud-on-the-market presumption of reliance as there was no dispute that the corporation's securities were traded in an efficient market, because its weekly trading volume was more than 1,200,000 shares, it was actively followed by securities analysts at major brokerage firms, the number of market makers and arbitrageurs willing to trade the corporation's stock exceeded the minimum threshold, defendants filed a Form S-3 registration statement, and unexpected corporate events immediately caused a movement in the stock price. Defendants' contention that they rebutted the presumption only raised a factual dispute as to the materiality of the excessive write-offs and their effect.
Class action complaints were filed on each of August 20, 1998, August 21,
1998 and September 15, 1998. The Court ordered that the three
Complaints be consolidated into a single class action lawsuit in the United
States District Court, Middle District of Tennessee, Nashville Division.
The original Complaint alleges, among other things, that from February 12, 1997 to August 18,1998 (the "Class Period") the defendants issued materially false and misleading statements about the Company, its business, operations and financial position
and failed to disclose material facts necessary to make defendants' statements
not false and misleading in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated
thereunder. Plaintiffs allege that the Company failed to disclose that the
Company's financial statements were not prepared in accordance with generally
accepted accounting principles due to the improper write-off of certain acquired
in-process technology, resulting in the Company's stock trading at allegedly
artificially inflated prices during the Class Period.