According to the docket, on December 5, 2002, the Court entered the Amended Order and Final Judgment. The Plaintiffs’ counsel was awarded the sum of $966,000 in fees, and $92,134 in reimbursement of expenses, which was paid from the settlement fund. Lead plaintiff Keith Dartley was awarded the sum of $2,200 as compensation for the time he expended and expenses he incurred in the litigation directly relating to the representation of the Class. The case is closed.
By the Order of the Court dated September 19, 2002, the parties reached a settlement. The Statement of Plaintiff Recovery states that the Pursuant to the Settlement will receive a Settlement Fund consisting of $3,220,000 in cash, plus interest.
The First Amended Class Action Complaint filed in the Action alleges that defendants issued a false and misleading prospectus and the Registration Statement dated February 3, 1997 in connection with the initial public offering of ErgoBilt common stock and that defendants thereby violated Sections 11, 12(a)(2) and 15 of the Securities Act of 1933 (the "Securities Act"), 15 U.S.C.
The Complaint further alleges that plaintiffs and other Class Members purchased the common stock of ErgoBilt during the Class Period at artificially inflated prices as a result of defendants' dissemination of false and misleading statements. On May 3, 1999, Richard Troutman and Defendants Cruttenden Roth Incorporated and Principal Financial Securities, Inc. moved to dismiss the Complaint. The Court, by order dated May 29, 2001, dismissed the claims against Richard Troutman with prejudice. By that same order, the Court denied defendants Cruttenden Roth Incorporated's and Principal Financial Securities, Inc.'s motions to dismiss the Complaint's Section 11 claim, but did grant their motion to dismiss the Complaint's Section 12(a)(2) claim.
The first complaint filed, according to a Press Release dated July 23, 1998, charges Ergobilt and certain officers and directors of the Company during the relevant time period with violations of Sections 11,12(a)(2) and 15 of the Securities Act of 1933 and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, by, among other things, making false and misleading statements in the Registration Statement/Prospectus issued in connection with the IPO and by issuing false and misleading statements and press releases concerning Ergobilt's operating results.
Specifically, the original complaint alleges that because of the issuance of a series of false and misleading statements and press releases concerning Ergobilt's operating results, the price of Ergobilt common stock was artificially inflated during the Class Period. On May 14, 1998, Ergobilt issued a press release announcing that it expects to report a loss of $2 million for the year ended February 28, 1998, due to accounting errors which materially overstated revenues and understated expenses during previously reported quarterly periods which will be restated pending completion of a "special audit." Following this announcement, the price of Ergobilt common stock closed down at $3.25 per share, a decline of 80% from a Class Period high of $14.75 reached on September 18, 1997 and a decline of 53% from the IPO price of $7.00 per share. At present, Ergobilt common stock trades for $1.53 per share.