According to the docket dated January 16, 2001, a Notice of Stipulation and Agreement of Settlement by the defendant was entered on September 11, 2000. On October 02, 2000, the judge signed the Preliminary Order In Connection With Settlement Proceeding. Furthermore, on January 16, 2001, Order and Final Judgement The Settlement Stipulation is approved as fair, reasonable and adequate, and in the best interests of the Class, and the Class members and the parties are directed to consummate the with its terms and provisions. Counsel for plaintiffs and the Class are hereby awarded the sum of $2,333,333.33 in fees, and $113,157.42 in reimbursement of expenses, shall be paid to plaintiffs' Co-Lead Counsel from the settlement fund with interest.
According to the firm's 10-K filing dated 4/11/2000, on or about September 29, 1997, a putative class action lawsuit (the "Ceasar Action") was filed against the Company and two of its former officers and directors in the United States District Court for the
Eastern District of New York (the "Eastern District") on behalf of all
purchasers of the Company's common stock during the period from April 1, 1997
through August 15, 1997. Between approximately October 14, 1997 and December 3, 1997, nine additional class action complaints were filed against the same
defendants, as well as certain additional former Company officers and directors.
Four of these additional complaints were filed in the Eastern District and five
were filed in the United States District Court for the Southern District of New
York (the "Southern District"). On or about October 28, 1997, the plaintiff in
the Ceasar Action filed an amended complaint naming three additional former
officers and directors as defendants. The amended complaint in the Ceasar Action
also extended the proposed class period from November 4, 1996 through October
22, 1997. The longest proposed class period of any of the complaints is from
April 1, 1996 through October 22, 1997. On or about February 2, 1998, an
additional lawsuit brought on behalf of two individual investors, rather than on
behalf of a putative class of investors, was filed against the Company and
certain of its former officers and directors in federal court in New Jersey (the
"New Jersey Action").
In these actions, plaintiffs allege that the Company and its former senior
officers engaged in securities fraud by affirmatively misrepresenting and
failing to disclose material information regarding the lending practices of the
Company's UK subsidiary, and the impact that these lending practices would have
on the Company's financial results. Plaintiffs allege that certain public
filings and press releases issued by the Company were false or misleading. In
each of the putative class action complaints, plaintiffs have asserted
violations of Section 10(b) and Section 20(a) of the Securities Exchange Act of
1934, as amended. Plaintiffs seek unspecified damages, including pre-judgment
interest, attorneys' and accountants' fees and court costs.
In December 1997, the Eastern District plaintiffs filed a motion for
appointment of lead plaintiffs and approval of co-lead counsel. On September 23,
1998, the court granted this motion. On March 25, 1998, the Company and its
former officers and directors who were defendants filed a motion with the
federal Judicial Panel for Multidistrict Litigation ("JPML"), seeking
consolidation of all current and future securities actions, including the New
Jersey Action, for pre-trial purposes before Judge Sterling Johnson in the
Eastern District. On June 12, 1998, the JPML granted this motion. As a result of
the Company's Chapter 11 proceedings, the action against the Company was
discharged when the Company's plan of reorganization became effective on July 1,
1999. The action is still pending against the individual defendants.
The original Complaint alleges violations of the federal securities laws in connection with public filings and announcements made in 1997 concerning Cityscape's loan and accounting policies. Particularly, the complaint alleges that the defendants mislead the plaintiff and the purported class group by reporting that certain U.K. regulatory initiatives for lending practices wouldn't have a material effect on the company's operations, revenues and profits. The complaint also alleges that when the truth regarding the impact of the U.K. loan policies on Cityscape's business was revealed at the end of the class period the price of the company's stock fell precipitously as a result of these revelations.