According to the firm's 10-K dated 3/28/2000, on April 16, 1998, the Court entered an order dismissing the auditors from the suit and denying the Company's and the individual defendants' motions to dismiss. On October 9, 1998, the Court heard arguments on the question on whether a class should be certified and on December 14, 1998, the Court entered an order certifying a class. In December 1998, the parties to the suit determined that the further conduct of the case would be protracted and expensive and commenced discussions with a view toward settlement of the action. Although the Company continued to deny each of the plaintiffs' claims and allegations, the Company determined it would be in the best interests of the Company to settle the suit and agreed to enter into a Stipulation of Settlement which was filed by the parties with the Court on March 1, 1999. The terms of the proposed settlement provide that (i) the Company's directors and officers liability insurance carrier will pay $7 million to a settlement fund for the
benefit of the plaintiffs; and (ii) the plaintiffs will be entitled to 50% of the net proceeds, up to a maximum of $6 million, (after the Company has first recouped its costs and expenses incurred in litigating its above-described lawsuit against Cyprus relating to Golden Cross and after deducting an $8 million reserve against the asserted subrogation claim of the Company's flood insurance carrier) actually received by the Company from its Golden Cross lawsuit against Cyprus. The Stipulation of Settlement contains strong denials of liability by the defendants as well as acknowledgments by the plaintiffs that they were unable to identify significant evidence to support a large portion of their claims. On July 15, 1999, the
Court gave final approval to the settlement and authorized the submission of
the settlement terms to the class action shareholders.
The original complaint charges Coeur d'Alene and certain of its officers, directors and outside auditors, Ernst & Young LLP with violations of the federal securities laws. The complaint alleges that during the Class Period, defendants artificially inflated the price of Coeur d'Alene's publicly traded equity and debt securities by representing that Coeur d'Alene: (i) had improved its financial results by reducing its losses during 1994 and had reached profitability during 1995; (ii) was strengthening its balance sheet by increasing its assets; (iii) was operating its Golden Cross gold mine in New Zealand (the "Golden Cross Mine") at a lower cost per ounce of gold produced than in prior years and would achieve gold production at Golden Cross in 1996 of about 77,000 ounces; (iv) was completing its new Fachinal mine in Chile, on time and under budget; (v) was continuing to pay its $.15 per share annual common stock dividend due to its strong financial condition and cash flow; and (vi) was on track to achieve strong cash flow, net income and earnings per share growth in 1996 and 1997.