On July 22, 2004, the Court entered the Order by U.S. District Judge Naomi Reice Buchwald granting the motion for authorizing the disbursement of the Net Settlement Fund and payment of fees and expenses to the claims administrator. Earlier, on June 2, 2003, the Court entered the Order awarding plaintiffs’ counsel attorney fees in the amount of 33 1/3 % of the current settlement fund ($3,383,333.00) and reimbursement of expenses in the amount of $538,091.83 with interest earned thereon. Representative plaintiffs Andrew Ballow, Anthony Giarletta, Carole Rothschild, Charles Simaz, Robert Siegel, Thomas J. Collard, Victoria L. Brown in reimbursement for their time and effort in aiding the prosecution of this case, were also awarded $3,000.00 each from the Settlement Fund. The Court further entered the Judgment dismissing the litigation with prejudice and the case was closed.
The Complaint charges that, during the Class Period, Complete Management, Inc. and certain of its officers and directors violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, among other things, knowingly or recklessly making misrepresentations about the Company's financial condition. Specifically, the Complaint alleges that CMI improperly recognized revenue on uncollectible receivables from its largest customer, Greater Metropolitan Medical Services, a related party, in violation of Generally Accepted Accounting Principles. As a result of this conduct, CMI announced on August 19, 1998 that it would be writing off $28.9 million in management fees due from GMMS and would be severing its relationship with them. The Complaint further alleges that by making these material misrepresentations, the Defendants artificially inflated the price of the Company's common stock during the Class Period. The auditor of CMI's financial statements and various underwriters of securities issued by CMI in public offerings are also named as defendants.