According to a Press Release dated 7/22/96, the complaint filed in the U.S. District Court for the Southern District of Ohio charges CompuServe, certain of its officers and directors, and it parent corporations (H&R Block, Inc. and H&R Block Group, Inc.) with violations of the federal securities laws (Sections 11, 12(a) (2), and 15 of the Securities Act of 1933), among other things, by failing to advise purchasers of CompuServe common stock in (or traceable to) the initial public offering in April 1996 that the Company was experiencing serious adverse trends that affected the rate of growth of its subscriber base and jeopardized its profitability.
NOTE: The case was first filed on June 28, 1996 in the Franklin County (Ohio) Court of Common Pleas, titled Greenfield v. Compuserve Corporation. The claims of the federal action are similar to the state action. Greenfield brought claims against Compuserve under sections 11, 12(a)(2) and 15 of the Securities Act of 1933.
On December 20, 1996, the Court entered the Pretrial Order by Magistrate Judge Norah M. King granting the motion for order to appoint lead plaintiffs and co-lead counsels. On February 5, 1997, the plaintiff filed an Amended Complaint. On March 17, 1997, the Defendants moved to dismiss or stay the Romine action, inter alia , on the grounds that because it was duplicative of the Ohio state action. On April 17, 1997, another similar federal class action, Mitelman v. CompuServe Corporation, was filed in the U.S. District Court for the Southern District of Ohio. The Mitelman action included the IPO Underwriters - Goldman Sachs & Co., George K. Baum and Company, and Merrill, Lynch, Pierce, Fenner & Smith Incorporated - as named Defendants.
On May 20, 1997, Mr. Greenfield initiated yet another class action lawsuit, this one filed in the Supreme Court of the State of New York solely against the Underwriters. On September 12, 1997, on Plaintiffs' motion, the district court consolidated the Romine and Mitelman federal class actions. On March 26, 1998, the district court entered an Opinion and Order staying the federal action pending resolution of the state proceedings. Finally, on April 24, 1988, the Supreme Court of New York entered an order granting the Underwriters' Motion to Dismiss those proceedings.
On April 23, 1998, the plaintiffs filed a Notice of Appeal from the March 26, 1998 District Court decision administratively terminating the federal action subject to reopen after ruling in the Ohio state action. On December 7, 1998, the Court entered the Order from the U.S. Court of Appeals Sixth Circuit affirming the decision of the District Court.
According to the website of one of the counsels in the Ohio state action, Greenfield v. CompuServe Corporation, the case settled for $9.5 million.