According to the docket, on February 24, 2000, the Court entered the Order and Final Judgment signed by U.S. District Judge Alfred J. Lechner, Jr. The settlement was approved and the case closed.
By the Notice Of Pendency Of Class Action, a Settlement Fund consisting of $26,950,000 in cash, including $22,000,000 for the Section 10(b) Class and $4,950,000 for the Secondary Offering Class, has been established. A hearing will be held before the Honorable Alfred J. Lechner, in the United States District Court, United States Post Office and Courthouse Building, 50 Walnut Street, Newark New Jersey 07102, at 10:00, a.m. on February 7, 2000, to determine whether a proposed settlement of the above-captioned litigation as set forth in the Stipulation of Settlement dated October 25, 1999, is fair, reasonable and adequate and to consider the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses. The Court, by Preliminary Order In Connection With Settlement Proceedings, dated November 12, 1999, has certified a plaintiff class consisting of: "all persons who purchased MobileMedia Class A common stock during the period commencing June 29, 1995 through September 27, 1996, inclusive (the "Section 10(b) Class") and all persons or entities who purchased MobileMedia Class A common stock or 9-3/8% Senior Subordinated Notes due 2007 issued pursuant to or traceable to, the registration statements and prospectuses dated November 7, 1995 (the "Secondary Offering Class").
According to the same Notice, MobileMedia filed for protection in Bankruptcy and has been discharged. Pursuant to MobileMedia's plan of reorganization, which was confirmed by the Bankruptcy Court by Order dated April 12, 1999, holders of equity interests in MobileMedia (e.g., MobileMedia Class A common stock) received no distributions thereunder and their equity interests were canceled. Pursuant to the Plan, all of the equity in the reorganized company was distributed to debtholders, including holders of the Notes. By order of the Bankruptcy Court the sale of MobileMedia to Arch Communications Inc. was approved.
On November 24, 1997, the Court issued the Order consolidating action 96-CV-4715 into action 96-CV-5723. That same day, the plaintiffs filed a Consolidated Amended Class Action Complaint. On March 6, 1998, the defendants filed a motion to dismiss the complaint, and on October 26, 1998, the Court entered the Order granting in part and denying in part the motion to dismiss.
The original complaint alleges that, the defendants issued, or caused to be issued, misleading statements, which falsely represented the Company's current financial condition and business prospects. Furthermore, the Company failed to disclose in any of its prior statements, that the Company was being adversely impacted by numerous problems. These problems include, among other things, that the Company was suffering from massive integration problems as a result of its purchase of MobileComm and other acquisitions, that the Company would have to pay three prior executive officers one million dollars as a result of their departure, that the Company was experiencing severe internal management problems which would require the termination and pay-off of three executive officers, that the Company was in imminent violation of certain material covenants with the bank holding its credit agreement, that the Company's high churn rate continued to increase at such a rate that would severely impact its earnings for the upcoming quarters and that the Company had committed material errors in its licensing process for a number of its local transmission one-way paging stations.
The complaint further alleges that as a result of defendants' material misrepresentations and omissions, during the Class Period, Mobilemedia common stock traded as high as $29.25 per share. On September 27, 1996, Mobilemedia shocked the investment community by announcing that the Company's "[t]hird quarter earnings have been significantly impacted by the effects of the integration of MobileComm". The Company also shocked the investment community by announcing that it was taking a one million dollar charge relating to the departure of three executive officers and that the Company was, as a result of its third quarter results, in violation of certain bank covenants and that the Company had committed material errors in its licensing process for a number of its local transmission one-way paging stations. In reaction to defendants' September 27, 1996 disclosure, the price of Mobilemedia common stock plummeted $2.00 or 30% from $6.50 per share to close a new low of $4.50 per share on extremely heavy trading. On September 30, 1996, Mobilemedia common stock fell an additional 8% to close $4.125 per share.
NOTE OF DISCLAIMER: Please note that the company named as a defendant in this action is not the Norwegian company with a similar name. We apologize for an earlier incorrect link at this location.