According to the latest docket posted, on March 1, 2000, the plaintiffs filed a notice of appeal from the Order granting the motion to dismiss the amended class action complaint. On May 9, 2000, the Court entered the certified copy of the mandate from the U.S. Court of Appeals. The appeal was withdrawn by the plaintiffs.
By the closing Order, dated 01/31/2000, from U.S. District Judge Harold Baer, Jr. of the United States District Court for the Southern District of New York, the defendants' motion to dismiss the case was granted, and the amended class action complaint was dismissed. The court could not reasonably conclude that defendants' representations, taken together and in context, would have misled a reasonable investor about the nature of the securities.
The original Complaint charges Northern Telecom and certain officers and directors of the Company during the relevant time period with violations of Sections 11, 12(2) and 15 of the Securities Act of 1933 and of Sections 10(b) and 20(a) of the Securities Exchange Act 1934 for, among other things, making false and misleading public statements, and issuing a registration statement and proxy statement/prospectus in connection with the Merger that contained false and misleading statements, regarding the Company's financial condition, its revenue growth and specifically the impact on the Company's revenue growth of a fall off in its European and Asian business. The complaint also alleges that in the weeks following the consummation of the Merger, defendants started to reveal the Company's financial woes by announcing that it was slashing its workforce in a cost cutting effort. Defendants then startled investors by announcing that revenue growth would be significantly below their own projections due to a major fall off in demand for its products in Europe and Asia. Further, the Complaint alleges that defendants had, just prior to the Merger, played down the impact of these markets on the Company's revenue growth. On the release of the announcements the Company's stock price fell from a Merger consummation price of approximately $50 to close at $32-1/16 on Sept. 30, 1998, and then trailed down to $29-7/8 on Oct. 13, 1998. Therefore Bay Networks' shareholders have lost over $20 since the Merger's consummation in the value of the Northern Telecom shares that they received in exchange for their Bay Networks' shares. The Complaint also alleges that defendants withheld the disclosure of this information from Bay Networks' shareholders to ensure the Merger's consummation at the agreed upon exchange ratio of 0.6 Northern Telecom share for each Bay Networks' share.
Class: all individuals and entities whose securities of Bay Networks, Inc. ("Bay Networks") were exchanged for shares of Northern Telecom, Ltd. ("Northern Telecom" or the "Company") in connection with Northern Telecom's acquisition of Bay Networks on Aug. 28, 1998, (the "Merger") and who were damaged thereby.