According to the docket posted, on February 8, 2001, the Court entered the Order and Final Judgment by U.S. District Judge William G. Young. The settlement was approved and the case closed.
By the Notice of Pendency of Class Action, a Settlement Fund consisting of $3 million in cash has been established. A hearing will be held before the Honorable William G. Young of the United States Courthouse, One Courthouse Way, Courthouse Square, Boston, Massachusetts 02210, at 2:00 p.m., on February 6, 2001 (the “Settlement Fairness Hearing”) to determine whether a proposed settlement (the “Settlement”) of the above-captioned class action (the “Action”) as set forth in the Stipulation of Settlement dated September 13, 2000 (the “Stipulation”), is fair, reasonable and adequate, and to consider approval of the Plan of Allocation and the application of class counsel for attorneys’ fees and reimbursement of expenses. The Court, on December 15, 1999, certified a plaintiff class (the “Class”) consisting of all persons or entities who purchased the common stock of Number Nine Visual Technology Corporation during the period May 26, 1995 through and including January 31, 1996 (the “Class Period”).
Earlier, as summarized in the Notice of Pendency, on November 18, 1996, the Court entered an order granting Plaintiffs’ motion to consolidate the pending actions; appointing Lead Plaintiffs; appointing Rabin & Peckel LLP and Milberg Weiss Bershad Hynes & Lerach LLP as Plaintiffs’ Co-Lead Counsel; and appointing Moulton & Gans LLP and Shapiro Haber & Urmy LLP as Plaintiffs’ Co-Liaison Counsel. On January 23, 1997, Plaintiffs filed and served their Consolidated Class Action Complaint. Defendants moved to dismiss the Complaint in its entirety. After briefing and oral argument, by Order dated June 1, 1999, the Court granted in part and denied in part Defendants’ motions to dismiss. The Court sustained Plaintiffs’ Complaint only insofar as it related to: (i) Defendants’ alleged failure to disclose the existence of alleged memory shortages in the Registration Statement and Prospectus in violation of Section 11 of the Securities Act, and (ii) Defendants’ alleged overstatement of Number Nine’s inventory and earnings in SEC filings and press releases made throughout the Class Period in violation of Section 10(b) of the Exchange Act. The Court dismissed all claims based on any other allegations of material misrepresentations and omissions alleged in the Complaint. On July 15, 1999, Defendants filed answers wherein they denied all material allegations of the Complaint. On July 16, 1999, Plaintiffs filed a motion for class certification. On December 15, 1999, over limited opposition by defendants, the Court granted Plaintiffs’ motion for class certification in its entirety.
Three complaints were consolidated by the court, all alleged that Number Nine misrepresented the nature of its product line and its future prospects in the context of its IPO and in subsequent quarters between May 26, 1995 through January 31, 1996. The misrepresentations alleged are that the Company did not provide a true and comprehensive disclosure regarding the market demand for its products. The complaint alleges that the Company misled investors by giving the impression that it was succeeding as a result of its breadth of product offerings, when in fact many of its early generation and lower-end products were or were becoming obsolete, and the Company was highly dependent on the success of its high-end product line. The complaint also alleges that the financial statements contained in the IPO prospectus and thus released during subsequent quarters violated generally accepted accounting procedures because they failed to mark down inventory which the Company knew was obsolete at the time the statements were made. Such a mark down would have substantially reduced the Company's net income figures. Moreover, the Complaint alleges alleges were not disclosed were the Company's exposure to price increases for inputs such as VRAM and DRAM hardware, and the Company's unstable relationships with major customers. Based on these allegations, plaintiff asserts violations of sections 11, 12(a)(2), and 15 of the Securities Act of 1933 and section 10(b) and 20(a) of the Securities Exchange Act of 1934 and rule 10b-5 promulgated thereunder.