According to a news article dated December 6, 1999, PLC Systems agreed to a settlement for $1.5 million, to be paid for by their insurance carriers.
According to PLC Systems' SEC 10-K filing for the fiscal year ended December 31, 2000, on February 9, 2001, the Court issued an Order approving the settlement of the federal suit and entered a judgment of dismissal. The settlement of the federal
suit did not have a material impact on the Company's financial statements.
Additionally, in July 1997, an FDA advisory panel recommended against approval of the Company's application to market the HL1 in the United States. Following this
recommendation, the Company was named as defendant in 21 purported class action lawsuits filed between August 1997 and November 1997 in the United States
District Court for the District of Massachusetts. The lawsuits sought an
unspecified amount of damages in connection with alleged violations of the
federal securities laws based on the Company's failure to obtain a favorable FDA
panel recommendation in 1997. Nineteen of these complaints were consolidated by
the court into a single action for pretrial purposes (hereafter referred to as
the "federal suit"). Two of these suits were voluntarily dismissed. The Company
moved to dismiss all claims in the federal suit. On March 26, 1999, the court
issued an order dismissing some, but not all, of the claims in the federal suit.
The parties filed cross motions for reconsideration and on October 12, 1999, the
court dismissed additional, but not all remaining claims in the federal suit.
The complaint alleges that PLC Systems, Inc. issued materially false and misleading statements and omitted from disclosure material facts concerning the safety, efficacy and clinical trial results of the Heart Laser TMR system. The complaint also alleges that the defendants made knowingly false and misleading statements about the prospect for PLC to obtain approval from the FDA to market the Heart Laser. These continued false public statements artificially inflated PLC's stock price causing purchasers of PLC stock to buy at an inflated price during the period of 8/15/97 to 7/25/97.