According to the latest docket posted, on September 15, 1999, the Court issued the Opinion and Order granting the motion to dismiss the consolidated class action complaint. U.S. District Judge Sim Lake further issued the Final Judgment dismissing the case with prejudice and the case was closed.
As previously reported by the Company’s FORM 10-Q for the quarterly period ended June 30, 1999, between October 21, 1998 and December 4, 1998, 20 essentially identical, purported securities class action lawsuits were filed against the Company and certain of its current and former officers and directors. On January 6, 1999, the District Court entered an order consolidating the securities class action litigation into a single action entitled In re Zapata Corporation Securities Litigation, H-98-3498, and on January 19, 1999, entered an order appointing lead plaintiffs and approving lead plaintiffs' selection of co-lead counsel. On February 16, 1999, plaintiffs filed a consolidated amended complaint in the District Court. The defendants filed a motion to dismiss to the amended consolidated complaint on April 2, 1999.
The original complaint alleges that defendants falsely represented that Zapata was successfully implementing its highly publicized Internet strategy, including by agreeing to acquire 25 different Internet businesses, and by preparing to spin-off its Internet business. Plaintiffs allege that defendants' misleading positive statements artificially inflated the price of Zapata stock, causing the price of Zapata shares to double overnight, from approximately $11 per share at the beginning of the Class Period to close at $21.50 on July 6, 1998. Zapata's insiders took advantage of this run-up in the price of Zapata stock, selling off more than $5.6 million of their Zapata holdings at peak prices. On October 15, 1998, Zapata disclosed that it would not be pursuing a single one of the acquisitions it had so vigorously touted during the Class Period, and revealed that it had abandoned its Internet strategy. Following these disclosures, Zapata closed at just $6.875 per share.