On May 26, 2006, the Court entered the Order signed by U.S. District Judge Melinda Harmon Preliminarily Approving Settlement and Providing for Notice. On September 15, 2006, the Court entered the Final Judgment and Order of Dismissal with Prejudice. The settlement was approved.
According to the Stipulation of Settlement, defendants will pay a total of six hundred thousand dollars ($600,000) as the settlement fund. The settlement is subject to approval of the Court.
Previously, as summarized by the same Stipulation of Settlement, on November 30, 1999, the Court appointed lead plaintiffs under §211)(a)(3)(13) of the Exchange Act and approved lead plaintiffs' selection of Lead Counsel. On January 26, 2000, the six class actions and the Derivative Action were consolidated as In re U.S. Liquids Securities Litigation, Master File No. H-99-2785 (the "Litigation"). On March 2, 2000, lead plaintiffs filed a Consolidated Complaint for Violations of the Securities Exchange Act of 1934. On April 14, 2000, defendants filed a motion to dismiss the Consolidated Complaint. On January 23, 2001, the Court entered a Memorandum and Order of Partial Dismissal which dismissed the § 10(b) claims while upholding the § 11 claims concerning the Offering. On August 12, 2004, the Company filed a petition for bankruptcy under Title 11 of Chapter 7 of the United States Bankruptcy Code and is now defunct. The Class's claims against USL were extinguished in the Company's bankruptcy proceeding. The Settling Parties reached an agreement to settle this Litigation after extensive discovery (including discovery regarding each Defendants' financial condition), arm's-length negotiations, and the substantial assistance of Judge J. Lawrence Irving (Ret.), a highly respected retired United States District Court Judge with substantial experience in the mediation of complex civil actions.
The original Complaint charges that defendants violated the U.S. securities laws by issuing materially false and misleading statements and by omitting to disclose material facts, required to be disclosed, in order to make the statements issued not materially false and misleading throughout the Class Period. In particular, the Complaint alleges that defendants falsely represented that the Company was in material compliance with applicable environmental laws when defendants knew, or were reckless in not knowing, that certain of the Company's employees, including the Vice President in charge of the Company's Detroit, Michigan facility, had ordered and supervised an illegal hazardous waste disposal program involving the discharge of untreated toxic liquid waste directly into the Detroit sewer systems.