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Case Status:    SETTLED
On or around 11/28/1997 (Date of order of final judgment)

Filing Date: June 13, 1996

According to the closing Order, dated November 25, 1997 from U.S. District Judge Edward F. Harrington of the United States District Court, District of Massachusetts, a settlement of three shareholder class actions received final court approval. On May 29, 1996, June 13, 1996 and April 29, 1997, certain of Discreet's shareholders filed class action lawsuits alleging violations of federal securities laws and other claims against Discreet and certain of its officers and directors, among others. The three lawsuits were filed in the Superior Court of the State of California, the United States District Court, District of Massachusetts and the United States District Court, Northern District of California, respectively. Under the $10,800,000 settlement, Discreet contributed approximately $7,400,000 from its own funds, with the remainder provided by insurance.

Another similar purported class action complaint was filed in the Northern District of California on April 28, 1997, entitled Anton Paparella, Sandra Esner and
Geoffrey L. Sherwood, On Behalf of Themselves and All Others Similarly
Situated vs. Discreet Logic Inc., et al., Case No. C-97-1570. The complaint alleges that Discreet Logic and certain of its officers and directors and its underwriters violated federal securities laws by making misrepresentations regarding Discreet's successful development and introduction of new products, its expert management team and forecasts of strong revenue and earnings growth. The complaint alleges that this permitted Discreet and its insiders to complete a stock sale in November 1995 in which they sold 3.6 million shares of Discreet stock at $30.25 per share for $109 million. Then, the complaint alleges, two months later, Discreet's President and CEO resigned and Discreet reported earnings well below defendants' prior forecasts, causing Discreet stock to decline from $25 1/4 to $9 3/4. The complaint alleges that defendants' made further misrepresentations which caused Discreet stock to rise to $18 5/8 by late April 1996. However, then on May 1, 1996, Discreet revealed that its CFO had resigned, that its revenues for third quarter 1996 had fallen sharply, that Discreet expected to incur a loss for all of fiscal 1996, and that Discreet could not state when it would return to profitability. The complaint alleges that this caused Discreet's stock to decline to 8 3/4 per share from 17 3/8 in one day.

The original complaint filed in the U.S. District Court for the District of Massachusetts charges Discreet Logic and certain of its officers and directors with violations of the federal securities laws by, among other things, making false and misleading statements and omissions in connection with a secondary public offering effective November 14, 1995, and in subsequent public statements, concerning the Company's purported ability to maintain leading-edge technology and the performance and prospects of its visual effects products. These false statements and omissions served to inflate the market price of Discreet Logic common stock both in connection with its secondary public offering and thereafter on the open market until the true facts about Discreet Logic's business and ability to compete were ultimately disclosed. Plaintiff specifically alleges defendants knew, but withheld from the public, materially adverse facts which revealed that one of the Company's primary customers, Silicon Graphics, Inc. ("SGI"), was finalizing the introduction of a new workstation that would render the Company's principal product obsolete. As a result of the developments with and new product introductions by SGI,
Discreet Logic's customers would stop purchasing the Company's existing products, thus having a material adverse effect on the Company's performance. Historically, revenues derived from the sale of SGI workstations accounted for over 40% of the Company's revenues. Plaintiff further alleges that before the true facts about SGI's new product introductions were announced, corporate insiders sold significant amounts of Discreet Logic common stock realizing proceeds of in excess of $55 million, taking advantage of the inflated market price of Discreet Logic's common shares. Thus, when the true facts about the Company's business were finally disclosed on February 13, 1996, the price of Discreet Logic's common stock plummeted $12.50 per share to $11.25, a market loss of approximately 53%, on volume of 6.3 million shares trading.

The first complaint filed against Discreet Logic was filed on May 29, 1996, in the Superior Court of the State of California, City and County of San Francisco. Named as defendants are the Company, certain of the Company's former and existing directors, officers, and affiliates, and certain underwriters and financial analysts. The plaintiffs purport to represent a class of all persons who purchased the Company's common stock between September 13, 1995, and May 1, 1996. The complaint alleges violations of California law through material misrepresentations and omissions, among other things.

COMPANY INFORMATION:

Sector: Technology
Industry: Software & Programming
Headquarters: Canada

SECURITIES INFORMATION:

Ticker Symbol: DSLGF
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Massachusetts
DOCKET #: 96-CV-11232
JUDGE: Hon. Edward F. Harrington
DATE FILED: 06/13/1996
CLASS PERIOD START: 11/14/1995
CLASS PERIOD END: 02/13/1996
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 2109
    617.542.8300 617.230.0903 · info@bermanesq.com
  2. Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ)
    220 St. Paul Street, Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ), NJ 07090
    908.928.1700 908.301.9008 · blbg@blbglaw.com
  3. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  4. Rossbacher & Associates
    444 South Flower Street, Suite 2100, Rossbacher & Associates, CA 90071-2922
    213.895.6500 213.895.6161 · rossbach@SoCa.com
  5. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
No Document Title Filing Date
COURT: D. Massachusetts
DOCKET #: 96-CV-11232
JUDGE: Hon. Edward F. Harrington
DATE FILED: 10/02/1997
CLASS PERIOD START: 11/14/1995
CLASS PERIOD END: 02/13/1996
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 2109
    617.542.8300 617.230.0903 · info@bermanesq.com
  2. Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ)
    220 St. Paul Street, Bernstein Litowitz Berger & Grossmann LLP (Westfield, NJ), NJ 07090
    908.928.1700 908.301.9008 · blbg@blbglaw.com
No Document Title Filing Date
No Document Title Filing Date