Case Page

 

Case Status:    SETTLED
On or around 05/10/2000 (Date of order of final judgment)

Filing Date: August 14, 1998

According to the Company’s Form 10-K for the fiscal year ended September 30, 2001, the Company agreed to settle the class action complaints and a companion derivative lawsuit for $111,000,000. The Company recorded a charge of $101,106,000 in fiscal 1999 for the shareholder litigation settlement, which consisted of a $111,000,000 settlement plus $10,106,000 of legal fees offset by $20,000,000 of insurance proceeds. In fiscal 2000, the Company received an additional $17,000,000 of insurance proceeds.

On November 29, 1999, IKON Office Solutions agreed in the U.S. District Court for the E.D. of Pennsylvania to pay $111 million to settle shareholder class action and derivative lawsuits that accuse the company of inflating its stock price for several years by making false financial statements. Significantly, IKON also pledged to cooperate with the plaintiffs' lawyers in their continuing litigation against the company's auditors, Ernst & Young, according to plaintiffs' co-lead counsel Daniel Berger of Berger & Montague. U.S. District Senior Judge Marvin Katz has already signed an order granting preliminary approval of the proposed settlement so that lawyers can begin sending notices to shareholders.

In the Form 10-K405/A dated January 22, 1999, the Consolidated Complaint (the "Complaint") was filed on December 18, 1998 and alleges that the defendants publicly disseminated a series of false and misleading statements, including filings with the Securities and Exchange Commission, concerning the Company's revenue, profitability and financial condition, in violation of the federal securities laws. The plaintiffs seek to represent a class of persons who purchased or acquired the Company's common stock between January 24, 1996 and August 14, 1998. The Complaint seeks unspecified compensatory and punitive damages, prejudgment interest, attorneys' fees and costs.

The original Complaint names IKON and certain of the Company's officers and directors as defendants, alleging that these parties violated Sections 10(b) and 20(a) of the Exchange Act, as well as SEC Rule 10b-5 promulgated thereunder, by originating a series of materially misleading statements and omissions concerning the Company's acquisitions and operations during the Class Period. Specifically, Plaintiff alleges, among other things, that the defendants misrepresented that the Company was successfully integrating the operations of various acquired companies, when, in fact, IKON was experiencing severe difficulties assimilating those acquisitions. In addition, Plaintiff alleges that IKON touted the Company's acquisition-based growth strategy knowing that IKON lacked both the management structure and internal financial controls to accurately report lease defaults and accounts receivable reserves. These misrepresentations and omissions had the aggregate effect of artificially inflating the share prices of IKON's stock, until the truth was revealed at the end of the Class Period. IKON's stock fell from a Class Period high of $36.25 per share to close at $9 15/16 on August 14, 1998.

COMPANY INFORMATION:

Sector: Technology
Industry: Office Equipment
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: IKN
Company Market: New York SE
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: E.D. Pennsylvania
DOCKET #: 98-CV-04286
JUDGE: Hon. Marvin Katz
DATE FILED: 08/14/1998
CLASS PERIOD START: 10/15/1997
CLASS PERIOD END: 08/13/1998
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernard M. Gross
    1500 Walnut Street, Suite 600, Bernard M. Gross, PA 19102
    215.561.3600 215.561.3000 · bmgross@BernardMGross.com
  2. Chitwood & Harley LLP (Atlanta)
    7945 East Paces Ferry Road, 1400 Resurgens Plaza, Chitwood & Harley LLP (Atlanta), GA 30326
    404.266.1650 · info@chitwoodlaw.com
  3. Keller Rohrback LLP (Seattle)
    1201 Third Avenue, Suite 3200, Keller Rohrback LLP (Seattle), WA 98101-3052
    800.776.6044 206.623.3384 · investor@kellerrohrback.com
  4. Wolf Popper, LLP
    845 Third Avenue, Wolf Popper, LLP, NY 10022-6689
    877.370.7703 212.486.2093 · IRRep@wolfpopper.com
No Document Title Filing Date
COURT: E.D. Pennsylvania
DOCKET #: 98-CV-04286
JUDGE: Hon. Marvin Katz
DATE FILED: 08/04/1999
CLASS PERIOD START: 01/24/1996
CLASS PERIOD END: 08/14/1998
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Bernard M. Gross
    1500 Walnut Street, Suite 600, Bernard M. Gross, PA 19102
    215.561.3600 215.561.3000 · bmgross@BernardMGross.com
  3. Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY)
    One Pennsylvania Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (New York, NY), NY 10119-1065
    212.594.5300 ·
  4. Savett Frutkin Podell & Ryan, P.C.

    800.993.3233 · sfprpc@op.net
  5. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
No Document Title Filing Date
No Document Title Filing Date