Case Page

 

Case Status:    SETTLED
On or around 02/19/2002 (Other)

Filing Date: November 05, 1997

According to the Company’s Form 10-Q, for the quarter ended September 30, 2002, in February 2002, the California Superior Court for Santa Clara County entered its preliminary approval of an agreement to settle the consolidated state court class action lawsuit. Under the terms of the class action settlement, SONICblue will contribute 2,401,501 shares of SONICblue common stock and Deloitte & Touche will contribute up to $250,000 in full settlement of all claims. In April 2002, the Superior Court granted final approval to that settlement, dismissing the case. In May 2002, the Superior Court also approved the settlement of the related California derivative
litigation. The derivative settlement calls for the defendants to contribute to
the settlement their respective benefits under certain directors and officers
insurance policies in an amount of approximately $4.6 million which, net of
attorneys' fees and litigation costs, would be paid to SONICblue, which payments
have been made.

Although the federal action was previously dismissed, the class in the federal action is settling with the state action. According to the Notice of Settlement for the state action, all of these state and federal class actions are herein referred to collectively as the "Litigation."

By the docket dated June 29, 1998, on April 29, 1998, Plaintiff's filed a motion for voluntary dismissal of action without prejudice. The Court entered the Minutes on June 19, 1998, granting the motion and the federal action was terminated.

Since November 1997, a number of complaints have been filed in federal and
state courts seeking an unspecified amount of damages on behalf of an alleged
class of persons who purchased shares of the Company's common stock at various
times between April 18, 1996 and November 3, 1997. The complaints name as
defendants the Company, certain of its officers and former officers, and certain
directors of the Company, asserting that they violated federal and state
securities laws by misrepresenting and failing to disclose certain information
about the Company's business. In addition, certain stockholders have filed
derivative actions in the state courts of California and Delaware seeking
recovery on behalf of the Company, alleging, among other things, breach of
fiduciary duties by such individual defendants.

Plaintiff alleges that during the Class Period defendants' fraudulently or recklessly inflated S3's earnings and revenues by improperly recognizing between $40 million and $70 million in revenues from products shipped to distributors which were not final sales. Defendants' improper recognition of revenue violated the Company's established revenue recognition policy and Generally Accepted Accounting Principles, and caused the Company's financial statements to be materially overstated.

COMPANY INFORMATION:

Sector: Technology
Industry: Computer Networks
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: SIII
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: N.D. California
DOCKET #: 97-CV-4066
JUDGE: Hon. Vaughn R. Walker
DATE FILED: 11/05/1997
CLASS PERIOD START: 07/15/1996
CLASS PERIOD END: 11/03/1997
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bernstein Liebhard & Lifshitz, LLP (New York)
    10 E. 40th Street, 22nd Floor, Bernstein Liebhard & Lifshitz, LLP (New York), NY 10016
    800.217.1522 · info@bernlieb.com
  2. Kaufman, Miller, Dickstein & Grunspan

    ·
  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. Spector Roseman & Kodroff (San Diego)
    1818 Market Street, Suite 2500, Spector Roseman & Kodroff (San Diego), PA 19103
    215.496.0300 215.496.6611 ·
  5. Wolf Popper, LLP
    845 Third Avenue, Wolf Popper, LLP, NY 10022-6689
    877.370.7703 212.486.2093 · IRRep@wolfpopper.com
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