On July 15, 2003, the settlement fairness hearing was held before U.S. District Judge Edward F. Harrington. By the Order and Final Judgment entered on July 22, 2003, the court approved the settlement, the plan of allocation, and awarded plaintiffs’ counsel fees and expenses. Lead Plaintiff Elizabeth Alpert was also awarded reimbursement of costs and expenses in the amount of $1750.00. The Court dismissed the Complaint and the Action with prejudice. Previously, on April 3, 2003, Judge Edward F. Harrington allowed the Stipulation of dismissal of individual defendant, the Company's CEO.
By the Notice of Pendency of Class Action, a hearing is scheduled on July 15, 2003 at 2:00 p.m. to determine: (a) whether for purposes of settlement, the Class should be certified pursuant to Rule 23 of the Federal Rules of Civil Procedure, consisting of purchasers of Lycos common stock between January 4, 1999 and February 9, 1999, inclusive; (b) whether the proposed settlement of the Action, which includes the creation of a settlement fund in the gross amount of $5,675,000 plus interest, is fair, reasonable and adequate and should be approved by the Court; (c) whether an Order and Final Judgment should be entered dismissing all claims in the Action against the Defendants and dismissing the Action with prejudice, and without costs; (d) whether the Plan of Distribution of the Net Settlement Fund should be approved; and (e) whether to award attorneys' fees and expenses requested by Plaintiffs' Counsel
As summarized in the Notice, on July 7, 1999 the Court issued an Order consolidating the actions and appointing Lead Plaintiffs and approving the Lead Plaintiffs' selection of lead counsel. On September 7, 1999, Lead Plaintiffs filed the Complaint. On October 22, 1999, Defendants filed a motion to dismiss the Complaint. On April 5, 2001, the Court issued an order denying Defendants' motion to dismiss. On May 7, 2001, Defendants filed an Answer to the Complaint denying the material allegations set forth therein, and asserting that they did not commit any wrongdoing and that they have no liability whatsoever for the alleged acts or omissions alleged therein. On June 27, 2001, Lead Plaintiffs filed a Motion for Class Certification, seeking an order certifying a class of purchasers of Lycos common stock. Lead Plaintiffs Elizabeth Alpert, Theresa DeAngelo, and Michael Nicolosi, and Defendant Lycos entered a Stipulation and Agreement of Compromise and Settlement, dated March 11, 2003, setting forth the terms and conditions constituting a proposed final settlement of the Action, subject to the approval of the Court. The Parties to the Settlement Agreement and Defendant Robert J. Davis have also entered a Stipulation of Dismissal, dated as of March 11, 2003, to dismiss Davis from this Action without prejudice.
The original Complaint names Lycos and its CEO 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 intentions to remain an "independent" entity. Specifically, the Complaint alleges that, throughout the Class Period, the defendants repeatedly misrepresented that Lycos would remain an independent company and would not enter into a merger transaction. On February 9, 1999, Lycos announced that it was entering into a merger transaction with USA Networks, Inc. In response to this announcement, Lycos share prices plummeted, falling from a February 8, 1999 close of $127.25 to a February 9, 1999 close of $94.25.