On May 24, 2002, U.S. District Judge Daniel T. K. Hurley issued an Order and Final Judgment approving the proposed settlement and the case was closed. Earlier, on December 7, 2000, Judge Hurley granted in part and denied in part the motion to dismiss the second amended complaint against certain Individual Defendants.
According to a Press Release dated 09/11/98, the complaint charges Able Telcom and certain officers and directors of the Company during the relevant time period with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The complaint alleges that defendants issued a series of materially false and misleading statements concerning Able Telcom's revenues, earnings, financial condition, and growth prospects. Because of the issuance of a series of false and misleading statements, the price of Able Telcom common stock was artificially inflated during the Class Period.
In particular the complaint alleges that, among others things, defendants (i)
failed to timely and fully disclose the financial condition of one of its
acquisitions; (ii) misrepresented that following Able Telcom's acquisition of
MFS Network Technologies, Inc. ("NT") certain key senior executives of NT would stay on to work for Able Telcom when defendants knew that they would not stay on; (iii) failed to timely and fully disclose the dilution of shareholder value due to the Company's issuance of "bottomless" convertible bonds to finance the NT acquisition and (iv) failed to disclose that the Company's financing of the NT acquisition violated Able Telcom's prior debt arrangements, causing the Company to become immediately liable for the repayment of its long term debt.