According to the docket dated April 23, 2002, on April 11, 2002, the Court entered an Order dismissing the action without prejudice. Earlier, on March 1, 2000, the Court issued an Order granting in part and denying in part Defendant AgriBioTech Inc.’s motion to dismiss. It was also ordered that all claims against AgriBioTech are stayed pending withdrawal of AgriBioTech's petition for Chapter 11 Bankruptcy relief. All claims asserted against certain Individual Defendants were dismissed. It was further ordered that the parties file a status report advising the Court as to the status of the Bankruptcy proceedings.
The original complaint alleges that the public investors who invested in AgriBioTech based on the Company's reported financial results, its representations about the success of the Company's consolidation strategy and its forecasts of strong revenue and earnings growth in F98-F99, paid as high as $29-1/2 per share for AgriBioTech stock during the Class Period and have suffered millions of dollars in damage as a result of defendants' fraud. During F97 and F98, AgriBioTech reported favorable financial results with strong revenue growth and profitability causing the Company's stock to trade at artificially inflated levels. Ultimately, AgriBioTech was forced by the SEC to change its accounting practices with regard to acquisitions and to disclose the extent of its accounting manipulations in prior quarters. AgriBioTech's reported revenues were, as a result of the manipulations, overstated by 20% in F97 and F98 and the loss it had actually incurred for F97 and F98 was converted into a profit. Upon these startling revelations, AgriBioTech's stock price declined to $8-1/8 per share, a more than 71% reduction from its Class Period high of $29-1/2.
Several purported class actions have also been filed in U.S. District Courts for the District of Nevada and Southern District of New York. The Complaints allege that the defendants violated the federal securities laws (Section 10(b) and 20(a) of the Securities Exchange Act of 1934) by misrepresenting or failing to disclose material information about ABT's strategies concerning its aggressive pursuit of pending and additional acquisitions, and its plans to secure and complete a buyout of all or part of the Company. The complaints further allege that as a result of defendants' false and misleading statements and omissions concerning ABT's strategies, the price of ABT stock was artificially inflated during the Class Period.