According to the docket posted, on July 22, 1998, the Court entered the Minutes granting defendants' motion to dismiss. On August 24, 1998, the Court entered the Order by U.S. District Judge Stephen V. Wilson dismissing the plaintiffs' consolidated Amended Complaint with prejudice and terminating case.
As summarized by the Company’s FORM 10-Q for the quarterly period ended March 28, 1998, b etween December 12, 1997 and February 24, 1998, eight class action suits were filed against the Company and certain of its officers and directors. The plaintiffs in the actions purport to represent purchasers of the Company's common stock during various periods ranging from July 25, 1996 through December 2, 1997 (collectively, the "Class Periods"). The complaints allege that the Company issued false and misleading statements during the respective Class Periods concerning the outlook for the Company's operations and earnings and that the Company issued false and misleading financial statements in fiscal years 1996 and 1997 by improperly deferring the write-down of obsolete inventory. The complaints seek compensatory damages for the purported class members in an unspecified amount. On April 6, 1998, the court ordered the cases consolidated and designated the plaintiffs in the first case filed as the lead plaintiffs and the law firm representing such plaintiffs as lead counsel. The lead counsel filed an amended consolidated complaint on April 27, 1998. On May 11, 1998, the Company filed a motion to dismiss the amended consolidated complaint.
The original complaint alleged that defendants violated the federal securities laws (Sections 10(b) and 20(a) of the Securities Exchange Act of 1934) by misrepresenting or failing to disclose material information about Western Digital's financial results, operations, customers, and future prospects. The complaint alleged that defendants issued false and misleading press releases and financial statements for 1996 and 1997 and improperly deferred the write down of its obsolete computer hard drive inventory. The complaint also alleged that high-ranking Western Digital insiders disposed of thousands of shares of their individual holdings of Western Digital stock during the Class Period at artificially inflated prices, netting themselves millions of dollars in proceeds from the sales.