According to the Memorandum and Order entered on January 4, 2001, U.S. District Judge Colleen McMahon approved the class action settlement and awarded Plaintiffs’ Counsel fees and reimbursement expenses from the Settlement Fund. Earlier, the Court entered the Order and Final Judgment on December 19, 2000, finding the Settlement fair and reasonable. The Plaintiffs’ Counsel was awarded fees in the amount of 25% of the Gross Settlement Fund and the Settlement Securities and $280,830.17 in reimbursement of expenses with interest. The case was closed. In the Company’s Form 10-K for the fiscal year ended December 31, 2002, the Company’s insurance carrier and Former Parent paid $12,500,000 and Deloitte & Touche LLP paid $2,350,000. In addition, ABNH issued and distributed 1,460,000 shares of our common stock, of which 365,000 shares were issued and distributed in February 2001 and the remaining 1,095,000 shares were issued and distributed in May 2002. The Company also issued and distributed warrants to purchase 863,647 shares of common stock, at an exercise price of $6.00 per share.
The original Complaint alleges that defendants violated Sections 11, 12(a) and 15 of the Securities Act and Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, in connection with, among other things, their dissemination of a materially false and misleading Registration Statement, press releases, public statements and other materials concerning ABH's business, financial condition, and financial results for fiscal years 1996 through 1998. The Complaint further alleges that ABH improperly recognized revenue during these periods in violation of Generally Accepted Accounting Principles and, as a result, must restate its financial results for these periods. In this regard, on January 19, 1999, ABH announced that it will restate its financial results for its second and third fiscal quarters ended June 30, 1998 and September 30, 1998, respectively. The Company further announced that its Audit Committee has retained special legal counsel and Deloitte & Touche, LLP, its auditors, to investigate certain transactions during the second and third quarters of 1998 which resulted in the inappropriate recognition of revenue causing the overstatement of the Company's revenues, sales, and net income. Also, on January 25, 1999, the Company further announced that its financial statements for the first three quarters of 1998 would have to be
restated, and that net income for the years 1996 and 1997 was overstated by approximately 10%. The price of ABH common stock closed at $15-1/16 per share on January 15, 1999. After ABH made its stunning announcements, trading of its stock was halted at $3 per share on January 25, 1999, a loss in excess of 75%.