According to the docket, on September 30, 2003, the settlement hearing was held before U.S. District Judge Ellen S. Huvelle. The Court issued the Order granting the motion for approval of the proposed settlement. The case is dismissed. That day, the Court also issued the Order granting in part, the motion for attorney fees. The Court awarded attorneys' fees of $9.1 million, plus interest, and reimbursement of $1,241,098.77 in litigation expenses.
In a press release dated July 23, 2003, a settlement has been proposed. The settlement will provide $32.5 million to pay claims. On September 30, 2003, the Court will have a hearing to decide whether to approve the settlement.
The lawsuit claimed that Defendants misled investors by issuing false and misleading information about Baan's income and earnings during the Class Period. The Defendants deny they did anything wrong. The Court did not make any determination of the merits of the claims or defenses, but both sides agreed to the settlement to avoid the risks and cost of a trial.
Various suits were filed in 1998. The first lawsuit (First Identified Complaint) was filed on behalf of purchasers of Baan Corp.'s American Depository Receipts ("ADR's") between January 30, 1998 and October 12, 1998. This complaint was later amended and consolidated.
The original complaint alleges that defendants improperly recognized revenues by utilizing fraudulent accounting methods. Specifically, the Complaint alleges that defendants: (1) recognized revenue from related party transactions that should have not been recognized; (2) prematurely recognized revenue from licensing transactions; and (3) improperly recognized revenue from transactions for which BAAN guaranteed payment. Plaintiff alleges that defendants' misleading positive statements artificially inflated the price of BAAN ADRs. On October 12, 1998, BAAN issued a press release announcing a loss of $.13 to $.16 per share for the third quarter of 1998. The market reacted sharply to the announcement with the BAAN ADRs falling $4-3/8 or 24%, to $13.50. BAAN's ADRs had traded as high as $55.50 as recently as April 20,1998.