According to the docket, on April 2, 2003, the Court entered the Order and Final Judgment signed by U.S. District Judge Barbara M. G. Lynn on March 31, 2003. The Court approved the Settlement as set forth in the Stipulation of Settlement dated 4/5/2002 (the"Stipulation") and in the Stipulation regarding Texas Property and Casualty Insurance Guaranty Association. The Court further awarded representative plaintiffs' counsel attorneys' fees in the amount of $1,065,000 (30% of the settlement fund) and reimbursement of litigation expenses in the amount of $285,980.22.
By the Notice of Pendency and Proposed Settlements, a settlement, as set forth in the Stipulation of Settlement dated as of April 5, 2002, in the amount of $3,250,000 in cash, has been reached by the parties, which settlement is subject to approval by the Court. Further, a settlement, for an additional $300,000, has been proposed pursuant to a Stipulation Re: Settlement of Class Claims With Texas Property and Casualty Insurance Guaranty Association. A hearing (the “Settlement Hearing”) will be held on October 11, 2002, to consider whether the settlements should be approved.
As reported by the Company’s Form 10-Q For The Quarterly Period Ended September 30, 1999, pursuant to an Order entered by the Court on February 24, 1999, plaintiffs' time for filing the consolidated amended complaint was extended from February 24, 1999 to March 3, 1999. Plaintiffs filed their amended complaint on March 3, 1999. Defendants filed a motion to dismiss on April 19,1999, plaintiffs filed an opposition to the motion on May 24, 1999, and defendants filed a reply brief on June 12, 1999. A hearing on the motion to dismiss was held on July 15, 1999. By Order dated July 15, 1999, the Court denied defendants' motion.
Plaintiffs filed a motion for the appointment of lead plaintiff and lead plaintiffs' counsel on October 20, 1998. Plaintiff proposed the appointment of three law firms to serve as "Co-Lead Counsel," Weiss & Yourman, Abbey, Gardy & Squitieri, and Milberg Weiss Bershad Hynes & Lerach, LLC. On November 12, 1998, defendants filed a statement of non-opposition to the plaintiffs' motion. The Court granted plaintiffs' motion on January 5, 1999.
A total of fourteen class action complaints were filed against Source
Media, Inc. ("SMI") and certain of its officers and directors in the United
States District Court for the Northern District of Texas asserting violations of
sections 10(b) and 20(a) of the Securities Exchange Act and Rule 10b-5 of the
accompanying regulations. The fourteen complaints were consolidated by Judge
Buchmeyer into the first filed case, Hartsell, et al. v. Source Media, Inc., et
al., Civil Action No. 398-CV-1980-R (filed August 21, 1998), on October 9, 1998.
The original complaint alleges that on or about October 30, 1997, Source Media announced that it had purchased certain of the electronic publishing assets of Brite Voice Systems, Inc. ("Brite") for $35.6 million and certain of the assets of Voice News Network ("VNN"), for $9.0 million (the "October 1997 Acquisitions"). The assets purchased in the October 1997 Acquisitions consisted primarily of contract rights and equipment used in the Company's voice information services business. The Complaint alleges that, in connection with the October 1997 Acquisitions, defendants wrongfully concealed from their shareholders lost business and assets, and accounting irregularities which have caused an extraordinary overstatement of the Company's revenues, earnings and assets. In addition, plaintiff alleges that defendants disseminated materially false and misleading statements regarding the Company's current financial performance and future business prospects. The defendants include Source Media and certain of its officers and directors. The Complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10-b(5) by, among other things, issuing false misleading statements regarding the October 1997 Acquisitions, Source Media's financial condition, as well as its present and future business prospects.