According to the Order and Final Judgment entered February 22, 2001, the Plan of Allocation of Settlement Proceeds was approved. The Court awards Plaintiffs' Counsel attorney fees and reimbursement of expenses in the amount of 40 percent of the cash portion of the Settlement Fund and together with interest earned thereon. U.S. District Judge Malcolm F. Marsh ordered the case dismissed with prejudice as to the Representative Plaintiffs and the other members of the Settlement Class against Defendants.
Several purported shareholder class action lawsuits were filed in various U.S. District Courts around the country against certain officers and directors of Southern Pacific Funding Corp. (NYSE:SFC) in October 1998. Eventually, the actions were consolidated and moved to the United States District Court for the District of Oregon. Defendants produced and plaintiffs' counsel reviewed tens of thousands of pages of company documents during the prosecution of this case. Both sides vigorously litigated this case throughout.
The original complaint charges that certain of Southern Pacific's officers and directors, as well as a controlling shareholder -- Imperial Credit Industries, Inc. -- violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 by, inter alia, misleading investors via the dissemination of materially false and misleading information to the investing public which overstated Southern Pacific's revenues and earnings in the Company's financial statements for third and fourth quarters of fiscal 1997 and the first and second quarters of fiscal 1998. Specifically, the Complaint alleges that during the Class Period, defendants assured investors that the Company had tight control over its loan portfolios, had minimized the risk of loan prepayment and default, directly controlled and provided the highest level of service to its growing loan portfolio, and stated that they were "confident that we'll not only continue, but improve upon, the performance we experienced in 1997 into 1998 and beyond."
The action was filed on behalf of purchasers of the company's securities: 6.75% Convertible Subordinated notes and/or the 11.5% Senior notes during the period from October 9, 1997 through October 1, 1998.