Case Page

 

Case Status:    SETTLED
On or around 08/01/2006 (Date of order of final judgment)

Filing Date: June 23, 1997

On August 1, 2006, the Court entered the Final Judgment and Order of Dismissal with Prejudice of All Claims. The settlement, in the amount of $2,179,538.91 in cash, with the plaintiffs and two remaining individual defendants was approved.

According to the latest docket posted on February 26, 2002, the Court entered the Final Judgment and Order of Dismissal with Prejudice of all claims against the settling defendants Arthur Anderson, Merrill Lynch & Co., Alex Brown & Sons, Inc. and Morgan Stanley & Co. The case against the settling defendants was administratively terminated. The case continued as to the remaining individual defendants. On August 2, 2002, the plaintiffs filed Second Consolidated and Amended Class Action Complaint and the remaining individual defendants responded by filing a motion to dismiss on October 4, 2002. On June 3, 2005, an updated Stipulation of Settlement was filed between plaintiffs and two individual defendants.

In a press release dated December 15, 2001, a $20 million settlement from the defunct Golden company's underwriters and Big Five accountants appears imminent, say attorneys working on a class-action securities case initiated four years ago. A total of 24 class-action complaints have been filed in Colorado courts against Boston Chicken's underwriters, accountants and top executives. They accuse them of concealing huge loan losses and weak sales that torpedoed the company's high-flying stock and sent the company into bankruptcy. Attorney Karl Barth said Friday that proceeds of the pending settlement from accounting giant Arthur Andersen and investment bankers Merrill Lynch, Morgan Stanley and Alex Brown & Sons will be distributed to qualified shareholders who acquired the company's stock between Feb. 6, 1995, and Oct. 4, 1998.

The Complaint alleged claims for violation of certain federal and state securities laws. Plaintiffs sought damages based upon allegations that the defendants issued false and misleading public statements relating to BCI’s business position and future prospects, and that certain of BCI’s financial statements and public offering documents were materially inaccurate and/or failed to reflect all required information. Specifically, Plaintiffs alleged that defendants devised and executed a scheme to take a business—fast food stores in this case—and structure it in a fashion that permitted them to: (i) hide $155.5 million in losses during 1996 and $325 million during 1997 while (ii) retaining the revenues for BCI long enough to lure in investors’
monies with reports of sensational profits. The mechanism used to further this alleged scheme was a number of purportedly independent marketing affiliates commonly referred to as Financed Area Developers (“FADs”) that conducted BCI’s retail business of selling fast food. Supported by “loans” from BCI, these affiliates paid back huge fees and royalties to BCI—BCI reported nearly $800 million in
revenues for 1996—but kept their losses to themselves. Plaintiffs alleged
that by excluding these enormous losses from its own books in 1996 and 1997, and failing to recognize $128 million in bad loans throughout almost the entire Class Period, BCI used this arrangement to report false “profits” and prime the securities market for a quick series of public offerings.

Plaintiffs also alleged that, as investors discovered only later, BCI’s financial statements were fraudulent. Throughout the Class Period, BCI listed the fees and royalties from the FADs on its income statements and loans to the FADs as an asset. Plaintiffs alleged that at no point during the Class Period, however, did BCI disclose any information about the individual financial status of the FADs, such as
losses or their ability to pay fees, royalties and loan payments back to BCI without first borrowing more money from BCI. Significantly, Plaintiffs alleged that BCI’s financial statements and public offering documents failed to disclose the enormous losses that the FADs incurred as BCI’s expansion plan unfolded. Indeed, Plaintiffs alleged that in just 1996 alone, these losses totaled $155.5 million, and that investors knew nothing of this until later.

NOTE:The claims against Boston Chicken, Inc., were stayed when BCI commenced bankruptcy proceedings in the United States Bankruptcy Court for the District of Arizona.

COMPANY INFORMATION:

Sector: Services
Industry: Restaurants
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: BOST
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: D. Colorado
DOCKET #: 97-CV-1308
JUDGE: Hon. Walker D. Miller
DATE FILED: 06/23/1997
CLASS PERIOD START: 08/13/1996
CLASS PERIOD END: 05/30/1997
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  2. Dyer & Shuman, LLP
    801 East 17th Avenue, Dyer & Shuman, LLP, CO 80218-1417
    303.861.3003 800.711.6483 · info@dyershuman.com
  3. Hagens Berman & Mitchell
    2425 East Camelback Road; Suite 620, Hagens Berman & Mitchell, AZ 85016
    602.840.5900. 602.840.3012 · info@hagens-berman.com
  4. Jeffrey M. Villanueva, PC
    1625 17th Street #305, Jeffrey M. Villanueva, PC, CO 80202
    303.357.7050 ·
  5. Shughart, Thomson & Kilroy, P.C.
    1050 17th Street #2350, Shughart, Thomson & Kilroy, P.C., CO 80265
    303.572.9300 ·
No Document Title Filing Date
COURT: D. Colorado
DOCKET #: 97-CV-1308
JUDGE: Hon. Walker D. Miller
DATE FILED: 08/02/2002
CLASS PERIOD START: 02/06/1995
CLASS PERIOD END: 10/04/1998
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Bader, Villanueva & Feder, P.C.
    1660 Wynkoop Street, Suite 1100, Bader, Villanueva & Feder, P.C., CO 80202
    303.534.1700 ·
  2. Berger & Montague PC
    1622 Locust Street, Berger & Montague PC, PA 19103
    800.424.6690 215.875.4604 · investorprotect@bm.net
  3. Dyer & Shuman, LLP
    801 East 17th Avenue, Dyer & Shuman, LLP, CO 80218-1417
    303.861.3003 800.711.6483 · info@dyershuman.com
  4. Hagens Berman, LLP
    1301 Fifth Avenue Suite 2900, Hagens Berman, LLP, WA 98101
    206.623.7292 · info@hagens-berman.com
  5. Jeffrey M. Villanueva, PC
    1625 17th Street #305, Jeffrey M. Villanueva, PC, CO 80202
    303.357.7050 ·
No Document Title Filing Date
No Document Title Filing Date