According to the docket posted, on December 13, 2000, the Court entered the Order and Final Judgment. The settlement was approved, and the Third Revised Consolidated Class Action Complaint was dismissed in its entirety on its merits, with prejudice, and without costs. The Court further entered that day the Order awarding Plaintiffs' Counsel attorneys’ fees of $3,375,000.00 and reimbursement for litigation expenses in the amount of $1,433,817.53. The case is closed.
As reported by the Form 10-Q for the quarter ended June 30, 2000, in July 2000, the company reached an agreement to settle the outstanding consolidated settlement that provides the plaintiffs a cash payment of $11,000,000 million to be made by the company's insurance carrier and warrants to be issued by the company having an aggregate value of $11,500,000 that are exercisable into the company's common stock at a ten percent discount to the market price at the time the settlement is approved by the court. The company expects final documentation and court approval to occur before year end.
According to the Company's Form 10-Q for the quarter ended June 30, 1999, on May 21,1999, the cases were consolidated into a single class action and, on May 28, 1999, an amended consolidated class action complaint was filed with the District Court. An additional class action complaint was filed on behalf of purchasers of call options on July 1, 1999. The District Court consolidated that case with the previous action on July 30, 1999. Also, according to Wolf Haldenstein Adler Freeman & Herz LLP, in November 1999, the court denied the defendant's motion to dismiss the expanded class. Discovery in this case has resumed and on March 28, 2000, a revised consolidated complaint was filed with the court.
The original Complaint charges that Orbital and its two highest officers violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. The Complaint alleges that defendants issued a series of materially false and misleading financial statements and failed to reveal that the Company was employing fraudulent accounting methods which artificially inflated Orbital's earnings. After the close of trading on February 16, 1999, the Company announced that, due to the improper accounting treatment of certain items, the Company would materially restate earnings for the first three quarters of 1998. Its earnings had been decreasing in the first three quarters of 1998, not increasing as previously claimed. The Complaint further alleges that defendants utilized their inside information regarding the artificial inflation of the Company's stock price to sell significant amounts of their personal Orbital holdings, for proceeds of over $3 million.