On August 29, 2003, the Court entered the Order by U.S. District Judge Todd J. Campbell granting the motion for approval of attorneys' fees and reimbursement of expenses. Plaintiffs’ counsel was awarded attorneys’ fees in the amount of 31.4% of the Settlement Fund plus litigation expenses of $632,184.06. The Court further entered the Final Judgment and Order of Dismissal with Prejudice, granting the motion for final approval of the class action settlement as set forth in the Stipulation of Settlement. The case was terminated.
A Stipulation of Settlement was filed on June 16, 2003. According to the Notice Of Pendency and Settlement Of Class Action dated July 10, 2003, a partial settlement fund has been established in the amount of $3,400,000. The partial settlement resolves the claims against the Defendant KPMG LLP (formerly known as KPMG Peat Marwick).
On May 29, 2002, the Plaintiffs and defendant KPMG Peat Marwick filed separate motions for summary judgment. On September 30, 2002, the Court entered the Amended Partial Final Judgment signed by U.S. District Judge Todd J. Campbell. The partial settlement with the individual defendants was approved and the action was partially dismissed with prejudice. On October 2, 2002, the Court entered the Order denying the pending motions for summary judgment.
According to the Notice Of Partial Settlement Of Class Action dated March 19, 2002, a partial settlement fund has been established in the amount of $2,575,000. The partial settlement resolves the claims against the Individual Defendants Ronald L. Edmonds and Thomas P. Lewis but does not resolve the claims against KPMG Peat Marwick ("KPMG"), who is not a party to this Settlement.
As summarized by the Notice of Partial Settlement, on June 26, 2000, the Court entered an order consolidating the Actions and appointing Lead Plaintiffs. By Order entered June 26, 2000, the Court ordered that the caption of the Litigation would be In re VisionAmerica, Inc. Sec. Litig., Master File No. 3-00-0279. Plaintiffs filed their Consolidated Amended Class Action Complaint (the "First Consolidated Complaint") on August 25, 2000. On or about October 6, 2000, the defendants filed a motion to dismiss the First Consolidated Complaint. On February 23, 2001 the Court entered an order granting in part and denying in part Defendants' motion to dismiss. The Court dismissed only plaintiffs' claims against Andrew Miller. On March 23, 2001, plaintiffs filed their Motion to File Second Amended Consolidated Class Action Complaint (the "Second Consolidated Complaint"). The Second Consolidated Complaint added KPMG, VisionAmerica's auditor, as a defendant. On March 30, 2001, VisionAmerica filed for bankruptcy in the United States Bankruptcy Court for the Western District of Tennessee. Plaintiffs and the Individual Defendants participated in a mediation on June 25, 2001 and continued settlement discussions thereafter. On August 15, 2001, plaintiffs filed a Motion for Class Certification, seeking to certify a class of all persons who purchased VisionAmerica publicly traded securities between November 5, 1998 and March 24, 2000, inclusive ("Class Period"). On December 18, 2001, the Lead Plaintiffs and the Individual Defendants executed a Memorandum of Understanding, which set forth the basic terms of a settlement agreement.
The original complaint charges VisionAmerica and certain of its officers and directors with violations of the Securities Exchange Act of 1934. VisionAmerica represents itself as an eye-care company that provides facilities and services to opthamologists and optometrists to assist in the integration of primary, medical and surgical eye care. The complaint alleges that during the Class Period, VisionAmerica reported record results, and up until the end of the Class Period, defendants maintained that the Company's growth would continue through the third quarter 1999 and beyond. While defendants were publicly reporting profits during the Class Period, they used accounting trickery to keep the fiction of VisionAmerica's profitability alive by concealing the Company's failure to pay and account for almost $8.5 million in payroll taxes, penalties and interest which (i) understated the Company's liabilities; (ii) inflated the Company's net income; and (iii) bolstered the Company's cash position by defrauding the Government of taxes owed to it. On March 24, 2000, VisionAmerica revealed that it would restate its financial results for 1999 and part of 1998, for a second time. Following these disclosures, the price of VisionAmerica's stock dropped to its all-time low of $1-7/8 per share on volume of over 500,000 shares, reflecting a decline of approximately 75% from the stock's Class Period high, and 40% from the prior day's closing price.