According to the docket, on June 4, 2003, the Court entered the Judgment/Mandate from the Fifth Circuit Court of Appeals affirming in part and reversing in part the judgment of the District Court. The case was remanded to the District Court for further proceedings and the case reopened. On December 9, 2004, a Stipulation of Settlement was filed and later preliminarily approved. On March 9, 2005, the Court entered the Orders signed by U.S. District Judge Terry R. Means approving the Plan of Allocation of settlement proceeds and awarding attorneys’ fees and reimbursement of expenses. The next day, the Court entered the Final Judgment and Order of Dismissal. The settlement of $4,800,000 was approved and the case closed.
As reported by the Company’s FORM 10-Q for the quarterly period ended June 30, 2002, three similar class action lawsuits were filed and have been consolidated, lead plaintiffs and counsel have been appointed, and the consolidation action has been transferred to the Fort Worth Division. The Company, together with the other defendants, filed a motion to dismiss. In March 2001, the Court granted the Company's motion to dismiss. As a result, an order was entered dismissing the case without prejudice and giving the plaintiffs leave to amend their lawsuit. In June 2001, this suit was refiled. This matter was dismissed with prejudice and without the right to re-plead in April 2002. The Plaintiffs have appealed the matter to the United States Court of Appeals for the Fifth Circuit.
The original complaint charges INSpire and certain of its officers and directors and its parent company with violations of the Securities Exchange Act of 1934. The complaint alleges that INSpire made false and misleading statements, issued false financial results and continually announced new contracts, representing that the new contracts would provide significant “recurring” revenue when, in fact, the contracts were generally contingent on the profitability of its customers. As a result, INSpire’s stock traded at inflated levels during the Class Period.