On August 23, 2004, the Court entered the Final Judgment and Order. The settlement was approved and the case dismissed with prejudice. The Plaintiffs' Counsel was awarded attorneys' fees in the amount of 25% of the settlement fund, and reimbursement of expenses in the amount of $149,538 .5, plus interest.
By the Notice Of Pendency Of Class Action, a settlement hearing will be held on August 13, 2004 at 1:00 p.m., before the Honorable Norman K. Moon, United States District Judge, at the United States Courthouse, Western District of Virginia, 255 West Main Street, Courtroom 300, Charlottesville, Virginia 22902 (the “Settlement Hearing”). The purpose of the Settlement Hearing will be to determine: (1) whether to finally certify the Class; (2) whether the settlement consisting of $4.6 million in cash should be approved as fair, reasonable and adequate; (3) whether the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is fair, reasonable, and adequate; (4) whether the application by Plaintiffs’ Counsel for an award of attorneys’ fees and expenses should be approved; (5) whether the Litigation should be dismissed with prejudice; and (6) to consider and rule upon such other matters as the Court may deem appropriate.
Earlier, according to the Notice, four actions were consolidated for all purposes by an Order dated May 10, 2000. Value America, which had been named as a defendant in all of the complaints in the Litigation at the time of consolidation, filed a voluntary bankruptcy petition under Chapter 11 of the Bankruptcy Code on August 11, 2000. On October 20, 2000, Plaintiffs voluntarily dismissed Value America as a defendant in the Litigation. The dismissal was approved by the Court on November 14, 2000. Plaintiffs filed their First Amended Class Action Complaint against Defendants on August 31, 2000 alleging that the registration statement and prospectus filed in connection with the April 7, 1999 initial public offering of Value America common stock failed to disclose material financial, business, and technological deficiencies from which Value America suffered. Defendants filed a motion to dismiss the First Amended Class Action Complaint, which the Court granted in part and denied in part by a Memorandum Opinion and Order dated July 19, 2001. On August 8, 2001, Plaintiffs filed a Second Amended Class Action Complaint (the “Complaint”), which is the operative complaint in the Litigation. Defendants filed a motion to dismiss the Complaint, which the Court denied by an Order dated October 11, 2002, and a Memorandum Opinion, dated April 3, 2003.
The original complaint alleges Defendants' public misrepresentations and omissions of material adverse information regarding, inter alia, Value America's financial condition were known to them, or were recklessly disregarded by them and caused the market price of Value America securities to be artificially inflated during the class period. During the class period, plaintiff and each member of the class purchased Value America securities in the IPO and/or open market without knowledge of the false and misleading statements and omissions of the defendants and without knowledge that the price of those securities was artificially inflated.