According to the docket, on September 30, 2004, the Court entered the Order preliminarily approving the Stipulation and Agreement of Settlement. On January 28, 2005, the Court entered the Order and Final Judgment. The Court granted the motion for approval of settlement, motion for approval of plan of allocation and the motion for attorney fees and reimbursement of expenses. The settlement fund was in the amount of $5.2 million. The case is now closed.
Previously, on October 15, 2002, the Court entered the Order signed by U.S. District Judge Shelby Highsmith granting in part, denying in part UniCapital’s motion to dismiss plaintiffs' consolidated amended class action complaint. According to the Order, count II of Plaintiffs' amended complaint, which asserts claims against Defendant UniCapital pursuant to section 12(a)(2)of the Securities Act, is dismissed. The remainder of Defendant's motion to dismiss is denied. The Plaintiffs had twenty days to amend the complaint, but on September 24, 2004, a Stipulation and Agreement of Settlement was filed.
The original complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading statements regarding the Company. Specifically, as alleged in the complaint, on May 14, 1998, the Company represented in the prospectus issued in connection with the Company's Initial Public Offering (the "Prospectus") that it recognized $588.7 million in goodwill as an asset in connection with twelve corporate acquisitions. UniCapital, however, did not disclose that it overvalued the acquisitions. In addition, the prospectus failed to disclose that the company would have to comply with federal noise abatement statutes thereby requiring the phasing-out of certain types of the Company's aircraft which would, and did, negatively impact the Company's operations. When the Company announced, on May 15, 2000, that its first quarter 2000 financial results would be dramatically lower than the market had been led to believe, due to, among other things, an $8.5 million operating loss, as well as a $239.3 million write off of the impaired goodwill, the stock price of UniCapital dropped by 28%.