According to the docket posted, on April 17, 2002, the Court entered the Order and Final Judgment by U.S. District Judge Robert L. Vining Jr. The Settlement is approved as fair, reasonable and adequate, and the Class Members and the parties are directed to consummate the Settlement in accordance with the terms and provisions of the Stipulation and Agreement of Settlement dated December 21, 2001. The Complaint is hereby dismissed with prejudice and without costs, except as provided in the Stipulation, as against the Defendants. Plaintiffs' Counsel are hereby awarded 30% of the Settlement Amount in fees, which the Court finds to be fair and reasonable, and $24,982.42 in reimbursement of expenses, which amounts shall be paid to Plaintiff's Co-Lead Counsel from the Settlement Fund with interest. The case is terminated
By the Notice of Pendency of Class Action, a Settlement Fund consisting of $3.75 million in cash, plus interest, has been established. Notice is hereby given, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Northern District of Georgia, Atlanta Division (the "Court") dated January 15, 2002, that a hearing will be held before the Honorable Robert L. Vining, Jr. in the United States District Court Judge, Post Office Building, 600 East First Street, Rome, Georgia 30161, at 11:00 a.m., on April 15, 2002 (the "Settlement Fairness Hearing") to determine whether a proposed settlement (the "Settlement") of the above-captioned action (the "Action") as set forth in the Stipulation and Agreement of Settlement dated December 21, 2001 (the "Stipulation"), is fair, reasonable and adequate and to consider the proposed Plan of Allocation for the Settlement proceeds and the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses.
The Court, by Preliminary Order In Connection With Settlement Proceedings, dated January 15, 2002, has conditionally certified a Plaintiff Class consisting of all persons who purchased the common stock of USFS during the period between May 6, 1999 and October 29, 1999, inclusive.
The complaint charges that the Company and certain of its officers and directors violated the federal securities laws by providing materially false and misleading information about the Company's financial condition during the Class Period. Among other things, the Complaint alleges that the Company misled the investing public into believing that USFS was undergoing phenomenal growth by reporting "record franchise sales" and "record revenue." In reality, the Complaint alleges that the Company was facing debilitating problems in almost every area of its operations, including weak earnings, reduced management fees, reductions in new hotel openings, problems with loans, and increasing competition. When the truth about the Company's financial disarray was revealed, analysts and the investing public were shocked, and the price of the stock dropped significantly.