According to the docket posted, on June 28, 2005, the Court entered the Order and Final Judgment signed by U.S. District Judge Marvin J. Garbis. The settlement was approved and the action dismissed with prejudice.
Previously, on January 26, 2001, the Court entered the Order granting the motion to consolidate the various cases. On March 28, 2001, the Court entered the Memorandum and Order appointing lead plaintiffs and lead counsel. On May 7, 2001, the plaintiffs filed a Consolidated Amended Class Action Complaint, and the defendants responded by filing motions to dismiss the Consolidated Amended Class Action Complaint. On August 2, 2002, the Court entered the Memorandum and Order granting certain defendants’ and denying certain defendants’ motions to dismiss the Plaintiffs' Consolidated Amended Class Action Complaint. On August 30, 2002, a plaintiff filed a notice of appeal in the Fourth Circuit Court of Appeals against the dismissal order. The appeal was later dismissed. The remaining defendants filed a Stipulation of Settlement. According to the Stipulation, the settlement fund was in the amount of $7.5 million. On February 1, 2005, the Court preliminarily approved the settlement.
The original Complaint alleges certain officers and directors of Creditrust Corporation ("Creditrust") with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Specifically, the Complaint alleges that the officers and directors, by causing Creditrust to issue false and misleading statements in Creditrust's press releases and public filings during the Class Period, artificially inflated the price of Creditrust common stock during the class period. The defendant officers and directors caused Creditrust to overstate its earnings by deliberately inflating the estimated amounts that could be collected on bad debt receivables purchased by the Company, thereby inflating revenue and pre-tax earnings by at least $4.9 million for the fiscal year 1999 alone. In addition, defendant Rensin sold more than 500,000 shares of his personal holdings in the company during the class period for a profit in excess of $18 million.