According to the docket posted, on November 24, 2003, the Court entered the Order awarding attorneys’ fees in the amount of 25% of the settlement fund, or $2,750,000, and reimbursement of costs and expenses in the amount of $283,428.75, plus interest earned. The Court further entered the Final Judgment and Order of Dismissal with Prejudice signed by U.S. District Judge David C. Godbey.
Earlier, on December 12, 2000, the Court entered the Memorandum Opinion of U.S. District Judge Jerry Buchmeyer, appointing Saint Denis J. Villere & Co. as lead plaintiff and approving Villere’s choice of Goodkind Labaton Rudoff & Sucharow LLP as lead counsel. On April 6, 2001, the plaintiffs filed a Consolidated Amended Class Action Complaint, and the defendants responded with a joint motion to dismiss the complaint. On September 25, 2002, the Court entered the Order signed by Judge David C. Godbey denying the joint motion to dismiss. On October 1, 2003, a Stipulation of Settlement was filed, and the settlement was preliminarily approved by an Order entered on October 15, 2003. According to the Stipulation of Settlement, the Settlement Fund was in the amount of $11 million, plus interest.
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 about the Company's revenues. Specifically, the complaint alleges that defendants' false and misleading statements concerning the revenues to be derived from its dark fiber segment, artificially inflated the price of CapRock stock. CapRock's top officers knew but concealed that much of its projected in second quarter 2000 revenues was to be derived from a contract which, despite months of efforts, CapRock had been unable to have signed. The upsurge in CapRock's stock price caused by defendants' false and misleading statements allowed CapRock to sell 4.5 million shares of CapRock stock for proceeds of $83 million and enabled defendants to infuse CapRock with desperately-needed capital to fund its operations. On July 6, 2000, days after CapRock's Secondary Offering was completed, CapRock revealed that it was in fact suffering a huge drop in revenues, that its losses would be much greater than defendants had stated in the prior weeks, and exposed the problems CapRock had been experiencing during the Class Period with its dark fiber business. This announcement caused its stock price to drop to as low as $12 from its Class Period high of $36 on record volume of over 4 million shares on July 6, 2000, causing tens of millions of dollars in damages to members of the Class.