Case Page

 

Case Status:    SETTLED
On or around 07/16/2001 (Date of order of final judgment)

Filing Date: September 19, 2000

According to the Company’s FORM 10-Q for the quarterly period ended June 30, 2001, MP3.com and the representatives of the various plaintiffs for both the class action lawsuits and derivative lawsuit executed Stipulations of Settlement dated as of March 20, 2001 (the “Stipulations”). Under the terms of the Stipulations, the defendants, while continuing to deny all liability, have paid into an escrow account $35,000,000 and agreed to issue 2.5 million shares of MP3.com common stock which MP3.com valued at $5,391,000, in exchange for complete dismissals and releases of all claims with prejudice. In addition, under the Stipulations, MP3.com agreed to institute certain corporate governance enhancements. On June 29, 2001, the State Superior Court issued final approval of the settlement of the derivative cases. The Federal District Court entered final approval of the settlement of the class action on July 16, 2001. As part of the settlement agreement, counsel for the plaintiffs are to receive 27.5% of the total settlement fund. Plaintiffs’ counsel’s portion of the 2.5 million shares was issued to plaintiffs’ counsel on July 31, 2001.

MP3.com and certain of its employees, officers, and directors have been named as defendants in several lawsuits alleging violations of the federal securities laws. The complaints, which were filed between September 19, 2000 and November 15, 2000 in the United States District Court for the Southern District of California, each purport to be brought on behalf of a class of stockholders. The complaints allege that MP3.com and the other defendants violated the federal securities laws by issuing materially false and misleading statements and failing to disclose material information regarding its My.MP3 service and the litigation surrounding the service. Between September 14, 2000 and October 26, 2000, certain stockholders of MP3.com filed shareholder derivative suits against MP3.com and certain of its employees, officers, and directors in the Superior Court of the State of California, County of San Diego. These complaints allege various statutory and common law claims relating to the My.MP3 service, including breach of fiduciary duty, abuse of control, constructive fraud, gross mismanagement, unjust enrichment, and waste of corporate assets.

The original complaint charges MP3.com and certain of its officers and directors with violations of the Securities Exchange Act of 1934. The complaint alleges that defendants' false and misleading statements about strong sales and the growth of MP3.com's existing Internet services, which generated more than 90% of MP3.com's revenue, and the strong continuing growth of its products for the next several quarters, which would result in 350% revenue growth for MP3.com for the 1stQ, 2ndQ, 3rdQ and 4thQ fiscal 2000 over fiscal 1999, artificially inflated MP3.com's stock to a Class Period high of $36-1/2. On 9/7/00, it was revealed that, due to MP3.com's willful illegal acts, including violations of United States copyright laws, its financial results were going to be much worse than earlier forecast and that MP3.com would be the subject of a potentially lethal damage award. Upon this revelation, trading in MP3.com's stock was halted, last trading at $5-21/32, a decline of over 85% from the Class Period high.

COMPANY INFORMATION:

Sector: Consumer Cyclical
Industry: Recreational Products
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MPPP
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. California
DOCKET #: 00-CV-1873
JUDGE: Hon. Judith N. Keep
DATE FILED: 09/19/2000
CLASS PERIOD START: 01/13/2000
CLASS PERIOD END: 09/07/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cauley, Geller, Bowman, Coates & Rudman LLP (San Diego, CA)
    225 Broadway, Suite 1900, Cauley, Geller, Bowman, Coates & Rudman LLP (San Diego, CA), CA 92010
    619.702.7350 619.702.7351 ·
  2. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  3. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  4. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date
COURT: S.D. California
DOCKET #: 00-CV-1873
JUDGE: Hon. Judith N. Keep
DATE FILED: 03/19/2001
CLASS PERIOD START: 01/13/2000
CLASS PERIOD END: 09/07/2000
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Jeffrey & Dreher (former)
    225 Broadway, 19th Fl., Jeffrey & Dreher (former), CA 92101
    619.230.8828 ·
  2. Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA)
    600 West Broadway, 1800 One America Plaza, Milberg Weiss Bershad Hynes & Lerach LLP (San Diego, CA), CA 92101
    800.449.4900 · support@milberg.com
  3. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
No Document Title Filing Date