On July 20, 2006, the plaintiffs filed a Stipulation and Agreement of Settlement. The proposed settlement fund is in the amount of $18,000,000. On July 31, 2006, the Court entered the Order preliminarily approving the class action settlement. On January 22, 2007, the Court entered Order awarding attorney fees and reimbursement of expenses. Further that day, the Court entered the Order and Final Judgment approving the settlement.
As summarized by the co-lead counsel’s website, the court appointed BLB&G clients Alabama Retirement Systems and Policemen's Annuity and Benefit Fund, City of Chicago as Co-Lead Plaintiffs and BLB&G was appointed Co-Lead Counsel for the Class. In August 2004, the court denied in part and granted in part the defendants' motion to dismiss. The firm has pursued discovery of the defendants and of third parties. On July 18, 2005, the court granted the Lead Plaintiffs permission to file a Second Amended Complaint. The Second Amended Complaint identified numerous high level former ICG employees who specifically linked Defendants, ICG’s CEO and former ICG President and COO, to fraudulent line count inflation and hiding the truth about ICG's network problems. On February 7, 2006, Defendants' motion to dismiss that complaint was denied as to all claims against ICG’s former ICG President and COO and as to all claims against ICG’s CEO except the Section 10(b) claim for line count inflation. The firm is pursuing further discovery on the upheld claims.
The original complaint maintains that ICG executives misled investors during the Class Period, touting the company while failing to disclose severe customer-service issues that included network outages, equipment failures and overall technical problems. In fact, some of ICG Communications’ major customers notified the company during the Class Period that they planned to reduce their service commitments; others said they intended to terminate their contracts unless the technical issues were resolved. Despite these persistent issues, ICG made several statements publicizing significant growth in both revenue and network capacity. When the truth about the customer service issues emerged, ICG Communications’ stock plummeted to $1.65 a share on September 18, 2000 from a Class Period high of $39 on March 27, 2000.
NOTE: On November 14, 2000, ICG and certain of its direct and indirect subsidiaries filed voluntary petitions for reorganization under Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the District of Delaware. ICG’s Modified Plan of Reorganization was approved by the Bankruptcy Court on October 10, 2002, and its liabilities related to claims were discharged in accordance with the Bankruptcy Code. ICG would be named as a defendant but for the discharge included in the Modified Plan of Reorganization.