On October 9, 2007 the judge entered a Final Order approving the settlement and dismissing the case. According to Priceline's 10-Q dated June 2007, their insurance carrier will cover the settlement up to $30,000,000 with the balance coming from Priceline's cashflows.
According to a press release dated July 19, 2007, in a class-action securities suit alleging the defendants made misleading statements about profitability, resulting in losses to investors, a court approved the parties' agreement to settle for $80 million and awarded attorneys' fees of 30 percent of the award, plus litigation expenses of $1.3 million. Plaintiffs purchased Priceline.com securities between Jan. 27, 2000 and Oct. 4, 2000. In October 2004, the District Court dismissed some of the plaintiffs' claims against Priceline.com defendants and all the allegations against Deloitte and Touche. During litigation the parties produced 5.2 million pages of documents. In 2007, the parties agreed to a cash settlement of $80 million. … The court also granted the requests of class members who decided to opt out of the settlement, on behalf of themselves or trusts, provided that they supply the dates, numbers, prices and types of purchases and sales of Priceline.com securities.
According to a press release dated May 4, 2007, Priceline.com Incorporated (Nasdaq: PCLN) announced that it had agreed to settle the securities class action litigation that was filed against the Company in 2000. Under the terms of the settlement agreement, the class will receive $80 million in return for a release, with prejudice, of all claims against the Company and the individual defendants that are related to the purchase of the Company's securities by class members during the class period. The Company's insurance carriers will fund $30 million of the settlement. The settlement is subject to approval by the Court after notice to the class. In connection with the settlement announced today, the Company expects to incur a net charge of approximately $55 million in the 1st quarter of 2007, representing the settlement amount and estimated legal expenses relating to the settlement.
According to the FORM 10-K for the fiscal year ended December 31, 2006, on October 30, 2006, the Court issued an Order setting forth a partial schedule, designating December 31, 2007 as the deadline for the completion of discovery.
As summarized by the Company’s FORM 10-Q for the quarterly period ended March 31, 2006, twenty-two cases were assigned to Judge Dominic J. Squatrito. On September 12, 2001, Judge Squatrito ordered that these cases be consolidated under the Master File No. 3:00cv1884 (DJS), and he designated lead plaintiffs and lead plaintiffs’ counsel. On October 29, 2001, plaintiffs served a Consolidated Amended Complaint. On February 5, 2002, Amerindo Investment Advisors, Inc., who was one of the lead plaintiffs in the consolidated action, made a motion for leave to withdraw as lead plaintiff. The Court granted that motion on May 30, 2002. On February 28, 2002, the Company filed a motion to dismiss the Consolidated Amended Complaint. On October 7, 2004, the Court issued a Memorandum of Decision granting, in part, and denying, in part, the Company’s motion. A scheduling order was entered by the Court on November 2, 2004 and the parties are now proceeding with discovery. On December 8, 2005, the Court issued a Memorandum of Decision and Order stating that the November 2, 2004 scheduling order would be revised, but only after the parties have provided more details about the status of discovery. Plaintiffs filed a motion for class certification on January 7, 2005 and the Company filed its opposition to that motion. On April 4, 2006, the Court issued a Memorandum of Decision granting, in part, and denying, in part, the plaintiffs’ motion. The Court certified a class and approved five of the six proposed class representatives. On May 4, 2006, the case was transferred to Judge Christopher F. Droney. [The Court gave the plaintiffs until May 5, 2006 to submit a proposed notice and proposed means for providing notice to the class.] Objections thereto or alternative proposals are due on or before May 19, 2006.
The original complaint alleges that the defendants issued materially false and misleading information regarding Priceline's financial condition and prospects. Specifically, the complaint charges that defendants misrepresented that the Company would soon be profitable, that the Company's customer loyalty was accelerating and that the Company's business model would continue to be effective.
The dissemination of this materially misleading information caused
Priceline's common stock to be artificially inflated throughout the Class
Period. Certain Company insiders took advantage of this inflated stock price
to sell $197 million of their own shares to the unsuspecting public during the
The truth about Priceline's operating condition was revealed to the investing
public before the market opened on September 27, 2000, when Priceline
disclosed, among other things, that the Company would not make money in the third quarter due to weakness in the sale of airline tickets and that revenues would be approximately $340 million to $345 million, significantly below analysts forecasts of $360 million to $380 million. These disclosures caused Priceline's stock price to decline 42% to a 52-week low of $10.75 per share.