On May 14, 2002, the Court entered the Order, Judgment, and Amended Judgment dismissing the action with prejudice as the matter has been fully adjudicated on the merits in the Court. The case is closed.
As disclosed by the Company’s FORM 10-K for the fiscal year ended December 31, 2001, in July 2001, the Company filed a motion to dismiss the lawsuit. On February 19, 2002, the court granted the Company’s motion to dismiss, but allowed the plaintiffs to file a motion seeking leave to amend their complaint. On March 22, 2002, the plaintiffs filed a motion requesting additional time to amend their complaint. That motion is pending.
The original complaint charges CompuCredit and its chief executive officer, with making false and misleading public statements about the company that artificially inflated its stock. In particular, the complaint accuses CompuCredit of concealing information about a substantial rise in bad loans during the third quarter of 2000, which ended Sept. 30. After the stock market closed Oct. 24, the company surprised analysts by disclosing that its financial report would include a net charge-off rate for bad loans of 11% as compared to 9.2% for the previous quarter. As a result, CCRT common stock fell 43% the next day, from about $51 on Oct. 24, 2000 to $29 at the close of trading Oct. 25.