On October 20, 2006, the Court entered the Final Approval Order and Judgment signed by U.S. District Judge Miriam Goldman Cedarbaum. The settlement and the plan of allocation were approved. On January 31, 2007, the Court entered the Order awarding attorney’s fees in the amount of $22,500,000 and $2,360,113.60 as reimbursement for expenses, the total amount to be paid from the settlement fund.
According to the Notice of Proposed Settlement of Class Action dated June 26, 2006, a settlement hearing will be held on October 19, 2006 (the “Settlement Hearing”). The purpose of the Settlement Hearing will be: (1) to determine whether the Settlement consisting of One Hundred and Fifty Million Dollars ($150,000,000) in cash, plus accrued interest, should be approved as fair, just, reasonable, and adequate to Plaintiff and the Class (defined below); (2) to determine whether a final judgment (“Final Judgment” or “Judgment”), dismissing with prejudice the Action and releasing the Released Parties from all Released Claims against them, should be entered pursuant to the Settlement and the Stipulation; (3) to consider whether the proposed plan to distribute the settlement proceeds (the “Plan of Allocation”) is fair, reasonable, and adequate and should be approved; and (4) to consider whether the application by Plaintiff’s Lead Counsel for an award of attorneys’ fees and reimbursement of expenses and the Lead Plaintiff’s request for reimbursement of its expenses (including lost wages) should be approved.
As summarized by the same Notice, between November 2000 and January 2001, purchasers of AT&T Wireless Group tracking stock shares filed a number of class action lawsuits alleging violations of the federal securities laws against AT&T Corp. and the Defendants. The cases were transferred and consolidated for pretrial proceedings before the Honorable Garrett E. Brown, Jr., in the United States District Court, District of New Jersey, under the heading In re AT&T Corporation Securities Litigation (01 cv 1883). By an order dated December 19, 2001, the Court consolidated these actions for all purposes (collectively the “Action”); appointed the Soft Drink & Brewery Workers Union, Local 812 Retirement Fund as Lead Plaintiff pursuant to the requirements of the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 77z-1; and approved the Lead Plaintiff’s selection of Kirby McInerney & Squire, LLP as Plaintiff’s Lead Counsel. On February 15, 2002, Lead Plaintiff filed an amended and consolidated class action complaint (the “Complaint”). The Complaint alleged violations of §§ 11, 12 and 15 of the Securities Act of 1933, and §§ 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, arising from alleged misrepresentations and omissions from the April 26, 2000 Initial Public Offering (“IPO”) Prospectus for the AT&T Wireless tracking stock. Defendants filed a motion to dismiss the Complaint on March 25, 2002. On September 17, 2002, the Court granted in part and denied in part Defendants’ motion to dismiss the Complaint. Thereafter, Defendants filed an answer denying all material allegations of the Complaint and asserting defenses. Lead Plaintiff’s attorneys reviewed millions of pages of documents, took or defended more than 80 depositions, and made and opposed many motions. Plaintiff and Defendants both filed motions for summary judgment on March 2, 2004. On September 2, 2004, following full briefing, Judge Brown denied both motions. Thereafter, the case was transferred to Judge Miriam Cedarbaum of the United States District Court for the Southern District of New York for trial. Trial was set to commence on April 19, 2006. At the time the Action was settled, many pretrial motions were pending. In January 2006 and through March 9, 2006, the parties conferred with Magistrate Judge (ret.) Edward A. Infante, an experienced mediator, about the possibility of settlement. Finally, on March 9, 2006, all parties accepted the mediator’s proposal to settle the case for $150,000,000. Judge Infante expressed his belief that the proposed settlement is reasonable and fair to the Settling Parties.
The original complaint charges AT&T Corporation ("AT&T") and the underwriters of the AT&T Wireless Group Tracking Stock ("AT&T Wireless") with violations of Section 11 of the Securities Act of 1933. Specifically, the complaint alleges that on April 26, 2000, AT&T and the other defendants issued a Registration Statement and Prospectus for the Tracking Stock which failed to disclose ongoing business problems at AT&T Wireless which were causing large corporate customers to be neglected and poorly served and resulting in a material downturn in revenue and future business prospects. Plaintiff and other similarly situated public investors purchased AT&T Wireless Group Tracking Stock without knowledge of these facts and have, as a result, sustained damages.