By the Order and Final Judgment signed by U.S. District Judge Milton I. Shadur and entered on July 18, 2005, the Stipulation and the Settlement are approved and the Action is dismissed in its entirety with prejudice and without costs to any party as against any other party. Lead Counsel was awarded the sum of $2,475,000 in attorneys’ fees and $226,049.64 as reimbursement of expenses.
In a press release dated May 25, 2005, the Settlement calls for the creation of a cash Settlement Fund in the amount of $13,750,000 to be distributed to the members of a Settlement Class, in exchange for a release of all claims against the Defendants and other Released Parties and dismissal of this action with prejudice. The complete terms of the Settlement are set forth in the Stipulation, which is available for inspection at the office of the Clerk of the Court, United States District Court for the Northern District of Illinois. The Final Settlement Hearing will be held on July 14, 2005.
According to the docket posted, on June 27, 2001, the Court entered the Minute Order by U.S. District Judge Milton I. Shadur designating Peter Moser as the most adequate plaintiff to represent the previously defined class in this action and approving the law firm of Wolf Haldenstein Adler Freeman & Herz LLC, as class counsel. Further, Case No. 01 C 874 was dismissed without prejudice. On August 14, 2001, Comdisco filed a notice of bankruptcy. On November 15, 2002, an Amended Class Action Complaint was filed and the defendants responded with a motion to dismiss the amended complaint. On March 31, 2003, the Court entered the Minute Order denying the defendants’ motion to dismiss the amended complaint.
By the Memorandum and Order dated March 26, 2001, the Court granted the Plaintiff’s motion for a finding of relatedness. The twelve purported class actions filed against Comdisco were all found to be related to case 01-CV-874 and, for convenience, a separate case number, 01-CV-2110, and the general caption "In re Comdisco Securities Litigation" were employed in all future orders and opinions.
The original complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5, by issuing a series of material misrepresentations to the market concerning the company's operations and its Prism Communications Services subsidiary. Specifically, the complaint alleges that defendants repeatedly issued positive statements concerning Prism, Prism's expansion into new markets and purported positive developments in Prism's existing markets but failed to disclose that Prism was suffering from a host of adverse factors including that incumbent local exchange carriers were slow to provide Prism access to their networks and Prism was experiencing intense competition from entrenched telecommunications companies. On 10/03/2000, Comdisco announced that it would stop funding Prism and would write down its investment in Prism, which amounted to $350 million. In response, Comdisco's stock price dropped 23% in one day from $17.5625 per share to $13.37 per share (representing a 66% drop from the class period high of $53 per share).
NOTE: Although Comdisco was originally named as a defendant in this action, during the pendency of this case, Comdisco filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. By virtue of its bankruptcy filing and by agreement, Comdisco is not named as a defendant herein and plaintiffs are pursuing their herein-described claims only against Individual Defendants.
