According to the docket, on June 23, 2005, the Court entered the Mandate of the 9th Circuit Court of Appeals, dismissing the appeal.
As reported by Emulex Corporation's Form 10-Q for the quarterly period ended December 26, 2004, the settlement was approved and $39.5 million held in escrow was paid by the Company into the settlement fund during the six months ended December 28, 2003. Gateway Partners filed a challenge to the allocation of settlement funds among the plaintiffs and adequacy of the settlement notice, and the district court ruled against such challenge on November 23, 2004. On December 13, 2004, Gateway Partners filed an appeal and a motion to stop distribution from the settlement fund; both of which were filed with the United States Court of Appeals for the Ninth Circuit (Index No. 04-57123). On January 12, 2005, attorneys for Gateway Partners sent a letter to the appeals court stating that a stipulation would be filed confirming that no proceeds of the settlement fund would be distributed until the appeal is resolved, and that Gateway Partners would not have to post a bond.
In a Press Release dated 04/24/2003, Emulex Corp. announced that it reached tentative settlements to conclude securities class action and derivative lawsuits brought against the company and certain directors and officers in 2001. Under the settlements, all claims will be dismissed and the litigation will be terminated in exchange for a payment of $39.5 million. Additionally, the company will record a receivable from the company's D&O insurance of approximately 32% of the settlement. The resulting after-tax settlement charges of approximately $16.7 million will be recorded as a charge in the third fiscal quarter.
On August 24, 2001, an Amended and Consolidated Complaint was filed pursuant to a Stipulation and Court Order. Defendants' motion to dismiss was denied by way of an order dated March 7, 2002. Defendants' motion for reconsideration of that order was denied by an order dated May 3, 2002. Plaintiffs have commenced discovery. The court certified the class action by an order dated September 30, 2002, and the court scheduled a trial setting conference on June 6, 2003, that was expected to be set for trial in July, 2003.
The complaint charges Emulex and certain of its officers and directors
with violations of the Securities Exchange Act of 1934. Emulex is a designer,
developer and supplier of a line of Fibre Channel host adapters, hubs, ASICs
and software products that provide connectivity solutions for Fibre Channel
storage area networks, network attached storage and RAID. The complaint
alleges that during the Class Period, defendants made positive but false
statements about Emulex's results and business, while concealing material
adverse information about customers pushing out orders. As a result, Emulex's
stock traded at artificially inflated levels, permitting defendants to sell
$40.36 million worth of their Emulex stock. On February 9, 2001, Emulex
issued a press release directing people to visit the Company Website.
Visitors were able to listen to a recording of Emulex's CEO describing what
Emulex would later disclose at a conference on February 13, 2001: that it had
been experiencing a push-out of orders since late January that might cause
Emulex sales to fall short of previous Company guidance for Emulex's 3rdQ F01
to end on April 1, 2001. On Monday morning when the market opened again,
Emulex's stock immediately dropped, falling 48% to $38-1/8 before closing at
$40-3/8 on February 12, 2001 on volume of 48.6 million shares.