By the Order For Final Judgment entered on June 19, 2003, the Settlement set forth in the Settlement Agreement is fair, reasonable, and adequate. Judgment is entered dismissing the action with prejudice, on the merits. The plan of allocation and attorneys’ fees and reimbursement of expenses is also approved by the Court.
Earlier, on May 4, 2001, the Court entered the Order appointing lead plaintiffs, approving their selection of lead counsel, and establishing a plaintiffs’ executive committee. On May 21, 2001, an Amended Consolidated Class Action Complaint was filed, and on July 26, 2001, a Second Amended Consolidated Class Action Complaint was filed. The defendants responded by filing motions to dismiss the Second Amended Consolidated Class Action Complaint. On May 23, 2002, the Court entered the Order denying the motions to dismiss. On September 6, 2002, the defendants filed motions for partial summary judgment. On December 26, 2002, the Court entered the Order finding the motions for summary judgment moot. Soon after, on April 16, 2003, a Settlement Agreement was filed, and that same day, the judge preliminarily approved the settlement. The settlement fund is in the amount of $20 million.
The original complaint alleges that during the proposed class period, the Company misled investors by stating that it would not likely experience any adverse impact in connection with Unicover. Ultimately, the company revealed that it would be negatively impacted by the Unicover reinsurance scandal and that its earnings per share in the first quarter of 2000 would fall well below projected earnings. The complaint further alleges that during the class period, E. W. Blanch recognized revenue from its Unicover related brokerage business based on one or more reinsurance contracts that were not in force. The market price of the Company's shares plummeted over 60% throughout the day on March 20, 2000, causing significant losses to persons who purchased shares during the class period. The individual defendants sold over $24.7 million in the Company's stock during the proposed class period.