According to the docket, on February 19, 2003, the Court issued the Memorandum Opinion and Order signed by U.S. District Judge David C Godbey granting the defendant’s motion to dismiss the Consolidated Amended Class Action Complaint. On May 8, 2003, the Court entered the Judgment, pursuant to FRCP 58 and the Memorandum Opinion and Order filed on February 19.
As previously disclosed by the Company’s FORM 10-Q For The Quarterly Period Ended June 30, 2002, in March and April of 2001, the Company was served with five lawsuits against it and the Company’s chairman, seeking to recover an unspecified amount of monetary damages allegedly caused by the Company's alleged fraudulent scheme to artificially inflate the price of the Company's common stock through a series of alleged false and misleading statements to the market and alleged material omissions in violation of federal and state securities laws. Four of the lawsuits are filed in the United States District Court for the Northern District of Texas and seek class action status on behalf of persons who purchased the Company's common stock on the open market during the period of December 29, 2000, through February 20, 2001. The fifth lawsuit was filed in the Dallas County Court of Law on behalf of a single stockholder that purchased the Company's common stock on the open market during the same time period. The claims against the Company in the fifth lawsuit have been dismissed without prejudice. The Company believes the lawsuits have no merit. During the pendency of the Chapter 11 case, plaintiffs have been stayed under section 362 of the Bankruptcy Code from pursuing the claims alleged in the lawsuits against the Company. The remaining defendant, the Company’s chairman, has filed a motion to dismiss but no discovery has yet occurred.
The original complaint alleges defendants made misleading statements concerning a shelf registration of 8.5 million shares of Weblink's common stock, artificially inflated the stock price. The suit alleges that Beletic knew the sale of the stock would not meet the capital needs of the company. When that information was made public during a Feb. 21 conference call, the suit claims, the result was a one-day 42-percent drop in the company's share price. At the end of last year, the company announced the shelf registration along with an amendment to its credit facility that allows the company to borrow up to $80 million, with the potential for another $20 million.
NOTE: On May 23, 2001, WebLink filed for relief under Chapter 11, Title 11 of the United States Code (the “Bankruptcy Code”). Accordingly, under the stay provisions provided by §362 of the Bankruptcy Code, WebLink is longer a party to this action.