On October 10, 2006, the hearing was held. The Court finds that the settlement is reasonable and adequate, and is approved. On October 12, 2006, the Court entered the Order and Final Judgment signed by U.S. District Judge Justin L. Quackenbush. That day, the Court also entered the Order for reimbursement of attorneys’ expenses.
According to a press release dated August 5, 2006, a hearing will be held on October 10, 2006, for the purpose of determining: (1) whether the proposed settlement of the Litigation for $24,200,000 in cash should be approved by the Court as fair, reasonable and adequate; (2) whether the Litigation should be dismissed on the merits and with prejudice pursuant to the terms of the Stipulation; (3) whether the proposed Plan of Allocation should be approved as fair and reasonable; (4) whether Representative Plaintiffs' Counsel's application for fees and expenses, including any award of reasonable costs and expenses (including lost wages, directly relating to the representation of the Settlement Class to any Representative Plaintiff serving on behalf of the Settlement Class) and interest thereon should be approved; and (5) whether the releases provided for in the Stipulation should be approved as fair, reasonable and adequate to the Members of the Settlement Class.
As summarized by the docket posted, on May 24, 2006, a Stipulation of Settlement was filed. Previously, on February 22, 2002, the plaintiffs filed a Correct Consolidated Class Action Complaint. The defendants responded by filing various motions to dismiss the consolidated class action complaint on May 21, 2002. On March 4, 2003, the Court entered the Order granting the defendants’ motions to dismiss, and allowed plaintiffs 30 days to amend their complaint. The claims against defendants Arthur Anderson were dismissed with prejudice. On May 5, 2003, the plaintiffs filed a First Amended Consolidated Class Action Complaint and the defendants filed motions to dismiss the complaint. Again, on April 6, 2004, the Court entered the Order granting the defendants’ motions to dismiss with leave to amend. On April 30, 2004, the plaintiffs filed a Second Amended Consolidated Class Action Complaint, and the defendants responded by filing motions to dismiss the complaint. On February 23, 2005, the Court entered the Order denying and granting certain defendants’ motions to dismiss. Judgment dismissing the case with prejudice as to certain defendants was entered that day also.
In February 2004, several complaints were filed in the U.S. District Court for the Southern District of New York, charging AOL, America Online and certain of AOL's officers with violating the federal securities laws and/or state law by vastly overstating PPRO's revenues and earnings through a series of fraudulent transactions between PPRO and AOL. Specifically, the complaint charges that each defendant violated Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and SEC Rule 10b-5. It also charges Robert Pittman (who was AOL's President and COO during the Class Period) and David Colburn (who was a senior officer of AOL during the Class Period) with violating Section 20(a) of the Exchange Act and charges America Online, Inc. and AOL Time Warner, Inc. with liability for the individual defendants' violations of the securities laws. The complaint alleges that after the truth was revealed about the fraudulent deals between PPRO and AOL, the prices of PPRO's securities collapsed and PPRO filed for bankruptcy protection. In June 2004, the actions filed in the Southern District of New York were transferred to the District of Nevada. In July 2004, the cases were consolidated with 01-CV-483.
The original complaint charges PurchasePro and certain officers/directors with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, alleging that they made numerous positive representations throughout the Class Period regarding the financial and business prospects of the Company, while knowing and withholding that the Company was improperly recognizing revenue in order to artificially inflate the trading value of PurchasePro securities for their own personal benefit.