According to the docket, on December 22, 2005, the Court entered the Order signed by U.S. District Judge Charles L. Brieant awarding Plaintiffs' Co-Lead Counsel 30% of the Settlement Fund in attorney's fees, and $538,540.28 in reimbursement of expenses. Lead Plaintiffs were awarded $9,054.02 in reasonable costs and expenses (including lost wages) directly relating to their representation of the Class.
In a press release dated October 13, 2005, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Southern District of New York, that the case known as In re Metromedia Fiber Network, Inc. Securities Litigation, No. 01 Civ. 7353 (CLB), has been certified as a class action and that a settlement with the Defendants has been proposed. A hearing will be held before the Hon. Charles L. Brieant, United States District Judge, on December 22, 2005 at 10:00 a.m. at the United States Courthouse, 300 Quarropas Street, Courtroom 218, White Plains, New York 10601. The purpose of the hearing will be, among other things, to determine whether the proposed settlement is fair, reasonable, and adequate and should be approved, and to consider an application by Plaintiffs' Co-Lead Counsel for attorney's fees and reimbursement of expenses.
By the Settlement described in the Notice of Pendency of Class Action and Proposed Settlement, Motion for Attorneys’ Fees and Expenses and Settlement Hearing, a Settlement Fund consisting of $8,750,000 in cash, plus interest, has been established. MFN was originally named as a defendant in this action. On May 20, 2002, MFN filed for bankruptcy protection in the United States Bankruptcy Court for the Southern District of New York, and was subsequently dismissed as a defendant from the action.
On November 30, 2001, the Court consolidated the actions and appointed lead plaintiff and lead counsel. On March 1, 2002, a Consolidated Amended Class Action Complaint was filed, and on May 3, 2002, the defendants responded my filing a motion to dismiss. On November 13, 2002, the Court entered the Order signed by U.S. District Judge Charles L. Brieant denying the defendants’ motion to dismiss the complaint.
The original Complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market between January 8, 2001 and July 2, 2001, thereby artificially inflating the price of Metromedia securities. Specifically, throughout the Class Period, defendants issued multiple press releases announcing and highlighting Metromedia's receipt of a $350 million credit facility from Citicorp USA, Inc. ("Citicorp") which would enable Metromedia to complete the construction of an extensive fiber optic network. These statements were materially false and misleading because defendants failed to disclose that (1) the Citicorp credit facility was contingent on the receipt of additional commitments from other lenders and that Metromedia was experiencing difficulty obtaining such commitments given the distressed market for telecom companies; (2) the further development of the Company's fiber optic network would be significantly delayed without obtaining the credit facility which was dependent on obtaining the necessary additional loan commitments; and (3) based on the foregoing, defendants' statements about the Company and its prospects were lacking in a reasonable basis at all times. Finally, on July 2, 2001, Metromedia issued a press release announcing that it received an extension of the commitment letter for its $350 million credit facility from Citicorp and revealed for the first time that the commitment letter from Citicorp was subject to the receipt of commitments from other lenders in the amount of $287.5 million. In response to this announcement, shares of Metromedia's stock closed at $1.95 per share on July 2, 2001, a far cry from the class period high of $19.06 reached on January 19, 2001.