According to the docket posted, on March 23, 2005, the Court entered the Order granting the defendants’ motion to dismiss the consolidated second amended class action complaint. On March 24, 2005, Judgment was entered and the action was dismissed.
In May 2002, the case was stayed and terminated pending the bankruptcy of APW, Ltd. On August 27, 2002, the Court entered the Order by Magistrate Judge Patricia J. Gorence reopening the case and lifting the stay. The Court further granted the motions of Waterford Township Police & Fire Retirement System and Waterford Township Employees Retirement System for consolidation, appointment as lead counsel and approval of selection of lead and liaison counsel. On September 20, 2002, the plaintiffs filed an Amended Complaint, and the defendants responded by filing a motion to dismiss. On September 30, 2003, the Court entered the Order granting the defendants’ motion to dismiss with leave to amend the complaint. On November 18, 2003, the plaintiffs filed a Second Amended Class Action Complaint, and the defendants again responded by filing a motion to dismiss.
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 materially false and misleading statements to the market. Specifically, throughout the Class Period, defendants repeatedly issued statements indicating that, among other things, the Company was growing at a rapid pace, due, in significant part, to strong demand for its product offerings by its customers. The complaint alleges that these statements were materially false and misleading because, among other things, they failed to disclose or misrepresented that (a) in fact, the Company was experiencing decreased demand for its products as its primary customers were substantially decreasing their orders; (b) due to the declining demand, APWs customers were overstocked with APW products and, accordingly, would be decreasing their orders in the future while they worked down their bloated inventories; and (c) in response to these negative factors, APW was attempting to slash costs and, in this regard, had started to reduce its workforce. On March 20, 2001, defendants finally disclosed this information and reported that the Company's sales growth had slowed dramatically and reported a loss of$0.15 per share, compared to analysts' expectations of a $0.27 per share profit. Defendants also disclosed that the Company's reduced performance, combined with other factors, caused the Company to be in breach of certain
covenants in its credit agreement. In response to this announcement, the price of APW common stock dropped from $20.65 per share on March 20, 2001, to close at $7.39 per share on March 21, 2001. Prior to this disclosure, defendant Albrecht was able to sell shares of his personally-held stock for gross proceeds of more than$1.7 million and the Company was able to complete its acquisition of Mayville Metal Products, which was partially paid for using the Company's stock as currency.