On February 22, 2006, the Court entered the Judgment approving the settlement with the remaining defendant, BDO Seidman, LLP. On March 7, 2007, the Court entered the Order granting motion authorizing the distribution of global net settlement fund.
By the Notice of Proposed Final Settlement of Action, a settlement with the last remaining defendant in the action, BDO Seidman, LLP, has been established. A hearing will be held on February 14, 2006 at 9:00 a.m., for the purpose of determining : (a) whether the proposed Settlement of the claims in the Action against Settling Defendant pursuant to a Stipulation and Agreement of Settlement dated as of October 31, 2005 for $3.25 million in cash should be approved by the Court as fair, reasonable and adequate; (b) whether the claims asserted against the Settling Defendant should be dismissed with prejudice as set forth in the Stipulation; (c) whether the proposed Plan of Allocation of the net proceeds of the settlements in this action set forth below should be approved as fair and reasonable, and (d) whether the application by Lead Counsel for an award of attorneys' fees and reimbursement of costs and expenses incurred should be approved.
A second partial settlement of the action for $6.75 million cash was achieved with defendants BDO International B.V.and BDO International Accountants & Consultants. The Notice Of Proposed Partial Settlement Of Action and Attorneys’ Fee Petition dated August 23, 2004, describes the proposed partial settlement. The case is continuing against defendant BDO Seidman, LLP. The partial settlement was approved by the Judgment entered on October 21, 2004.
The Lead Plaintiff entered into a partial settlement of the action with the ACLN defendants, consisting of ACLN and the individual defendants. The settlement was approved by the Court on May 14, 2004. The Notice of Pendency of Class Action, Hearing on Proposed Partial Settlement and Attorneys' Fee Petition and Right to Share in Settlement Fund dated February 18, 2004, describes the history of the action and the terms of the $5.5 million settlement with the ACLN Defendants.
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. Beginning on June 29, 2000, and continuing throughout the Class Period, defendants issued multiple press releases and filed quarterly and annual reports with the SEC which highlighted the Company's growth and strong financial performance. As alleged in the Complaint, these statements were materially false and misleading because they failed to describe the true state of financial affairs at the Company. Specifically, defendants (a) failed to disclose certain self-dealing transactions between defendant Bisschops and certain private entities which he controlled; (b) overstated the Company's assets by listing a shipping vessel, the Sea Atef, as an asset of the Company when, in fact, the Company did not own the Sea Atef; (c) understated the Company's selling, general and administrative expenses, causing the Company's net income to be overstated; and (d) violated Generally Accepted Accounting Principles ("GAAP") and the Company's own stated policy with regard to recognition of revenue by reporting revenue for the cars that it sold as soon as the ship carrying the cars left the port and not when the shipment was completed. The truth about these statements finally came to light on December 20, 2001, in an article published by Herb Greenberg on The Street.com. In response to the questions raised in Greenberg's article, shares of ACLN plunged 64%, falling $16.71 to close at $9.40 per share.