On November 09, 2005, a motion for an Order on the disbursement of net settlement was filed. Soon after, an Order authorizing the disbursement of net settlement was entered on December 14, 2005.
As reported by the Company’s FORM 10-Q For The Quarterly Period Ended March 31, 2005, under the settlement, the Company paid $3,500,000 (all of which was covered by insurance) to settle all claims against it. A motion for reconsideration of the fee award filed by those plaintiffs' law firms whose fees were not included in the settlement was rejected by the court in February 2005.
According to the docket posted, on April 24, 2002, the Court entered the Order by U.S. District Judge Thomas P. Griesa granting the Order for consolidation of cases, and granting the motions for appointment of lead plaintiff and lead counsel. On June 28, 2002, a Consolidated Amended Class Action Complaint was filed, and on September 13, 2002, the defendants filed a motion to dismiss the amended complaint. On October 1, 2003, the Court entered the Order approving the withdrawal of defendants’ motion to dismiss. On May 4, 2004, the Court entered the preliminary order in connection with the settlement proceedings, and Judge Griesa certified the action as a class action.
The original complaint charges that defendants Globix and certain of its officers violated federal and state securities laws by, among other things, issuing false misleading statements regarding Globix's financial condition as well as its present and future business prospects. As alleged in the complaint, on November 16, 2000, in an effort to stabilize the price of Globix stock and to assuage investor concerns over Globix continuing as going concern, defendants set-forth the Company's business plan which stated in no uncertain terms that Globix would be fully funded to fiscal 2003 and thereafter cash flow positive. This sentiment was repeated in Globix's annual report filed on Form 10-K with the Securities Exchange Commission and numerous times thereafter in Company press releases and conference calls.