On July 22, 2005, a plaintiffs’ notice of motion and motion for approval of settlements and fees was entered. Just as quickly, an Order and final judgment settling the action was entered on July 29, 2005. In addition, an Order in reply of attorney’s fees was entered on August 03, 2005. Lastly, a motion for an order approving the administrative determinations of CGG accepting and rejecting claims was entered on May 08, 2007. Finally, an Order in regards to the distribution of class settlement fund was entered on May 30, 2007.
According to the docket posted, on March 18, 2005, Judge Richard Owen signed an Order preliminarily approving the proposed settlement. A Settlement Hearing to determine, among other things, whether the proposed settlement is fair, reasonable and adequate was held on July 29, 2005 and Order and Final Judgment approving the Settlement was signed that same day.
In a press release dated January 24, 2005, ImClone Systems Inc. agreed to pay $75 million to settle a 2002 class-action shareholder lawsuit accusing the company of making false or misleading statements about prospects for its Erbitux colon-cancer drug. ImClone will take a $55.4 million charge against its fourth-quarter earnings to cover the portion of the payment not covered by insurance. ImClone said all claims against the company and other named defendants in the class action will be dismissed with prejudice with no admission or finding of wrongdoing on the part of any defendant.
Plaintiffs filed a Corrected Consolidated Amended Class Action Complaint (the “Consolidated Complaint”) on October 22, 2002, which Defendants opposed on November 25, 2002. Thereafter, on March 31, 2003, the Court consolidated all related cases and appointed Lead Plaintiffs and approved their selection of Lead Counsel. On June 4, 2003, the court issued an order granted in part and denied in part Defendants’ motions to dismiss. Defendants filed their Answers to the Consolidated Complaint on June 27, 2003. Plaintiffs filed a motion for class certification on December 22, 2003 and on April 15, 2004, the Court entered an Order certifying the action to proceed as a class action and defined the Class to consist of all persons or entities who purchased ImClone securities during the period between March 27, 2001 and January 25, 2002.
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. Throughout the Class Period, defendants issued multiple press releases highlighting the successful progress of its "Fast-Track" application to the U.S. Food and Drug Administration ("FDA") for approval of IMC-C225, its blockbuster drug used for the treatment of colorectal cancer and also known as Erbitux, and the positive impact that the drug's approval would have on the Company's revenues. As alleged in the Complaint, these statements were materially false and misleading because, among other things, (i) defendants failed to comply with the FDA's requirements for filing the "Fast Track" application for approval of Erbitux; and (ii) as such, defendants knew, or should have known, that their deficient application would be rejected and would thus negatively impact the Company's future earnings. The Complaint further alleges that defendants filed their application, despite lacking the skill and expertise to make a proper filing, in order to convince Bristol-Myers Squibb Co. ("Bristol-Myers") to purchase at least $1 billion in ImClone stock, of which approximately $150 million was tendered by ImClone insiders, including the individual defendants, and to convince Bristol-Myers to make an additional $1 billion cash investment in the Company. On Friday evening, December 28, 2001, ImClone disclosed that the FDA had refused to accept the Company's deficient and defective application for approval of Erbitux, confirming almost two weeks of speculation that had already driven down the price of ImClone's stock by 21%, from a Class Period high of $73.83 per share on December 5, 2001 to $55.25 per share at the close of regular trading on December 28, 2001. Immediately following this shocking revelation, however, shares of ImClone dropped precipitously, falling $5.25 per share in after hours trading, or 9.5%, to close that session at $50 per share. On December 31, 2001, shares of ImClone continued to trade lower, and closed at $46.46 per share.