On September 17, 2003, the Court entered the Final Judgment of Dismissal with Prejudice. The action is dismissed with prejudice as to the defendants. The Court awarded Class Counsel, in the aggregate, 30% of the Settlement Fund in attorneys' fees and expenses as set forth in this judgment. The case was closed. On November 24, 2004, the Court entered the Settlement Distribution Order.
According to the Notice of Class Action, a settlement hearing will be held on September 12, 2003. The purpose of the Settlement Hearing will be to determine : (1) whether the Class as proposed in this, Notice should be permanently certified for settlement purposes in the Litigation ; (2) whether the proposed settlement of the claims in the Litigation for the sum of $550,000, plus interest should be approved by the court as fair, reasonable and adequate ; (3) whether the Plan of Allocation is fair, reasonable and adequate ; (4) whether the application for an award of attorneys' fees and reimbursement of costs and expenses should be approved ; and (5) whether the Litigation should be dismissed with prejudice . The Court may adjourn or continue the Settlement Hearing without further notice to the Class.
As summarized by the same Notice, by Order dated June 26, 2002, the District Court consolidated the various actions, appointed a group of shareholders known as the Karst/Price Group as Lead Plaintiff, and approved the Lead Plaintiffs' selection of Wolf Haldenstein Adler Freeman & Herz LLP as Lead Counsel. By stipulations and orders dated October 4, 2002, November 4, 2002, December 6, 2002 and January 15, 2003, the attorneys for the parties agreed to postpone the serving and filing of a consolidated amended complaint during the pendency of settlement negotiations, the latter of which provided that this would be the last request for an extension of time for the serving and filing of a consolidated amended complaint. On February 4, 2003, the parties to the Litigation reached an agreement in principle to settle the matter, and therefore a consolidated amended complaint was never filed. On May 30, 2003, the parties to the Litigation entered into a Stipulation of Settlement (the "Stipulation").
The original complaint alleges that throughout the Class Period, defendants touted the successful progression of its SYNSORB Cd(R) Phase III clinical trials while concealing from the public that, in fact, defendants had "concerns about enrollment"; that defendants knew that "the completion of the trial would reach out years beyond" what they had forecast; that the FDA had directed defendants to use a more stringent protocol in its Phase III trials; that defendants had repeatedly failed to increase enrollment in the Phase III trials during the Class Period; that defendants had been experiencing "unacceptably high drop out rates"; and that defendants could not afford to continue to finance the Phase III clinical trials. After the market close on December 10, 2001, the Company issued a press release announcing the termination of its SYNSORB Cd(R) development program; and in a conference call the next morning, revealed the true facts concerning the Phase III clinical trials. These shocking revelations made in the press release and in the conference call had a dramatic effect on the price of SYNSORB stock; causing the stock to plummet over 52% and causing plaintiff and the class to suffer damages.