According to the docket, on October 6, 2004, the Court entered the Orders by U.S. District Judge George H. King approving the Plan of Allocation of settlement proceeds and awarding Co-Lead Counsel attorneys fees of twenty-five percent of the Settlement Fund and expenses in an aggregate amount of $197,671.34 together with the interest earned. The Court further entered that day the Final Judgment dismissing the action with prejudice. By the Notice of Pendency and Proposed Settlement of Class Action, the proposed settlement created a fund in the amount of $4,175,000 in cash.
Earlier, according to the same docket, in September and October 2002, the defendants filed several motions to dismiss the first amended consolidated class action complaint. On March 19, 2003, Judge King denied the defendants’ motion to dismiss in its entirety, granted the motion to dismiss the section 11 claim, denied the motion to dismiss the section 12 claim, denied the motion to dismiss the 10(b) claim, and denied an individual defendant’s motion to dismiss the sections 15 and 20 claims against him. The court did grant another individual’s motion to dismiss the sections 15 & 20 claims against her. On September 22, 2003, the Court entered a Stipulation and Order granting the motion to certify the class action, and on May 17, 2004, a Stipulation of Settlement was filed.
As reported by the Company’s Form 10-Q for the quarterly period ended September 30, 2002, beginning in February, 2002, a total of thirteen related lawsuits were filed in California state and federal courts against the Company, its directors, and certain of its officers. Three lawsuits were brought as purported federal securities class actions in U.S. District Court for the Central District of California, and have since been consolidated into a single action. The First Amended Consolidated Complaint alleges violations of the federal securities laws against the Company, AGC, and certain individuals in connection with the Company’s publicly disclosed financial condition and accounting during a class period of May 11, 1999 through April 1, 2002, including the time of the May, 2001 secondary public offering of the Company’s common stock. The plaintiffs seek damages, as well as court costs and attorney’s fees. Five lawsuits contain allegations similar to those in the Federal Class Actions, but were brought as derivative actions, purportedly on behalf of the Company. These lawsuits were filed in both Los Angeles County Superior Court and U.S. District Court for the Central District of California. The remaining five lawsuits allege violations of fiduciary duties against the Company’s directors in connection with the Company’s proposed business combination with AGC. These cases were brought both as derivative and class actions, and have been consolidated in Los Angeles Superior Court under the caption In re National Golf Properties, Inc. Shareholder Litigation.
The original complaint charges National Golf and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. Specifically, the complaint alleges that David G. Price (``Price'') misappropriated funds from a publicly traded company and funneled them to himself via a scheme of complicated financial dealings involving National Golf and a variety of Price-controlled entities. Price-controlled entities conduct substantial business with National Golf, to the detriment of National Golf's shareholders. Price's plan culminated in a May 2001 secondary offering that generated over $31 million from plaintiff and other Class members which went to a Price-controlled entity, Oaks Christian High School. Defendants allegedly violated the Securities Act of 1933 by issuing a false and misleading Registration Statement and Prospectus, which became effective May 17, 2001, and included materially false and misleading financial statements, and other false and misleading statements, pursuant to which 1.175 million shares of National Golf common stock were sold to plaintiff and other members of the Class. Defendants allegedly violated the Securities Exchange Act of 1934 by making a series of materially false and misleading statements concerning the business and financial operations of National Golf with the intent and having the effect of substantially inflating the trading price of National Golf common stock.