On May 20, 2003, the Court entered the Order signed by U.S. District Judge Naomi R. Buchwald preliminarily approving the settlement. On July 31, 2003, the Court entered Judgment. The settlement was approved and the Court awarded attorney’s fees in the amount of 33 1/3% of the settlement fund and expenses in the amount of $28,994.47. Plaintiff Donald Newman was awarded expenses in the amount of $2,500. Finally, on July 12, 2004, the Court entered the Order for distribution of the net settlement fund. The case is closed.
According to the Notice of Proposed Settlement dated May 19, 2003, a hearing to consider whether the proposed Settlement of $620,000 plus interest and the procedural safeguards is fair, reasonable and adequate, meets the requirements of due process, as well as Plaintiffs’ Counsels’ fee and expense application and the application for an award to Lead Plaintiff for his service to the Class, and should be approved and will be held by the Court in Courtroom 21A of the United States District Court for the Southern District of New York, 500 Pearl Street, New York, New York on July 17, 2003, at 9:30 a.m.
As summarized by the same Notice, by an Order dated July 25, 2002, the Court appointed as Lead Plaintiff Donald Newman and Schoengold & Sporn, P.C. as Lead Counsel. On or about August 12, 2002, an Amended Class Action Complaint was filed in this class action on behalf of purchasers of Nyack Hospital Revenue Bonds during the period from May 1, 1999 through February 11, 2002, inclusive (the “Consolidated Complaint”) alleging violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The defendants named in the Consolidated Complaint included Nyack Hospital, certain individuals and KPMG, L.L.P. The Consolidated Complaint claims, generally, that during the Class Period, the Defendants allegedly made material misstatements in press releases to the public and in publicly-filed financial statements inflating its financial statements by isrepresenting the cost of a nurses’ strike against the Company.
The original Complaint alleges that Nyack, certain of its directors and officers and KPMG violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of material misrepresentations to the market during the Class Period, thereby artificially inflating the price of the Hospital Bonds. Specifically, the Complaint alleges that with respect to the 1999 Financial Statements, net assets were overstated between $12,500,000 and $12,800,000 as of December 31, 1999, and with respect to the 2000 Financial Statements, net assets were overstated between $10,900,000 and $12,500,000 as of December 31, 2000. On February 12, 2002, Nyack Hospital issue a "Notice of Event" to its Bond holders, detailing and quantifying the misrepresentations in its 1999 and 2000 financial statements. After Nyack released the Notice of Event, the Hospital Bonds traded at $741.50 per bond on March 14, 2002, and, in March 2002, Nyack commenced an action against KPMG for damages arising from its improper audits of Nyack's 1999-2000 financial statements.