According to the docket, on March 29, 2005, the Court entered the Order signed by U.S. District Judge Kenneth A. Marra granting the defendants’ motions to dismiss the Second Amended Complaint with prejudice. That same day, Final Judgment was entered and the case was closed. The plaintiff filed a notice of appeal from the judgment, but the appeal was later dismissed by the Order entered on August 1, 2005.
On March 14, 2003, the plaintiff filed an Amended Complaint. On March 21, 2003, the Court entered the Order granting the motion for lead plaintiff and lead counsel. On April 11, 2003, the defendants filed motions to dismiss the Amended Complaint. On March 5, 2004, the Court entered the Order granting the motions to dismiss without prejudice. On April 12, 2004, the plaintiff filed a Second Amended Complaint, and the defendants responded by filing motions to dismiss the Second Amended Complaint.
The original Complaint alleges that the Defendants violated Sections 10(b) and 20(a) of the Securities and Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of misrepresentations to the open market during the Class Period concerning the valuation of one of Unapix's primary assets: its film and television library. Specifically, the Defendants overstated the value of Unapix's film and television library by at least $51.1 million in order to artificially inflate the market price of Unapix. The Defendants' misrepresentations artificially inflated the value of Unapix stock by a maximum of 50 cents per share during the Class Period; an increase of nearly 35% from one day prior to the start of the Class Period. At the time the Defendants made these misrepresentations, Unapix had overdrawn its credit by $1,176,000, and was in dire financial straits. These misrepresentations were made in order to allow the Defendants to increase the value of their personally-held Unapix shares; keep a financially-troubled Unapix in business so that the Defendants could continue to receive their excessive level of executive compensation; and induce potential investors to provide much-needed financing. These misrepresentations almost caused a company named H5B5 Media AG, Munich to invest $4 million in Unapix. Ultimately, however, it did not do so. On November 21, 2000, the American Stock Exchange halted the trading of Unapix stock. On November 28, 2000, Unapix filed for protection under Chapter 11 of the Bankruptcy Code.