According to a press release dated July 19, 2007, a hearing will be held before the Honorable Rebecca R. Pallmeyer, in the United States Courthouse, Everett McKinley Dirksen Building, Courtroom 2119, 219 South Dearborn Street, Chicago, Illinois 60604, at 10:00 a.m., on September 7, 2007 to determine whether the proposed settlement should be approved by the Court as fair, reasonable, and adequate, and to consider the application of Plaintiffs' Lead Counsel for attorneys' fees and reimbursement of expenses and for an award to Lead Plaintiff and Class Member Witnesses.
In a press release dated April 16, 2007, Motorola, Inc. (NYSE: MOT) announced that the company has settled a Telsim-related securities class action lawsuit entitled In Re Motorola Securities Litigation. The $190 million settlement payment will be taken as a charge in the Company's recently completed first quarter, partially offset by estimated insurance recoveries of $75 million.
In a press release dated January 10, 2006, the action has been certified by the Court as a Class Action on behalf of a Class consisting of all persons who purchased publicly traded Motorola, Inc. common stock or certain registered debt securities during the period from February 3, 2000 through May 14, 2001 and who allegedly were damaged thereby.
Several purported shareholder class action lawsuits were filed against Motorola and certain of its present and former executive officers in the United States District Court for the Southern District of New York.
According to a “Case Management Order” of the New York’s District Court entered on May 6, 2003, pursuant to F.R.C.P. 42, Section 21D(a)(3)(B)(ii) of the Exchange Act and/or Section 27(a)(3)(B)(ii) of the Securities Action, actions 03cv1094, 02cv10209, 03cv12, 03cv135, 03cv432, 03cv468, 03cv543, were consolidated for all purposes, and according to an “Stipulation and Order” entered on August 11, 2003, the resulting consolidated action were transferred to the Northern District of Illinois.
The consolidated complaint alleges that during the Class Period, defendants made numerous false statements about transactions between Motorola and Telsim Mobil Telekomunikasyon Hizmetleri A.S. ("Telsim"), a wireless telecommunications carrier with operations in Turkey. On February 3, 2000, Motorola announced that it had entered into a three year agreement to provide products and services to Telsim, and further stated "that revenue from this supplier agreement could be at least $1.5 billion."
More specifically, the complaint alleges that Motorola failed to disclose that the sales to Telsim were predicated upon Motorola providing Telsim with $1.7 billion in vendor financing, in effect, loaning Telsim the money used to purchase Motorola products and services – and forcing Motorola to bear the enormous risk of default. Defendants further failed to disclose the deterioration of the relationship between Motorola and Telsim (placing the likelihood of payment in greater jeopardy); and also failed to disclose that the Company had, through similar vendor financing arrangements, provided its customers with an aggregate of $2.9 billion in vendor financing for purchases of Motorola products.
The complaint further alleges that on March 29, 2001, Motorola disclosed in a Proxy Statement filed with the SEC that its vendor-financing commitments totaled $2.6 billion, of which $1.7 billion related to "a single customer in Turkey" (Telsim). On April 6, 2001, reports detailing Motorola’s credit problems caused shares of Motorola stock to decline by twenty three percent (23%). In mid-May 2001, Motorola’s quarterly SEC filing disclosed that Motorola had loaned Telsim $2 billion in vendor financing. Motorola also disclosed that Telsim had failed to make a scheduled payment of $728 million. Telsim eventually defaulted on its obligations to Motorola.
The original Complaint alleges that defendant violated Section 10(b) of the
Securities Exchange Act of 1934 and breached his fiduciary duty to the
Class by issuing a series of materially false and misleading statements
about the Company's financial results. In particular, it is alleged
that Motorola's vendor financing commitments were never properly
disclosed, including over $1.7 billion in vendor financing to a single
customer in Turkey. The Complaint alleges that as a result of these
false and misleading statements the price of Motorola common stock was
artificially inflated throughout the Class Period causing plaintiff and
the other members of the Class to suffer damages.
