On July 3, 2008 Savient Pharmaceuticals announced the United States Court of Appeals for the Third Circuit has entered a Judgment affirming the decision of the U.S. District Court for the District of New Jersey dismissing, with prejudice, the Second Consolidated Amended Complaint against the Company and three of its former officers. The District Court's decision was based on the plaintiff's failure to set forth particularized facts, through direct or circumstantial evidence, which give rise to a strong inference that the defendants acted with intent to defraud, recklessness or a
conscious disregard of the truth.
As summarized by the docket, the defendants responded to the Second Amended Consolidated Class Action Complaint by filing motions to dismiss the complaint. On October 27, 2006, the Court entered the Order signed by U.S. District Judge Harold A. Ackerman granting the defendants’ motion to dismiss the Second Amended Consolidated Class Action Complaint with prejudice, and the civil case was terminated. On November 21, 2006, the plaintiffs filed a Notice of Appeal. The appeal is currently pending in the U.S. Court of Appeals for the Third Circuit.
According to a press release date October 21, 2005, Savient Pharmaceuticals, Inc. announced today that the plaintiffs in the Consolidated Amended Class Action lawsuit, filed on December 20, 2002 against the Company and three of its former officers, have filed a Second Amended Complaint.
In a press release dated August 15, 2005, Savient Pharmaceuticals, Inc. announced that the United States District Court for the District of New Jersey dismissed, without prejudice, the Consolidated Amended Class Action Complaint filed on December 20, 2002 against the Company and three of its officers. The Court's decision is based, in part, on the failure of the complaint by the plaintiffs, investors who purchased shares of BTG during the Class Period of April 19, 1999 through August 2, 2002, to set forth particularized facts that give rise to a strong inference that the defendants acted with scienter (the required state of mind), had a motive to commit fraud upon the subject investors or acted with conscious disregard of the truth or recklessness. In the Court's dismissal without prejudice, the plaintiffs were granted leave to file an amended Consolidated Complaint within 30 days.
As reported in the company's SEC 10-K filing for the fiscal year ending December 31, 2003, in September 2003, the actions were consolidated and co-lead plaintiffs and co-lead counsel were appointed in accordance with the Private Securities Litigation Reform Act. The parties have entered into a stipulation which provides for the lead plaintiff to file an amended consolidated complaint. This amended complaint has not yet been filed.
According to the same 10-K, on December 20, 2002, a purported shareholder class action was filed against Savient and three of its officers. The complaint asserts that Savient’s financial statements were materially false and misleading because Savient restated its earnings and financial statements for the years ended 1999, 2000 and 2001, as reflected in its Form 8-K and accompanying press release issued August 2, 2002. Five virtually identical actions were filed in January and February 2003. On January 23, 2003, a purported shareholder derivative action was filed on behalf of Savient against nine of its officers and directors, its former auditors, Arthur Andersen LLP, and Savient as a nominal defendant. The allegations in the derivative action are substantially similar to the allegations in the purported shareholder class actions. A second purported shareholder derivative action was filed on February 14, 2003 and was consolidated with the first action. This consolidated action was dismissed without prejudice in November 2003. No appeal was taken and the time to file an appeal has expired.
The original Complaint charges BTG and certain of its executive officers with violations of federal securities laws. Among other things, plaintiff claims that defendants' material omissions and the dissemination of materially false and misleading statements concerning BTG's revenue and earnings caused BTG's stock price to become artificially inflated, inflicting damages on investors. The Complaint alleges that, in order to inflate the price of BTG's stock, defendants caused the Company to falsely report its results during 1999, 2000 and 2001 through improper revenue recognition practices, including recognizing revenue in shipments to distributors where significant uncertainties existed concerning realization of the invoiced amounts, which precludes revenue recognition under Generally Accepted Accounting Principles. The Complaint charges that on August 2, 2002, defendants announced that BTG's 1999-2001 results would be restated to eliminate revenue that had been improperly recorded. BTG has now restated its results for each of the years ended December 31, 1999, 2000 and 2001.
