On June 21, 2006, Court entered the Order and Final Judgment signed by U.S. District Judge Anne E. Thompson. The settlement was approved. On June 21, 2006, the Court further entered the Orders approving the Plan of Allocation and approving attorneys’ fee award and claims administrator fee.
According to the Notice of Proposed Settlement of Class Action dated February 23, 2006, a Gross Settlement Fund consisting of $2,520,000.00 in cash, plus interest, has been established. A hearing will be held before the Honorable Anne Thompson in the United States Courthouse, Clarkson S. Fisher Federal Building, Room 4000, 402 East State Street, Trenton, New Jersey 08606, at 2:00 p.m., on June 14, 2006, to determine whether a proposed settlement of the action as set forth in the Stipulation and Agreement of Settlement with the Defendants dated as of February 17, 2006, is fair, reasonable and adequate and to consider the proposed Plan of Allocation for the Settlement proceeds and the application of Plaintiff’s Counsel for attorneys’ fees and reimbursement of expenses.
As summarized by the same Notice, on April 16, 2003, Plaintiff served a motion for his appointment as Lead Plaintiff and the approval of his selection of Lead Counsel pursuant to Section 21D(a)(3)(B) of the Exchange Act, 15 U.S.C. § 78u-4(a)(3)(B). On June 13, 2003, this Court entered an Order appointing Plaintiff Stuart Glasser, M.D. as Lead Plaintiff and approving his selection of Lead Counsel. On August 25, 2003, Plaintiff filed his Corrected Consolidated Amended Class Action Complaint and Jury Demand (“Complaint”). In October 2004, the MIIX Defendants and the Medical Society of New Jersey filed separate motions to dismiss Plaintiff’s Complaint. On or about April 7, 2004, the Court issued a letter withdrawing Defendants’ motions to dismiss Plaintiff’s Complaint.
The original complaint charges MIIX GROUP and certain of its officers and directors with violations of the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint is also a derivative class action for breaches of the fiduciary duties of MIIX GROUP officers and directors owed to stockholders. The complaint charges the Medical Society of New Jersey with domination and control of the actions of MIIX GROUP, its officers and its directors, at all times during the Class Period and with responsibility for the violations alleged in the complaint. The complaint alleges that during the Class Period, after experiencing over $200 million in unexpected losses from claims and substantially increasing loss reserves, defendants issued a series of statements to the public indicating that the Company was pursuing a reorganization and restructuring plan of MIIX GROUP that would offer the greatest opportunity to realize value for MIIX GROUP stockholders. Thereafter, MIIX GROUP's own directors and officers formed a new competing company raising over $26 million in a private placement and transferred MIIX GROUP's profitable New Jersey medical malpractice business and assets to
that company from which MIIX GROUP only stands to earn license fees, service income, and commissions. MIIX GROUP's directors approved a non-competition agreement assuring MIIX GROUP could not sell insurance or service any other New Jersey medical malpractice insurer other than the new company. The new company and its stockholders are projected to earn $8 million annually by 2007. MIIX GROUP and its stockholders own no interest in the new company, and MIIX GROUP's officers and directors have appointed themselves to serve as the officers and directors of the company by virtue of which they stand to earn substantial compensation. During the Class Period, while MIIX GROUP was expanding its operations simultaneously in over 20 states, MIIX GROUP issued a series of false
and misleading statements about MIIX GROUP's earnings, profitability, business condition, reserves, and expansion plans and issued financial statements that were materially false and misleading and violated Generally Accepted Accounting Principles and rules and regulations of the SEC, thereby misleading investors regarding MIIX GROUP's true financial condition, then-current financial performance, and prospects. MIIX GROUP repeatedly asserted that its insurance company subsidiaries would produce profitable results, that the expansion plans were on track
and advisable, that MIIX GROUP followed "prudent business practices," possessed "unrivaled claims operations and litigation defense service," and was "widely known for defense expertise" at a time that MIIX GROUP officers and directors knew the facts were to the contrary. As a result, the prices of MIIX GROUP's securities were artificially inflated during the Class Period to as high as $18.31 per share. During the first quarter of 2002 MIIX GROUP announced a loss of $45.4 million and adjustment of net loss reserves for prior accident years increasing reserves by $29.5 million attributable to insurance business written during the years 1994 - 2001. Plaintiff seeks to recover damages on behalf of all purchasers of MIIX securities during the Class Period.