Pursuant to the Order entered on May 1, 2002, the Court certified the class and approved the Settlement Agreement. The Court further entered the Final Judgment dismissing the action with prejudice.
According to the Company’s Form 10-Q for the quarterly period ended September 30, 2001, on May 8, 2000, the court entered an order appointing the Connecticut Retirement Plan and Trust Funds as lead plaintiff and appointing the law firm of Goodkind Labaton Rudoff & Suchrow LLP as lead plaintiff's counsel.
The lead plaintiff filed its Amended Consolidated Class Action Complaint on July 14, 2000. Defendants filed a motion to dismiss on October 3, 2000. On August 16, 2001, the court granted the motion in part and denied it in part, allowing the plaintiff to replead its claims. On November 7, 2001, the Company announced that it had reached a settlement agreement with the plaintiff, resolving all claims brought in the action against the Company as well as claims against current and former officers and directors of the Company. Under the settlement agreement, which is subject to additional confirmatory discovery by the plaintiff and approval by the court, the Company will consent to the certification of a class for settlement purposes consisting of certain purchasers or acquirers of Company securities during the period from June 11, 1998 through November 9, 1999. If the settlement is approved, the Company will pay $457 to the members of the class and will present and recommend approval to its shareholders, at or before the 2003 annual meeting of shareholders, a binding resolution to declassify the Board of Directors and to require that all directors are elected annually. In anticipation of the settlement agreement, the Company recorded a charge to asset impairments and unusual items of $389 in the third quarter 2001.
The original complaint alleges that during the Class Period, certain officers and directors of WMI issued false statements which caused the price of Waste Management common stock to trade at artificially inflated prices. Further, the lawsuit alleges that many senior officers and/or directors of WMI sold 899,797 shares of their stock for over 49.8 million dollars before the revelations of July 6, 1999 occurred and Waste Management stock collapsed. After these sales were made, however, WMI issued a press release revealing that sales in the June/99 revenues would be $250,000,000 below forecast and the growth in future quarters would be much lower than previously forecast.