On May 9, 2007 Judge Joseph J. Farnan, Jr signed the Order & Final Judgment in favor of the Class Members and against AstroPower, Inc. The judge awareded Plaintiff's attorneys fees of 25%, or $250,000 and an additional $85,783.34 in expenses from the $1,000,000 settlement fund.
According to a press release dated March 6, 2007, the action has been certified as a class action for certain purposes and that a settlement for One Million Dollars ($1,000,000) has been proposed. A hearing will be held before the Honorable Joseph Farnan in the United States District Court for the District of Delaware, J. Caleb Boggs Fed. Bldg., 844 N. King Street, Wilmington, DE 19801, at 10:00 a.m., on May 9, 2007 to determine whether: (1) the proposed settlement should be approved by the Court as fair, reasonable and adequate; (2) Lead Counsel's application for an award of attorneys' fees and reimbursement of expenses should be approved; and (3) the claims against Defendants and Astropower should be dismissed with prejudice.
On April 28, 2006, the remaining individual defendant filed a motion to dismiss for failure to state a claim. On October 17, 2006, the plaintiff’s lawyer filed a letter to The Honorable Joseph J. Farnan, Jr. advising the Court that the parties have reached an agreement in principle and requesting the Court to defer issuing a ruling on the pending motion to dismiss and stay the proceedings until the parties submit settlement papers.
According to a press release dated February 28, 2006, the U.S. District Court for the District of Delaware dismissed a securities fraud class action against a company's chief financial officer because the class failed to plead the claims with particularity as required by the Private Securities Litigation Reform Act. Lead class plaintiff, Leeb Capital Management, on behalf of itself and others similarly situated, sued AstroPower Inc. for securities fraud violations pursuant to § 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5….The class also sued AstroPower's CFO, as a controlling person pursuant to § 20 of the Exchange Act. AstroPower's CFO moved to dismiss the claims against him, arguing that the complaint failed to meet the heightened pleading requirements of the PSLRA, failing to plead to particular facts surrounding the alleged fraud, establish scienter, and show that the CFO was a "controlling person" within § 20. …The district court concluded that the complaint failed to describe with particularity the facts surrounding the alleged material misrepresentations because it did not state the amount of money, customers, or dates involved in the alleged fraud. The court held that the Rule 10(b) and 10b-5 claims were not sufficiently pled. Thus, the district court ruled that the § 20 claim was not established against the CFO, due to the lack of an independent claim under the Exchange Act. The district court dismissed the class claims against AstroPower's CFO, but allowed the plaintiffs leave to amend the complaint.
As summarized by the latest docket, on April 8, 2004, AstroPower, Inc. filed a suggestion of bankruptcy, and on April 15, 2004, the Court entered the Order signed by U.S. District Judge Joseph J. Farnan Jr. staying the action as to defendant AstroPower pending disposition of Defendant's pending action in the United States Bankruptcy Court for the District of Delaware. On January 14, 2005, the plaintiffs filed an Amended Class Action Complaint against the remaining individual defendants. On May 13, 2005, one of the individual defendants filed a motion to dismiss based on failure to state a claim and failure to plead with sufficient detail.
The original complaint charges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing a series of materially false and misleading statements to the market between February 22, 2002 and August 1, 2002.
The complaint alleges that AstroPower develops, manufactures, markets
and sells a range of solar electric power generation products. The
complaint further alleges that the company claimed that it was well
positioned to take advantage of the increasing demand for solar power
products. The complaint further alleges that, throughout the Class
Period, the Company reported strong revenue and earnings growth and
that, as a result of these statements and reports, which were
disseminated to the investing public, and which formed the basis for
research analysts' reports on the Company, the Company's per share stock
price reached a Class Period high of $27 on March 28, 2002.
In truth and in fact, throughout the Class Period, the Company was
unable to effectively manage its expanding and increasingly complex
operations; it was, inter alia, unable to allocate resources among its
various manufacturing facilities to effectively meet regional demand or
to tailor its production capacity to actual demand. Consequently, during
the time that the Company was stating that it was well positioned to
take advantage of the increased demand for solar products, it was in
fact losing ground to more effective competitors. Additionally, to
maintain the illusion that its operations were successful, the Company
throughout the Class Period reported artificially inflated revenue and
earnings by, inter alia, recording revenue in advance of shipment,
contrary to its stated principles of revenue recognition.
The truth was revealed on August 1, 2002 when, after the close of
trading, the Company announced its results for the second quarter ended
June 30, 2002. Analysts were stunned. Reported revenue and net income
had not grown but, on the contrary, second quarter income was $365,000,
or $0.02 per diluted share compared to $1.7 million, or $0.07 per
diluted share in the year-earlier second quarter and revenue of $20.4
million represented only a one percent increase over reported revenue
for the prior quarter and was approximately $4.9 million below analysts'
consensus estimate. On this news, AstroPower's share price plunged 48%, or $7.12, to $7.77, its lowest price in almost three years.