According to a press release date September 29, 2005, Paradigm Medical Industries, Inc. (PMED) announced the completion of the settlement of the federal and state court class action lawsuits. On August 26, 2005, the federal court entered the order and final judgment granting final approval of the settlement agreement reached on February 22, 2005 in the federal court class action lawsuit, dismissing the complaint filed in the lawsuit with prejudice as against the Company and its former executive officers. Following the entry of the order and final judgment in the federal court class action lawsuit, there has been a 30-day period to appeal the order and final judgment. The 30-day period has now lapsed and no appeal was made of the order and final judgment. Consequently, the order and final judgment entered by the federal court is non-appealable.
Further, on August 23, 2005, the state court entered a final judgment and order of dismissal with prejudice, granting final approval of the terms of settlement reached on February 23, 2005 in the state court class action lawsuit, dismissing the state class action lawsuit. Under the terms of settlement of the state court class action lawsuit, U.S. Fire agreed to pay the sum of $625,000 in cash to the class members that purchased shares of Series E Convertible preferred stock on or about July 11, 2001.
In a press release dated August 31, 2005, Paradigm Medical Industries has agreed to pay more than $ 1.5 million to end a 27-month-old federal lawsuit by disgruntled shareholders. The settlement did not require the company to admit guilt to multiple allegations that Paradigm officers conspired to deceive shareholders into investments that ultimately lost them million of dollars. The pact's payoff, however, is close to the $ 2 million plaintiffs' attorneys initially discussed when the first of several, later combined complaints were filed in June 2003. In addition to Paradigm, the settlement also resolves complaints against three former executives of the Salt Lake City medical device maker.
In a press release dated May 27, 2005, pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the Court, that the above-captioned action has been certified as a class action and that a settlement for $1,507,500 has been proposed. A hearing will be held before the Honorable Tena Campbell in the United States Courthouse, 350 South Main Street, Salt Lake City, Utah 84101, at 3:00 p.m., on August 25, 2005 to determine whether the proposed settlement should be approved by the Court as fair, reasonable, and adequate, and to consider the application of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses.
In a press release dated February 23, 2005, Paradigm Medical Industries, Inc. announced that written settlement agreements have been executed to settle the federal and state court class action lawsuits that were filed against the Company and its former executive officers. Under the terms of settlement of the federal court class action lawsuit, U.S. Fire Insurance Company, which issued a Directors and Officers Liability and Company Reimbursement Policy to Paradigm Medical for the period from July 10, 2002 to July 10, 2003, has agreed to pay the sum of $1,507,500 in cash to the class members that purchased securities of Paradigm Medical during the period between April 17, 2002 and November 4, 2002. As a condition to the settlement agreements, the courts in the federal and state court class action lawsuits must have entered orders granting final approval of the settlements reached in those respective actions, and such orders must have become final and non-appealable.
The original complaint charges that Paradigm and certain of its current and former officers and directors violated Section 10b of the Securities Exchange Act of 1934 by issuing a series of materially false and misleading statements to the market beginning on April 25, 2001 and continuing through December 2002. Paradigm develops and sells laser surgical systems, including the Ocular Blood Flow Analyzer ("BFA"). The complaint alleges that Paradigm misrepresented in its Securities & Exchange Commission ("SEC") filings and in press releases that it had received authorization from the American Medical Association for a Common Procedure Terminology code facilitating insurance reimbursement to doctors for performing medical procedures with the BFA. Additionally, the complaint alleges that the Company misrepresented in a press release that it had received a $105 million purchase order, when no such purchase order existed. As a result of these misrepresentations, according to the complaint, the price of PMED securities was artificially inflated during the Class Period.