Case Page

 

Case Status:    DISMISSED    
On or around 09/22/2004 (Other)

Filing Date: July 17, 2003

As reported by the Company’s Form 10-Q For The Quarterly Period Ended September 30, 2004, on September 17, 2004, an Entry of Dismissal was filed in the United States Court of Appeals, formally dismissing the plaintiff’s appeal of the lower court’s dismissal, with prejudice, of the class action lawsuit filed by Richard M. Barr in the United States District Court for the Northern District of Georgia against the Company and certain individuals.

According to a press release dated July 20, 2004, the securities class action filed has again been dismissed by the United States District Court. The Court's ruling is included the specific holding that there were no allegations to support a claim that the Company or its executives violated the securities laws. This is the second time this case has been dismissed by the court.

The 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 October 24, 2001 and June 25, 2002. During the Class Period, the
defendants touted the "strong performance" of all of its diabetes businesses
and repeatedly bragged about the company's growth, noting the signing of new
contracts and anticipated contracts. Defendants assured the market during this
time that they were ramping up the company's infrastructure and implementing a
major systems change that would help them fulfill their goal to be the most
technologically advanced provider in their sector of the health industry and
that would significantly increase their capabilities. Citing their growth,
defendants explained that the reason expenses had exceeded anticipated revenues
at certain times was that it was difficult to time the need for additional
personnel and infrastructure with the receipt of large contracts because
"contractual negotiations can delay the anticipated start dates for new disease
management programs."

Unbeknownst to the investors, however, the complaint alleges that the company
was experiencing serious known problems that rendered defendants' Class Period
statements false and misleading and that defendants had a duty to disclose
under Item 303(a)(ii) to Regulation S-K. Specifically, the complaint alleges
that the defendants failed to disclose until June 25, 2002, despite a duty to
do so, the following adverse, known facts: (a) the company's Health Enhancement
Segment was experiencing significant "information system constraints" which led
to unfilled customer orders; (b) the company's Facet Technologies division was
experiencing higher costs as a result of undisclosed inventory and supply chain
management problems; (c) Facet's gross margins were materially and adversely
affected by decreasing price concessions from its major suppliers; (d) Matria's
gross profit margins were being negatively impacted by an increase in the price
of one of its key drugs; and (e) the company's Health Enhancement revenues
would be negatively impacted by at least $800,000 due to the bankruptcy of a
health plan whose deteriorating financial condition the defendants knew of or
were severely reckless in disregarding. The complaint alleges that the
defendants were motivated to conceal these problems in order to inflate the
purchase price of Matria common stock because defendants negotiated two
acquisitions during the Class Period, using Matria common stock as currency.

On June 25, 2002, after the close of trading, defendants shocked the market by
revising the company's financial outlook for fiscal 2002 and revealing the
problems discussed above. In response to the Company's shocking news, the price
of Matria's common stock plummeted on unusually heavy volume the next trading
day, dropping from nearly $12 to $7 before closing at $8.95 per share. A chorus
of Wall Street analysts also downgraded the stock as a result.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Healthcare Facilities
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: MATR
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: N.D. Georgia
DOCKET #: 03-CV-02007
JUDGE: Hon. Thomas W. Thrash
DATE FILED: 07/17/2003
CLASS PERIOD START: 10/24/2001
CLASS PERIOD END: 06/25/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Lasky & Rifkind, Ltd.
    100 Park Avenue, Lasky & Rifkind, Ltd., NY 10017
    212.907.0800 212.684.6083 ·
  2. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  3. Law Offices of Marc S. Henzel (Lawrence)
    335 Central Avenue, Law Offices of Marc S. Henzel (Lawrence), NY 11559
    516.374.0707 516.295.3473 · securitiesfraud@comcast.net
  4. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date
COURT: N.D. Georgia
DOCKET #: 03-CV-02007
JUDGE: Hon. Thomas W. Thrash
DATE FILED: 12/15/2003
CLASS PERIOD START: 10/24/2000
CLASS PERIOD END: 06/25/2002
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Chitwood & Harley LLP
    1230 Peachtree Street, N.E., 2300 Promenade II, Chitwood & Harley LLP, GA 30309
    888.873.3999 404.873.4476 · info@chitwoodlaw.com
  2. Law Offices of Marc S. Henzel (Lawrence)
    335 Central Avenue, Law Offices of Marc S. Henzel (Lawrence), NY 11559
    516.374.0707 516.295.3473 · securitiesfraud@comcast.net
  3. Shepherd, Finkelman, Miller & Shah, LLC
    35 East State Street, Shepherd, Finkelman, Miller & Shah, LLC, PA 19063
    877.891.9880 · jshah@classactioncounsel.com
  4. Wolf Haldenstein Adler Freeman & Herz LLP (New York)
    270 Madison Avenue, Wolf Haldenstein Adler Freeman & Herz LLP (New York), NY 10016
    212.545.4600 212.686.0114 · newyork@whafh.com
No Document Title Filing Date