On July 17, 2006, the Court entered the Final Judgment and Order of Dismissal with prejudice. The settlement, in the amount of $32,750,000, was approved.
On October 7, 2003, Judge Jeffrey T. Miller of the Southern District of California ordered the consolidation of all related cases into In re SureBeam Corporation Securities Litigation, Case No. 03-CV-001721-JM (POR). On January 5, 2004, Judge Jeffrey T. Miller granted in part and denied in part the motion to appoint lead plaintiff and appointed Milberg Weiss Bershad Hynes & Lerach and Schatz & Noble as co-lead counsel. On January 3, 2005, the judge granted in part and denied in part defendants' motion to dismiss the case. On March 24, 2004, plaintiffs, on behalf of the class, filed a consolidated class action complaint, which defendants moved to dismiss. On January 3, 2005, the court granted in part and denied in part motions to dismiss this complaint. Pursuant to the court’s order, the plaintiff filed an amended complaint on March 1, 2005. On April 18, 2006, the Court preliminarily approved a settlement between the parties and certified a class for settlement purposes only.
The original complaint charges SureBeam and certain of its officers and
directors with violations of the Securities Exchange Act of 1934.
SureBeam provides electronic irradiation systems and services for the
food industry. The complaint alleges that during the Class Period,
defendants caused SureBeam's shares to trade at artificially inflated
levels through the issuance of false and misleading financial
statements. As a result of this inflation, SureBeam was able to
complete an initial public offering of 6.7 million shares, raising net
proceeds of $60 million on March 16, 2001.
On July 30, 2003, the Company issued a press release entitled "SureBeam
to Delay Earnings Announcement." The press release stated in part
"SureBeam Corporation announced today that it is delaying the release
of its second quarter earnings from its planned date of July 31, 2003.
As previously reported by the Company in its Current Report on Form
8-K/A filed on June 11, 2003, on June 9, 2003, Deloitte & Touche LLP
("Deloitte & Touche") was named as the Company's independent auditor
for the year ending December 31, 2003, replacing KPMG LLP. The
Company's management has not completed preparation of the financial
statements for the second quarter and Deloitte & Touche has not yet
completed its review of those statements." On Aug. 12, 2003, the Company issued another press release entitled
"SureBeam to Delay Earnings Announcement." The press release stated in
part: "SureBeam Corporation announced today that it is further delaying
the release of its second quarter earnings from its planned release
date of August 12, 2003 ... Deloitte & Touche LLP ("Deloitte & Touche")
has not completed its reviews of the Company's financial statements." On Aug. 21, 2003, the Company issued a press release entitled "SureBeam
Dismisses Auditor; Seeks to Resolve Issues." The press release stated
in part: "SureBeam Corporation announced today that it is dismissing
its independent public auditor Deloitte & Touche LLP ("Deloitte &
The Company believes that its financial statements which
were audited by national accounting firms and filed with the Securities
and Exchange Commission, were appropriate based on the facts and
circumstances that existed at the time. However, the Board of Directors
has determined that the issues raised by Deloitte & Touche are
sufficiently important and that it wants these issues to be
definitively resolved." The stock dropped to $1.55 per share on this