According to the docket, Judge Terrence McVerry signed the Final Judgment and Order of Dismissal officially closing the case against Consol Energy. The preliminary approval of the settlement fund, totaling $2,700,000 and including $1,028,271.26 in attorney's fees and expenses, was signed by Judge McVerry on February 8, 2007.
On February 18, 2004, the Court entered the Order denying the motion for consolidation, granting the motion for Appointment as Lead Plaintiff and granting the motion for approval of selection of lead and liaison counsel. On May 5, 2004, the plaintiff filed an Amended Class Action Complaint, and the defendants responded by filing a motion to dismiss the Amended Class Action Complaint. On April 14, 2004, Magistrate Judge Francis X. Caiazza issued a Report and Recommendation, recommending that the defendants’ motion to dismiss be granted in part and denied in part. On July 14, 2005, the motion to dismiss was denied as moot, and the plaintiff filed a First Amended Class Action Complaint. The defendants responded by filing motions to dismiss. On April 20, 2006, the Court entered the Order signed by Judge Thomas M. Hardiman denying the defendants’ motion to dismiss. On April 24, 2006, the case was ordered stayed. A hearing has been scheduled for October 27, 2006 at 10:00 AM in Courtroom 5B before Judge Thomas M. Hardiman to consider approval of settlement.
The original complaint charges CONSOL and certain individuals with
violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder. CONSOL is a multi-fuel energy producer
and energy services provider that primarily serves the electric power
generation industry in the United States. CONSOL Energy has two business
segments, Coal and Gas.
Specifically, the complaint alleges that during the Class Period,
defendants issuing false or misleading statements to the public which failed to
disclose and misrepresent the following adverse facts, among others: (a) that
CONSOL was utilizing an aggressive approach regarding its spot market sales by
reserving 20% of its production to that market. By increasing its exposure to
the spot market, the Company was subjecting itself to increased risk and
uncertainty as the price and demand for coal could be volatile; (b) that CONSOL
was experiencing difficulty selling the production that it had allocated to the
spot market. Nonetheless, CONSOL maintained its production levels which caused
its coal inventory to increase; (c) that CONSOL's increasing coal inventory was
causing its expenses to rise dramatically, thereby weakening the Company's
financial condition; and (d) based on the foregoing, defendants' positive
statements regarding the Company's earnings and prospects were lacking in a
reasonable basis at all times and therefore materially false and misleading. The Class Period ends on July 18, 2002. On that date, CONSOL issued a press
release announcing that it would revise its second quarter outlook and that it
expected to lower its dividend. In response to this announcement, the price of
CONSOL common stock declined from $19.05 per share to $12.98 per share, or more than 30%, on volume of more than 2.2 million shares traded, or more than 10
times the average daily volume for the Class Period.