On April 22, 2005, the plaintiffs filed a notice of appeal from the Order and Judgment dismissing the complaint. On May 24, 2005 the United States Court of Appeals issued an order dismissing the case in its entirety.
According to a press release dated March 30, 2005, Alamosa Holdings, Inc. announced that the United States District Court for the Northern District of Texas has entered an order dismissing all the claims against the Company and certain of its Company's officers and directors in the shareholder class action lawsuit filed in November 2003 and later consolidated with other similar federal lawsuits. The Court's opinion carefully examined all of the allegations in the consolidated complaint and determined they stated no viable claim against any defendant. The Court also denied the plaintiffs' request to amend their pleadings.
The original complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, by issuing numerous positive statements throughout the Class Period regarding the Company's growth and demand for the Company's services. Specifically, the complaint alleges that these statements were each materially false and misleading when made as they misrepresented and omitted the following adverse facts which then existed and disclosure of which was necessary to make the statements not false and misleading, including, but not limited to, the following: (a) that the Company was increasing its subscriber base by relaxing its credit criteria for new customers. In other words, the Company's subscriber growth was the result of the extension of credit to high credit risk customers; (b) that the Company had been experiencing high involuntary disconnections related to its high credit risk customers and as a result was carrying tens of millions of dollars of impaired receivables on its financial statements; and (c) that upon the tightening of credit standards, the Company experienced lower subscription growth as a result of its policy that required credit-challenged customers pay substantial deposits upon the initiation of services. Upon the disclosure of the true facts about the Company, the price of Alamosa securities declined materially.