According to a press release dated May 25, 2007, the action has been certified as a class action for certain purposes and that a settlement for One Million Two Hundred Thousand Dollars ($1,200,000) has been proposed. A hearing will be held before the Honorable John E. Sprizzo in the United States District Court for the Southern District of New York, United States Courthouse, 500 Pearl Street, New York, New York 10007-1312, Courtroom 21C, at 3:00 p.m., on July 19, 2007 to determine whether: (1) the proposed Settlement should be approved by the Court as fair, reasonable and adequate; (2) Lead Counsel's application for an award of attorneys' fees and reimbursement of expenses should be approved; (3) the Plan of Allocation should be approved; and (4) the claims against Defendants should be dismissed with prejudice.
By the Order entered on April 25, 2007, the court certifies for purposes of effectuating this settlement, a class pursuant to FRCP 23(c) consisting of all persons and entities who purchased or otherwise acquired the American Depository Receipt shares of TV Azteca between 6/17/03 and 1/9/04 inclusive. Pursuant to FRCP 23 and for purposes of this settlement only, lead plaintiff Alfonso de la Garza Evia Quiroga is appointed as class representative. Further, according to the Order, the court preliminarily approves the settlement of the action as set forth in the stipulation and the proposed plan of allocation, and a hearing pursuant to Rule 23(e) of the FRCP is scheduled to be held before the court on 7/19/07 at 3:00 p.m. before the Honorable John E. Sprizzo.
On April 16, 2004, the Court entered the Order granting the motions to appoint Alfonso de la Garza Evia Q. as Lead Plaintiff and to approve the selection of lead counsel. On November 3, 2004, the plaintiff filed a Consolidated Amended Complaint.
The suit alleges that during the Class Period defendants failed to disclose certain related-party transactions between a privately-held company jointly owned by the Company's Chairman, Ricardo Salinas Pliego ("Salinas") and the Company's President, M. Saba Masri ("Saba") and one of the Company's affiliates -- Unefon Corporacion RBS ("Unefon") a wireless telecommunications provider in Mexico. Specifically, defendants denied any affiliation with a "white-knight" group of investors that had saved Unefon from bankruptcy back in June of 2002. Defendants stonewalled disclosure of the true facts, including ignoring advice from their securities lawyers in the U.S., until a spin-off of Unefon was completed in December 2002. The spin-off anticipated that Unefon's shares would be registered to trade in
the U.S. markets facilitating a merger with Salinas' other telecommunications
holdings. Then, on January 9, 2004, defendants stunned the markets by admitting
that the "white-knight" investors were in fact Salinas and Saba who made a
profit of $218 million when their privately-held company bought Unefon's debt
for $107 million and then sold it back for $325 million. Market reaction to defendants' belated disclosures was severe. By January 12, 2003, the first day of trading following the Company's admission the price of TV Azteca securities fell more than 14.9 percent in value to close at $7.76 per share in heavy trading volume.