On October 3, 2005, the Court entered the Order signed by U.S. District Judge Susan C. Bucklew granting the motion to certify the class sand approve the settlement. The Court also entered the Order granting the motion for attorneys' fees and costs. Judgment was entered in favor of the plaintiff on October 4, 2005. On October 17, 2005, the Court entered the Order granting the motion to vacate judgment.
According to the Notice of Pendency and Settlement of Class Action dated July 1, 2005, asettlement hearing will be held on September 23, 2005 at 9 a.m., before the Honorable Susan C. Bucklew, United States District Judge, at the Sam M. Gibbons United States Courthouse & Federal Building, 801 North Florida Avenue, Tampa, Florida 33602 (the “Settlement Hearing”). The Settlement Hearing’s purpose will be to determine: (1) whether the Settlement, consisting of an $8,150,000 cash fund, plus accrued interest for the benefit of the Class, should be approved as fair, just, reasonable and adequate; (2) whether the proposed plan to distribute the Settlement proceeds described herein (the “Plan of Allocation”) is fair, just, reasonable, and adequate; (3) whether Lead Plaintiff and Lead Counsel have adequately represented the Class; (4) whether Plaintiff’s Counsel’s application for an attorneys’ fees and expenses award should be approved; and (5) whether the Action should be dismissed with prejudice.
As summarized by the same Notice, in or about February 2004, two class action complaints were filed in the United States District Court for the Middle District of Florida against QDI, Thomas L. Finkbiner and Samuel M. Hensley (the “Named Defendants”). On May 11, 2004, the Court consolidated the pending actions. On June 28, 2004, the Court appointed Jemmco Investment Management, LLC Lead Plaintiff and approved Jemmco’s choice of counsel, Bernstein Liebhard & Lifshitz, LLP as Lead Counsel and liaison counsel for the Class in this Action. The Court initially required Lead Plaintiff to submit a consolidated, amended complaint by August 27, 2004, but in view of a scheduled mediation, the Court extended that deadline. Before the mediation, Lead Plaintiff prepared a draft Consolidated Amended Complaint (the “Complaint”), which names the Defendants as parties in the Action. Under an agreed order, Lead Plaintiff was to file the Complaint on January 31, 2005. Because the Parties signed a Memorandum of Understanding on January 18, 2005, they agreed to postpone the Complaint’s filing indefinitely.
The original complaint charges Quality Distribution and certain individuals with violations of Sections 11 and 15 of the Securities Exchange Act of
1933. On or about November 7, 2003, Quality Distribution commenced an initial
public offering of 7 million of its shares of common stock at an offering price
of $17.00 per share (the "IPO"), thereby raising approximately $110.7 million.
In connection therewith, Quality Distribution filed a registration statement,
which incorporated a prospectus (the "Prospectus"), with the SEC. The complaint
alleges that the Prospectus was materially false and misleading because Quality
Distribution materially overstated its financial results and its financial
statements were not prepared in accordance with Generally Accepted Accounting
Further, the complaint alleges that on February 2, 2004, the Company announced that it expected to take a fourth-
quarter charge and restate its results back to 2001 after discovering insurance
law violations at Power Purchasing Inc. ("PPI"), one of its subsidiaries. The
Company announced that it expects to take fourth-quarter 2003 charges of
between $3 million and $6 million and it forecast net income for the same
period would be negatively impacted by the problems at the subsidiary, along
with other one-time expenses.