According to a press release dated March 21, 2005, Cross Country Healthcare, Inc. reported that the securities class action lawsuits and the stockholder derivative lawsuits previously filed in the United States District Court for the Southern District Court of Florida in West Palm Beach against the Company, certain executive officers and Board of Directors have all been voluntary dismissed without prejudice by the respective plaintiffs. No consideration was paid by the Company.
The original complaint charges Cross Country and certain of its officers and directors with violations of the Securities Exchange Act of 1934. According to the complaint, during the Class Period, defendants knew but concealed from the investing public that: (i) the demand for the Company's short-term, temporary nursing contracts, Cross Country's core business was not as great as represented by defendants, and (ii) the Company was experiencing problems with staffing orders for temporary nurses being received and then abruptly cancelled by hospitals, a problem which, if disclosed to the market, would have a materially negative impact on the Company's stock price.
On the news of the decline in demand and drop in the number of its full-time nurses, Cross Country shares fell to a then all-time low of $13.06 in intra-day trading, a decline of more than 50% from the previous day's closing price of $26.19. Cross Country's share price closed below the IPO price for the first time in its history, and it did so definitively at $14.34, or 15% below the IPO price and 45% below the previous day's close.
Note: Cross Country provides healthcare staffing services in the United States with a client base of approximately 3,000 hospitals, pharmaceuticals companies and other healthcare providers across all 50 states. Cross Country provides travel nurse staffing services and per diem nurse staffing services.