On August 30, 2006, the Court entered the Mandate from the U.S. Court of Appeals for the Second Circuit. According to the appeal, the Judgment of the District Court was affirmed.
On November 8, 2004, the Court entered the Order granting the motion to appoint lead plaintiff and co-lead counsel. On December 28, 2004, the plaintiff filed an Amended Class Action Complaint, and the defendants responded by filing a motion to dismiss. Before any ruling, the plaintiff filed a Second Amended Class Action Complaint on April 13, 2005. On August 15, 2005, the Court entered the Memorandum Decision granting the defendants’ previous motions to dismiss the complaint. On August 18, 2005, the Court entered Judgment in favor of the defendants and against the plaintiffs. On September 14, 2005, the plaintiff filed a notice of appeal from the Memorandum Decision and Judgment.
Aksys was dismissed without prejudice from this action by the stipulation between counsel for plaintiffs and counsel for Aksys entered on September 13, 2004.
The original complaint alleges that the revelation of certain defendants’ previously concealed purchases and ownership levels in Aksys last July caused an increase in the price of Aksys that did damage to class members in that they would not have sold short had the truth been disclosed properly.
Aksys, of Lincolnshire, Ill., was one of two companies in which Durus, a long/short equity hedge fund with a special interest in the health care industry, acknowledged an outsized accidental accumulation at that time. The lawsuit filed, however, makes no mention of the other company.
Currently, there is some question to whether or not there is any basis for Aksys’ liability in the allegedly fraudulent purchases of its stock. However, according to the press release, under the law, Aksys may be liable on the basis of its settlement with the other defendants. Specifically, in January 2004 Aksys received US$4.5 million from Durus for settling claims under §16(b) of the Securities Exchange Act of 1934, and in February 2004 it received another payment of US$48.7 million for settling all other claims. The February settlement agreement included the purchase by certain defendants of US$16.1 million of unsecured subordinated promissory notes.