Golden State Vintners, Inc. ("Golden State" or the Company) is an American company that produces wine grapes and premium bulk wines and also offers wine processing and storage services.
The original Complaint alleges that Golden State and certain of its directors and officers violated Sections 10 and 20 of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making false statements in a December 23, 2003 merger proxy statement in order to keep the price of Golden State securities artificially low and thus facilitate the Company's takeover by the O'Neill Acquisition Co., LLC, an entity controlled by Golden State's President and Chief Executive Officer. O'Neill Acquisition Co. was also named as Defendant in the Complaint.
Specifically, the Complaint alleges that by the summer of 2003, Golden State was beginning to emerge from a long history of losses coupled with massive writedowns, and that Defendants realized that Golden State had not only turned around financially but had begun to exhibit strong growth. Defendants knew that disclosing the Company's profitability would send the Company's shares higher, making the Defendants' plans to acquire Golden State in a reverse split/going private transaction (the "Reverse Split Scheme") less profitable, if not impossible. As part of Defendants' Reverse Split Scheme, Defendants disseminated to shareholders a proxy statement dated December 23, 2003 (the "Proxy") detailing the terms of the proposed transaction. The Complaint alleges that the Proxy included false statements about the value of Golden State's business and its prospects, which false statements were included in the Proxy for the purpose of inducing Golden State shareholders to approve the sale of Golden State to the O'Neill Acquisition Co., a California limited liability company which would cash out all Golden State shareholders holding less than 5,900 shares for $3.25 per share.
The Complaint further alleges that on January 20, 2004, after concealing the third-party offer for two weeks, Defendants falsely stated that the O'Neill Group transaction had been "indefinitely suspended ... in order to provide more time to fully evaluate current conditions and the potential implications for shareholder value." Defendants further stated that they were terminating the sale to the O'Neill Group due to "recently improved business and market conditions." Thereafter, the Company executed an agreement to sell Golden State for a much higher price and ultimately signed a definitive agreement to sell the Company to The Wine Group for $8.25 per share.
By the Order signed by U.S. District Judge Martin J. Jenkin on August 10, 2005, the Court granted Defendants’ Motion to Dismiss in its entirety, without prejudice. Plaintiff must file an amended Complaint within forty-five days of the date of this Order. The failure to do so will result in the dismissal of the action with prejudice.
On September 23, 2005, the Plaintiffs filed an Amended Class Action Complaint. On November 7, 2005, the Defendants filed a motion to dismiss the Amended Class Action Complaint.
By the Order issued on December 30, 2006, the Court grants Defendants’ Motions and dismisses Plaintiff’s Amended Complaint without prejudice. Plaintiff must file any Second Amended Complaint within 30 days of the filing date of this Order.
According to the Judgment signed by U.S. District Judge Martin J. Jenkins on March 15, 2007, on December 30, 2006, the Court issued an Order dismissing the Amended Complaint without prejudice with leave to amend. On February 15, 2007, the lead Plaintiff filed a notice of his election to instead stand on his Amended Complaint, and requested that final judgment be entered so that appeal can be taken therefrom.
On April 18, 2007, Lead Plaintiff filed a notice appealing the Court's Dismissal Order. The Court of Appeals affirmed the District Court's Dismissal Order on December 11, 2008.
