According to the Company’s Form 10-K for the fiscal year ended December 31, 2004, on December 10, 2004 an order was entered by the court dismissing this action without prejudice in response to a notice of voluntary dismissal without prejudice filed by counsel for the Kissel Family Trust. The Company did not pay any consideration or compensation to the Kissel Family Trust or their counsel in connection with this voluntary dismissal.
The Complaint alleges that Radiation Therapy and certain of its officers and directors issued materially false statements concerning its initial public offering ('IPO'). Specifically, Radiation Therapy failed to disclose the that: (i) the IPO was purely a liquidity event for management/owners -- not a source of growth capital for the Company because 100% of the IPO proceeds went into the hands of Radiation Therapy's primary shareholders; (ii) the numerous related party transactions by Radiation Therapy increased the risk of its business model running afoul of State and Federal laws governing corporate practice of medicine, fee splitting and physician-referrals; and (iii) organic revenue growth had slowed dramatically and could be further disrupted in January due to changes in the way medical oncologists run their businesses. On September 9, 2004, Banc of America Securities ('Banc of America') initiated coverage of Radiation Therapy Services with a 'sell' rating and an $11 target price. Banc of America said the Company's IPO 'was purely a liquidity event for management/owners' and noted that following the IPO management 'gifted itself another 5% of the company via new option grants.' Banc of America said: 'We simply cannot recommend purchasing the stock until the company's board structure (currently four insiders, just three independent directors) and extensive related party relationships are materially overhauled.' On this news, Radiation Therapy fell $1.66 per share, or 11.98%, to $12.20 per share.