By the Final Judgment and Order of Dismissal entered on July 21, 2006, and signed by U.S. District Judge David Frank Hamilton, this matter came before the Court for hearing on July 21, 2006, for the Court to consider and make a final determination concerning the fairness of the Settlement Agreement entered by the parties. On April 19, 2006, the Court entered an Order preliminarily approving the Settlement Agreement and directing notice of the Settlement Agreement to the Class. The Court further finds that the Settlement Agreement has been entered into in good faith, is non-collusive, and that its terms are fair, reasonable, adequate, and in the best interests of the Defined Class. The Amended Complaint and the Counterclaim in this Litigation and any and all claims asserted in the Litigation are dismissed with prejudice, and this judgment, upon filing, shall be deemed a final judgment with respect to all claims and counterclaims in this Litigation.
According to the Stipulation and Agreement of Settlement dated June 28, 2005, found in the Motion for Preliminary Approval of Settlement Agreement and Notice of Settlement to the Class Members, Ent & Imler agrees to pay a total of $1,850,000 to the Plaintiffs in settlement of the Litigation.
As summarized by the [Proposed] Notice of Class Action dated June 15, 2005, on December 11, 2003, the Court granted Ent & Imler’s motion to dismiss the original complaint, in part finding that Mr. Marwil did not have the authority or standing as the conservator/receiver of CEG to bring claims belonging to the Noteholders. On January 15, 2004, the Amended Complaint was filed in the Action. As part of the Amended Complaint, plaintiff asserted on behalf of itself and a class of Noteholders the federal securities law claims. On November 24, 2004, the Court denied Ent & Imler’s motion to dismiss the Amended Complaint. On May 9, 2005, the Court certified this lawsuit to proceed as a Class Action pursuant to Rule 2 of the Federal Rules of Civil Procedure. Further, on May 9, 2005, the Court appointed Central Community Church of God, headquartered in Wichita, Kansas, to serve as the Lead Plaintiff for the Action (the “Lead Plaintiff”), and approved the Lead Plaintiff’s choice of counsel, the law firms of Sommer Barnard Attorneys, PC, and Rubin & Levin, PC, to serve as Lead Counsel for Plaintiff and the Class (the “Lead Counsel”). The Court has ordered the parties to participate in a settlement conference and negotiations on June 28, 2005, under the supervision of the Honorable V. Sue Shields, Magistrate Judge of the Southern District of Indiana.
The original complaint charges Ent & Imler CPA Group, PC, which acted as CEG's independent auditors from December 1997 to September 2002, with violating the federal securities laws by certifying CEG's consolidated financial statements which were made a part of certain Offering Circulars, with Ent & Imler's approval, and otherwise helping to prepare the Offering Circulars. The complaint alleges that the Offering Circulars, including the consolidated financial statements, contained fraudulent misrepresentations and omissions that misled Noteholders and concealed CEG's true financial condition, including misrepresenting that the proceeds from the sale of Investment Notes would be used primarily to fund church loans and that CEG maintained a reserve of liquid assets equal to a percentage of CEG's outstanding note obligations, and omitting information that CEG was engaging in a series of high-risk "bargain sale" transactions using inflated appraisals and other means to exaggerate the value of the properties or businesses acquired by CEG.
Note: This securities fraud class action has been commenced on behalf of all persons (Noteholders) who purchased between April 30, 1998 and April 30, 2002 Investment Notes offered by Church Extension of the Church of God, Inc. through a series of Offering Circulars (dated April 30, 1998; April 30, 1999; May 1, 2000; and November 1, 2001) and who suffered losses as a result of their investment.