On June 30, 2006 both parties submitted their notice on the results of the mediation; neither side were able to find agreement and settlement hopes were abandoned. With both sides' inability to agree on settlement, the judge ordered the case dismissed with prejudice on December 18, 2006.

On March 15, 2004, the Court entered the Memorandum Order granting the defendants’ motion to dismiss the Complaint. The case was closed. However, on November 23, 2004, the Court entered the Memorandum Order granting the plaintiff’s motion for leave to file an Amended Complaint, and the case was reopened. On December 14, 2004, the plaintiffs filed an Amended Complaint. By the Order entered on March 24, 2006, the case was referred to mediation.

The complaint charges defendants with violations of the Sections 10(b) and 20(a) of the Securities Exchange Act of 1934. Plaintiffs claim defendants' omissions and material misrepresentations concerning IT Group's financial performance, in Company quarterly press releases and Form 10-K annual reports and Form 10-Q quarterly reports filed with the Securities and Exchange Commission between October 21, 1998 and February 23, 2000, artificially inflated the Company's stock price, inflicting damages on investors. The complaint alleges that during the Class Period defendants (i) overstated IT Group's accounts receivable by improper inclusion of unapproved change orders and purchase price adjustments made in connection with acquisitions; (ii) misrepresented the quality of IT Group's accounts receivable, by overstating billed receivables and understating unbilled receivables; (iii) concealed that the IT Group was undergoing a liquidity crisis due to the failure of its acquisitions strategy, (iv) failed to disclose that the government contracts, which IT Group claimed provided it with a multi-billion dollar backlog, were actually awarded to multiple vendors, and (v) failed to disclose that the quality of IT Group's receivables was impaired due to the Company's violation of the U.S. Government's Federal Acquisition Regulations "pay-when-paid" requirements.