Plaintiffs filed a Stipulation of Settlement with the court, outlining a $3.5 million settlement, at least a portion of which will be paid by insurers.
As of August 27, 2008 discovery continues in the case.
According to a press release dated March 27, 2006, Bradley Pharmaceuticals, Inc. received notice that its July 2005 motion to dismiss the Federal securities class action litigation pending against it in the United States District Court for the District of New Jersey, was denied. Bradley continues to dispute the allegations set forth in the class action litigation and intends to vigorously defend itself.
The complaint charges Bradley Pharmaceuticals and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Bradley Pharmaceuticals is a specialty pharmaceutical company that acquires, develops and markets prescription and over-the-counter products in select markets.
Specifically, the complaint alleges defendants issued materially false and misleading statements regarding the Company's increasing financial performance and future prospects. As alleged in the complaint, these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others, which were known to defendants, or recklessly disregarded by them, at all relevant times: (a) that the Company was materially overstating its financial results by engaging in improper accounting practices; (b) that the Company's future sales growth from its Keralac franchise would be hindered by generic competition; and (c) as a result of the foregoing, there was no reasonable basis for the Company's revenue and earnings guidance.
The complaint further alleges on or around February 28, 2005, the Company issued a press release announcing that the staff of the Securities and Exchange Commission ("SEC") is conducting an informal inquiry to determine whether there have been violations of the federal securities laws by the Company. In connection with the inquiry, the SEC staff has requested that the Company provide it with certain information and documents concerning issues related to revenue recognition and capitalization of certain payments. In light of the ongoing SEC staff inquiry and separate counsel's review, the Company also announced that it be delaying the release of its 2004 earnings.
As a result of this announcement, shares of Bradley Pharmaceuticals common stock closed at $9.75 per share, a decline of $3.50 per share, or almost 30%, from the previous trading day's close.