According to a press release dated November 6, 2006, Eastman Kodak Company (NYSE:EK) today announced that the U.S. District Court for the Western District of New York granted summary judgment in favor of the company in a class action lawsuit brought on behalf of shareholders. Plaintiffs filed the suit in federal court on behalf of shareholders who purchased Kodak stock between April 23, 2003 and September 25, 2003. On November 1, 2006, the court dismissed the suit against Kodak, concluding that the allegations were insufficient to support the claims. The lawsuit alleged that Kodak failed to accurately disclose the state of its photographic film and paper business during that time period and failed to adequately inform investors of the risks associated with its business. The court ruled that Kodak had accurately disclosed the state of its business and had clearly informed potential investors that the company's plans were subject to risk and the nature of those risks. "We take our financial disclosure obligations very seriously," said Joyce P. Haag, General Counsel and Senior Vice President, Eastman Kodak Company. "We strive to ensure that investors -- current and potential -- fully understand the characteristics of our business, and we believe that the court's decision reflects that effort." The litigation commenced in June 2005 in federal court for the Southern District of New York. Later that month, and in August 2005, similar lawsuits were filed against Kodak in the federal court for the Western District of New York, and the cases were then consolidated in the Western District of New York.
The original Complaint alleges that Kodak and certain of its officers and directors violated federal securities laws. Specifically, the Complaint alleges that Kodak's financial guidance for the second quarter of 2003, first issued on April 23, 2003, was improper given undisclosed problems within the company. On September 25, 2003, Kodak announced that its then-existing business model had been failing throughout the Class Period and, as a result of operating difficulties, it would be forced cut its historic dividend by 72%. On this news, Kodak's stock price plummeted by 18% to an 18 year-low on September 25, 2003.