On January 12, 2009, an order was entered by the court regarding proper class members regarding the proposed settlement.
On November 27, 2007, a response in opposition in regards to the joint motion for judgment on the pleadings was filed by the Schottenfeld Qualified Associates LP. On November 28, 2007, a motion to strike the previously mentioned document was filed by Workstream, INC. As a response, the court denied the defendants’ motion to strike and entered its order on January 09, 2008. On March 13, 2008, a stipulation and agreement of settlement was entered. At the same time, a preliminary order was also entered. Lastly, a final judgment order was entered to approve the settlements on August 13, 2008 and the case is closed.
According to the Company’s FORM 10-Q for the quarterly period ended August 31, 2007, in December 2005, the plaintiffs filed an amended complaint which added additional plaintiffs and sought to elaborate on the allegations contained in the complaint. The defendant’s counsel filed a motion to dismiss the complaint, which was denied. Defendants have answered the amended complaint, denying its material allegations. The Court has certified the case as a class action and has approved notice to the class. Discovery is continuing.
The original Complaint alleges that throughout the relevant period, the defendants failed to disclose and misrepresented material adverse facts which were known to defendants or recklessly disregarded by them and which caused the defendants to issue materially false and misleading financial statements and projections which, among other things, caused the price of Workstream stock to trade at artificially inflated prices. The complaint alleges, for example, that defendants purposefully overstated and exaggerated Workstream's projected revenues and earnings, and other related measures of the company's financial condition, by improperly recognizing revenue for sales of software using inapplicable "percentage of completion" accounting methodologies.
On April 20, 2009, a Class Distribution Order granted the Claims Administrator's administrative determinations concerning the acceptance and rejection of the claims submitted by Class Members.