The Complaint charges defendants Andrx Corp. and the Chief Executive Officer of the Company with violations of the Securities Exchange Act of 1934. The Complaint alleges that defendants were aware of and failed to disclose the fact that their manufacturing facilities did not comply with all applicable good manufacturing practices (``cGMP'') regulations and that Andrx was facing serious regulatory sanctions as a result of its cGMP violations including a sanction that would preclude the Food and Drug Administration (``FDA'') approval of Andrx's pending and future drug applications. On September 6, 2005, defendants shocked the market when they announced that the FDA had recently placed a halt on approving Andrx's drug applications. In response to this press release, Andrx stock dropped from a closing price of $17.94 on September 5, 2005 to $14.89 on September 6, 2005 on heavy trading volume.
Pioneer Investment Management SGR SPA moved to be appointed lead plaintiff and for approval of its selection of Lead and Liaison Counsel on December 12, 2005. By Order dated January 17, 2006, the Court appointed Pioneer to serve as lead plaintiff, and appointed the law firm of Murray, Frank & Sailer LLP to serve as lead counsel, and the law firm of Vianale & Vianale LLP to serve as liaison counsel.
Pioneer filed an amended class action complaint on June 23, 2006. Defendants filed a motion to dismiss, which was granted in part and denied in part by Order dated December 7, 2006. Thereafter, Defendants answered the Complaint and also asserted seventeen affirmative defenses on December 22, 2006.
On April 13, 2007, Pioneer moved to withdraw as lead plaintiff and Robert Marley moved to substitute himself as lead plaintiff. The Court granted Mr. Marley's motion and appointed him Lead Plaintiff by Order dated April 17, 2007. Subsequently, on April 18, 2007, Lead Plaintiff filed a motion to certify a class consisting of all Persons who purchased the common stock of Andrx between March 9, 2005 and September 5, 2005, inclusive, and who were damaged thereby, and proposing Lead Plaintiff and additional Plaintiff Dr. David Plotkin as class representatives. After briefing on the class certification motion was completed (which included briefing on Lead Plaintiff's motion to strike Defendants' expert witness), the Court heard oral argument on the motion on September 14, 2007. Around this time, the Parties agreed to engage in mediation. The Parties, through their counsel, attended a mediation before the Honorable Nicholas Politan (Ret.) on October 2, 2007. As a result of a series of full and frank discussions, the Parties reached an agreement in principle to settle the Action.
On December 7, 2007, a Settlement Agreement was filed, establishing a settlement fund in the amount of $8,000,000 in cash. On December 10, 2007, the Court preliminarily approved the settlement and certified the class. On April 4, 2008, the Court granted the motion for settlement approval, plan of allocation and motion for attorney fees and reimbursement of expenses.