The original Complaint alleges that Jarden and its CEO violated the federal securities laws in connection with a scheme to convert hundreds of millions of dollars of convertible stock to common stock, and earn defendant, the company’s CEO, tens of millions of dollars in restricted stock compensation. Specifically, it is asserted that the company’s CEO misrepresented the business situation and potential of the Holmes Group, Inc. when that company was acquired by Jarden at the beginning of the Class Period. This caused the stock to rise substantially, triggering the personal benefits to the CEO. On January 11, 2006 Jarden announced that Holmes' profit margins and product mix were not what the market had been led to expect. On this news, Jarden's stock fell substantially.
As summarized by the Company’s FORM 10-Q for the quarterly period ended September 30, 2008, in January and February 2006, purported class action lawsuits were filed in the Federal District Court for the Southern District of New York against the Company and certain Company officers alleging violations of the federal securities laws. The actions were filed on behalf of purchasers of the Company’s common stock during the period from June 29, 2005 (the date the Company announced the signing of the agreement to acquire Holmes) through January 11, 2006. The complaints, which are substantially similar to one another, allege, among other things, that the plaintiffs were injured by reason of certain allegedly false and misleading statements made by the Company relating to the expected benefits of the THG Acquisition. Joint lead plaintiffs were appointed on June 9, 2006. The lead plaintiffs filed an amended consolidated complaint on August 25, 2006 naming the Company, the Company’s Consumer Solutions segment and certain officers of the Company as defendants (collectively “Defendants”) and containing substantially the same allegations as in the initial complaints. On October 20, 2006, Defendants filed a motion to dismiss the consolidated amended complaint. On May 31, 2007, the Court issued an opinion denying Defendants’ motion to dismiss. On July 3, 2007, Defendants filed a Motion for Reconsideration of the order denying Defendants’ motion to dismiss. On September 5, 2007, the court granted Defendants’ motion for reconsideration, but reaffirmed its May 31, 2007 denial of Defendants’ motion to dismiss. Defendants answered the amended consolidated complaint on July 10, 2007. On September 10, 2007, Plaintiffs moved for class certification. On March 6, 2008, the Court issued an opinion certifying a class comprised of purchasers of the Company’s common stock during the period from June 29, 2005 through January 11, 2006.
According to the Company’s FORM 10-K for the fiscal year ended December 31, 2008, pursuant to the settlement reached on November 20, 2008, which is subject to court approval, the Company’s insurance carriers will pay $8 million into a settlement fund and the Defendants will obtain full releases from all claims in connection with the litigation. The plaintiffs’ counsel will seek a portion of the settlement fund to cover attorneys’ fees and expenses. On January 28, 2009, the Court preliminarily approved the settlement and scheduled a final settlement hearing for May 18, 2009.
On May 18, 2009, the Court approved the settlement and the plan of allocation and awarded attorney's fees and expenses. The action was dismissed with prejudice.