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Case Status:    SETTLED
On or around 10/19/2009 (Date of order of final judgment)

Filing Date: May 09, 2006

According to a news article published June 2, 2008, Escala has entered into a settlement agreement for both the class action and derivative cases pending against it. The proposed settlement of the class action litigation provides for the Company to contribute an aggregate of $6 million in cash and 4 million newly issued shares of its stock (subject to increase under certain circumstances) to a settlement fund for the benefit of the class. A substantial portion of the cash contribution will be funded by insurers. If approved by the Court, all claims against the Company and its current and former officers and directors will be dismissed with prejudice and without any admission of liability or wrongdoing.

On June 1, 2007, a Second Consolidated complaint was filed. In addition, new motions to dismiss were re-filed on July 5, 2007 and answers were filed on July 16, 2007. However, on October 02, 2007, the judge denied defendants' second motions to dismiss. At the same time, a motion to certify class in regards to the appointment of class representative and class counsel was also filed.

According to a press release date May 30, 2008, Escala Group (ESCL.PK), a global collectibles company in stamps, coins, precious metals trading, and art and antiques, announced that it has entered into agreements to settle the securities class action lawsuit and shareholder derivative action commenced against the Company and certain of its current and former officers and directors in May 2006. As part of the settlement of the derivative action, the Company will recover $5.50 million from insurers on behalf of certain of the named defendants on both proceedings. The Company has also agreed to adopt certain corporate governance policies and procedures, and to pay all court approved attorneys' fees, up to a maximum of $925,000, together with approved expenses not to exceed $70,000. The Company's insurer will fund $475,000 of these amounts. The proposed settlement of the class action litigation provides for the Company to contribute an aggregate of $6 million in cash and 4 million newly issued shares of its stock (subject to increase under certain circumstances) to a settlement fund for the benefit of the class. A substantial portion of the cash contribution will be funded by insurers. If approved by the Court, all claims against the Company and its current and former officers and directors will be dismissed with prejudice and without any admission of liability or wrongdoing.

On July 20, 2006 the judge approved lead plaintiff Capitalia and Baltimore's motion for appointment and approval of lead counsel. Plaintiffs filed a Consolidated Complaint on October 13, 2006. Motions to dismiss were filed by defendants on December 18, 2006. On April 20, 2007 several individuals were dismissed from the case on the grounds that the complaint did not sufficiently allege scienter or personal jurisdiction. The plaintiffs were granted leave to amend complaint deficiencies with regards to one individual. They were also successful in having the discovery stay lifted against Escala.

According to a press release dated May 9, 2006, the Complaint asserts violations of the federal securities laws and alleges that defendants made material misstatements and omitted information regarding the true nature of Escala's business and sales activities. Escala is a major distributor of collectibles including postage stamps, and one of its major customers and joint venturers is its majority shareholder, Afinsa Bienes Tangibles SA ("Afinsa").

The complaint alleges that on or around May 9, 2006 it was publicly reported that Spanish police had made arrests and raided the offices of Afinsa. The operation forms part of a joint investigation launched by the National Court, tax authorities, financial crime prosecutors and the National Police over an alleged pyramid-type scheme based on overpriced stamps and other collectibles. The prosecutor's office said in a statement that Spanish authorities are conducting more than 20 searches at company offices and private residences. The prosecutor's office also said it plans to conduct "several arrests" as part of a lawsuit based on charges ranging from tax evasion and money laundering to criminal insolvency and falsification of documents. The operation comes after Barron's magazine extensively reported questionable practices at Afinsa, which purportedly operates a "no-lose" stamp-sales program for investors in Spain and Portugal.

The complaint further alleges that as a result of these revelations, given the high level of the integration between Afinsa's and Escala's business operations, ESCL stock fell more than 50% in heavy trading on May 9, 2006.

On September 22, 2008 the court preliminarily approved the settlement and set a fairness hearing for December 3, 2008.

On November 6, 2008, a stipulation of settlement was entered by the defendants. The judge entered separate orders approving the final settlement and plan of allocation of funds and awarded attorneys' fees and expenses of $3.25 million and $250,000, respectively.

On December 3, 2008 the judge entered a Final Order approving the settlement, granting counsel's request for fees and expenses, and closing the case.

On October 13, 2009, an order authorizing disbursement of the net settlement fund was entered into the court record. Rust was authorized to discard paper or hard copies of Proofs of Claim and supporting documents not less than one (1) year after distribution of the Net Settlement Fund to the eligible claimants and electronic copies of the same not less than three (3) years after distribution of the Net Settlement Fund to the eligible claimants.

On October 19, 2009, another order authorizing disbursement of the net settlement fund was entered into the out record highlighting most of the same points.

COMPANY INFORMATION:

Sector: Services
Industry: Business Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: ESCL
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 06-CV-03518
JUDGE: Hon. Alvin Hellerstein
DATE FILED: 05/09/2006
CLASS PERIOD START: 09/05/2003
CLASS PERIOD END: 05/08/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Ann D. White Law Offices PC
    101 Greenwood Avenue, Fifth Floor, Ann D. White Law Offices PC, PA 19046
    1.866.389.0274 215-481-0271 · awhite@awhitelaw.com
  2. Berman DeValerio Pease Tabacco Burt & Pucillo (MA)
    One Liberty Square, Berman DeValerio Pease Tabacco Burt & Pucillo (MA), MA 02109
    617.542.8300 ·
  3. Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC)
    1100 New York Avenue, N.W., Suite 500, West Tower, Cohen, Milstein, Hausfeld & Toll, P.L.L.C. (Washington, DC), DC 20005
    202.408.4600 202.408.4699 · lawinfo@cmht.com
  4. Federman & Sherwood (Oklahoma City)
    120 North Robinson, Suite 2720, Federman & Sherwood (Oklahoma City), OK 73102
    405-235-1560 · wfederman@aol.com
  5. Howard G. Smith, Attorney at Law
    3070 Bristol Pike, Suite 112, Howard G. Smith, Attorney at Law, PA 19020
    215.638.4847 215.638-4867 ·
  6. Kahn Gauthier Swick, LLC (New Orleans)
    650 Poydras St. Suite 2150, Kahn Gauthier Swick, LLC (New Orleans), LA 70130
    504.455.1400 · lewis.kahn@kglg.com
  7. Law Offices of Charles J. Piven, P.A.
    World Trade Center-Baltimore,401 East Pratt Suite 2525, Law Offices of Charles J. Piven, P.A., MD 21202
    410.332.0030 · pivenlaw@erols.com
  8. Law Offices of Leo W. Desmond
    2161 Palm Beach Lakes Blvd., Suite 204, Law Offices of Leo W. Desmond, FL 33409
    888.337.6663 · Info@SecuritiesAttorney.com
  9. Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    58 South Service Road, Suite 200, Lerach Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 ·
  10. Murray, Frank & Sailer LLP
    275 Madison Ave 34th Flr, Murray, Frank & Sailer LLP, NY 10016
    212.682.1818 212.682.1892 · email@murrayfrank.com
  11. Paskowitz & Associates
    60 East 42nd Street, 46th Floor, Paskowitz & Associates, NY 10165
    212.685.0969 212.685.2306 · classattorney@aol.com
  12. Pomerantz LLP (New York)
    600 Third Avenue, Pomerantz LLP (New York), NY 10016
    212.661.1100 212.661.8665 · info@pomerantzlaw.com/
  13. Roy Jacobs & Associates (New York)
    350 Fifth Avenue Suite 3000 , Roy Jacobs & Associates (New York), NY 10118
    · classattorney@pipeline.com
  14. Schatz & Nobel, P.C.
    330 Main Street, Schatz & Nobel, P.C., CT 06106
    800.797.5499 860.493.6290 · sn06106@AOL.com
  15. Schiffrin & Barroway LLP
    3 Bala Plaza E, Schiffrin & Barroway LLP, PA 19004
    610.667.7706 610.667.7056 · info@sbclasslaw.com
  16. Stull, Stull & Brody (New York)
    6 East 45th Street, Stull, Stull & Brody (New York), NY 10017
    310.209.2468 310.209.2087 · SSBNY@aol.com
  17. The Rosen Law Firm, P.A. (New York)
    350 Fifth Avenue, Suite 5508, The Rosen Law Firm, P.A. (New York), NY 10118
    212.686.1060 212.202.3827 · lrosen@rosenlegal.com
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 06-CV-03518
JUDGE: Hon. Alvin Hellerstein
DATE FILED: 06/01/2007
CLASS PERIOD START: 09/05/2003
CLASS PERIOD END: 05/08/2006
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Kaplan Fox & Kilsheimer, LLP (former New York, NY)
    805 Third Avenue, 22nd Floor, Kaplan Fox & Kilsheimer, LLP (former New York, NY), NY 10022
    212.687.1980 212.687.7714 · info@kaplanfox.com
  2. Labaton Sucharow & Rudoff LLP
    100 Park Avenue, 12th Floor, Labaton Sucharow & Rudoff LLP, NY 10017
    212.907.0700 212.818.0477 · info@labaton.com
No Document Title Filing Date
No Document Title Filing Date