The original complaint alleges defendants Technical Olympic USA, Inc. (TOUSA) and certain of its present and former officers violated the Securities Exchange Act of 1934. During the Class Period, defendants materially misled the investing public, thereby inflating the price of TOUSA's common stock, by publicly issuing false and misleading statements and omitting to disclose material facts necessary to make defendants' statements not false and misleading. Said statements and omissions were materially false and misleading in that they failed to disclose material adverse information and misrepresented the truth about the Company, its business and operations.
As summarized by the Company’s Form 10-K for the fiscal year ended December 31, 2007, beginning in December 2006, various stockholder plaintiffs brought lawsuits seeking class action status in the U.S. District Court for the Southern District of Florida. At a hearing held March 29, 2007, the Court consolidated the actions and heard arguments on the appointment of lead plaintiff and counsel. On September 7, 2007, the Court appointed Diamondback Capital Management, LLC as the lead plaintiff and approved Diamondback’s selection of counsel. Pursuant to a scheduling order, the lead plaintiff filed a Consolidated Complaint on November 2, 2007. … On January 30, 2008, TOUSA filed a Motion to Dismiss Plaintiffs’ Consolidated Complaint. TOUSA moved to dismiss plaintiffs’ claims on the grounds that plaintiffs: a) could not establish materially false or misleading statements or omissions; b) could not establish loss causation; c) failed to plead with particularity facts giving rise to a strong inference of scienter; and d) lacked standing to pursue a Section 11 claim. Many of the other defendants also filed motions to dismiss and/or signed on to TOUSA’s Motion to Dismiss. On February 4, 2008, TOUSA filed a Notice of Suggestion of Bankruptcy notifying the Court that TOUSA filed for bankruptcy on January 29, 2008. On February 5, 2008, the Court entered an order staying the action as to TOUSA pursuant to Section 362 of the United States Bankruptcy Code. The action continues with respect to defendants other than TOUSA. On April 30, 2008, lead plaintiff Diamondback Capital Management moved to withdraw as lead plaintiff. On May 22, 2008, the Court entered an order: granting Diamondback Capital Management’s motion to withdraw as lead plaintiff; establishing a procedure pursuant to which a new lead plaintiff would be appointed; extending the time for plaintiffs to respond to the motions to dismiss until a new lead plaintiff is selected; and acknowledging that the Court may need to set a time for the filing of an amended complaint, if requested by the new lead plaintiff. On June 6, 2008, two prospective lead plaintiffs filed motions to be appointed the new lead plaintiff. On July 15, 2008, the Court entered an Order appointing the Bricklayers & Trowel Trades International Pension Fund as the new lead plaintiff. The Court further ordered that, within 15 days of the entry of the Order, the new plaintiff must either respond to the previously filed Motions to Dismiss, or file a notice of intent to file an amended complaint. On July 30, 2008, the new plaintiff filed a notice of intent to file an amended complaint. On July 31, 2008, following the notice of intent to file an amended complaint, the Court denied as moot, without prejudice, the defendants’ previously filed motion to dismiss the consolidated complaint. Under the current schedule set by the Court, the plaintiff must file its amended complaint by August 29, 2008.
On September 19, 2008, the lead plaintiff filed a Consolidated Amended Class Action Complaint. On November 21, 2008 and March 2, 2009, the defendants filed various motions to dismiss the Consolidated Amended Class Action Complaint.
On September 21, 2009, the Court granted the various Defendants’ motions to dismiss the Amended Class Action Complaint and granted Plaintiff leave to file a Second Amended Complaint. On October 21, 2009, Plaintiff filed a Notice of Intent Not to Amend and requested that the Court enter judgment so that an appeal may be taken.
On October 23, 2009, it was Ordered that Judgment is hereby entered on behalf of Defendants David J. Keller, Randy L. Kolter, Antonio B. Mon and Tommy L. McAden and against Lead Plaintiff Bricklayers & Trowel Trades International Pension Fund and Plaintiff shall take nothing from Defendants. On October 29, 2009, the plaintiffs filed a Notice of Appeal in the Eleventh Circuit Court of Appeals. On November 12, 2009, the defendants filed a Notice of Cross Appeal.
On March 24, 2011, the United States Court of Appeals for the Eleventh Circuit Affirmed the judgment of the lower Court. The conclusion found the amended complaint failed to sufficiently allege defendants were severely reckless by not being aware their statements could be perceived as false or misleading to the extent required, as defined above, for severe recklessness.
On October 29, 2009, the Lead Plaintiffs filed a Notice of Appeal with the United States Court of Appeals for the Eleventh Circuit from the opinion and order entered September 21, 2009, granting the Defendants’ Motions to Dismiss.
On March 24, 2010, the Eleventh Circuit Court of Appeals issued an Order granted an appellee’s motion to dismiss the appeal as to him in part, while allowing the rest of the appeal and cross-appeal to continue unabated. Additionally, the Court found the appellee’s alternative motion to adopt relevant portions of the brief as moot.
On March 24, 2011, the United States Court of Appeals for the Eleventh Circuit issued a mandate affirming the United States District Court’s judgment.