The Settlement Approval Hearing was held on June 22, 2007. According to the Order and Final Judgment issued by Patti B. Saris, the settlement and the Plan of Allocation are approved. Further, Plaintiffs’ Counsel are awarded 20% of the Gross Settlement Fund in fees and $1,110,634.40 in reimbursement of expenses. The Court approved payment of $290,623.13 from the settlement fund to the Claims Administrator. The Court also approved the award of $25,000 to the plaintiff representatives.
On March 28, 2007, the plaintiffs filed a motion for settlement. According to the Stipulation and Agreement of Settlement, the settlement fund is in the amount of $60 million for the benefit of all those who purchased the common stock of L&H on the NASDAQ Stock Market or purchased L&H call options or sold L&H put options on any U.S. based options exchange during the period August 19, 1998 through November 9, 2000.
On November 21, 2003, a First Amended Complaint was filed. On February 25, 2004, a Second Amended Class Action Complaint was filed. On March 22, 2004, another Second Amended Class Action Complaint was filed against all defendants. On April 2, 2004, defendant Dexia, S.A. and defendant Dexia Bank Belgium each filed motions to dismiss the Second Amended Class Action Complaint. On February 9, 2005, U.S. District Court Judge Patti B. Saris denied the motion to dismiss filed by defendant Dexia Bank Belgium while the motion to dismiss filed by defendant Dexia, S.A. was later terminated. On January 13, 2006, defendant Dexia, S.A. filed a renewed motion to dismiss the Second Amended Class Action Complaint. On January 27, 2006, the plaintiffs filed a Notice of Voluntary Dismissal. According to the Notice, the plaintiffs voluntarily dismiss their claims against Dexia S.A. in the above-captioned action without prejudice. On February 2, 2006, Judge Patti B. Saris issued the electronic Order finding as moot the renewed motion to dismiss the Second Amended Class Action Complaint. On February 22, 2006, and then later March 14, 2006, a Third Amended Class Action Complaint was filed against Dexia Bank Belgium. On April 27, 2006, the defendant filed a motion to dismiss the Third Amended Class Action Complaint. On August 8, 2006, Judge Patti B. Saris issued the Memorandum and Order denying the defendant's motion to dismiss the Third Amended Class Action Complaint. On September 22, 2006, the plaintiffs filed a motion for class certification. On November 2, 2006, the plaintiffs filed a Fourth Amended Class Action Complaint. On November 16, 2006, the defendant filed a motion to dismiss the plaintiffs’ insider trading claim.
As summarized by a law firm’s website, on August 19, 2003, a complaint was filed against Dexia Bank Belgium (“Dexia”) (f/k/a Artesia Banking Corp., S.A. (“Artesia”)) based on the role Artesia, acquired by Dexia in 2001, played in the fraud at Lernout & Hauspie Speech Products, N.V. (“L&H”). This action, entitled Quaak v. Dexia Bank Belgium, C.A. No. 03-11566 (D. Mass.)(the “Dexia Action”), is related to In re Lernout & Hauspie Sec. Litig., C.A. No. 00-CV-11589 (D. Mass.) (the “L&H Action”) in which there have been three partial settlements with KPMG, the Directors and Flanders Language Valley Fund C.V.A. (“FLV”) totaling $120,520,000.
The Complaint in this action alleges that Artesia was a key participant in the Language Development Company (“LDC”) fraud at L&H and that L&H could not have perpetrated this massive accounting fraud without Artesia’s knowledge and collaboration. As alleged, Artesia helped to set up and finance the LDCs, and provided L&H with loans, through its principal officers, which L&H then used to book fictitious revenue from these shell companies. Specifically, Artesia issued 3 separate loans in 1998 and 1999, totaling more than $20 million, which were used to artificially inflate L&H’s revenues as part of the strategic partner aspect of L&H’s fraudulent scheme. At its core, L&H booked as revenue the cash it obtained from Artesia’s loans, even though these loans would ultimately have to be repaid. In other words, L&H, with Artesia’s full knowledge, was essentially transferring cash from one pocket to another, and booking that transfer as revenue.