According to the D&O Diary post dated June 12, 2008, in a May 19, 2008 opinion, Judge Margaret M. Morrow of the United States District Court for the Central District of California granted the defendants’ motion to dismiss, but allowed the plaintiffs’ 45 days’ leave to amend. However, on August 8, 2008 plaintiffs filed a stipulation voluntarily dismissing the case with prejudice. The Judge adopted the stipulation on August 11, 2008 and the case was closed.
On December 3, 2007, the court granted the motion of Pinellas Park Retirement System, Plumbers Local No. 98 Defined Benefit Pension Fund, and the City of Pontiac for appointment as lead plaintiffs, and approved their selection of Coughlin Stoia Geller Rudman & Robbins, LLP as lead counsel. On January 23, 2008, the plaintiff filed a Consolidated Class Action Complaint and the defendants responded by filing a motion to dismiss the case.
As summarized by the Company’s SEC filing for the quarterly period ended September 30, 2007, on August 16, 2007, a securities class action lawsuit was filed in the United States District Court for the Central District of California (Case No. CV07-05364) against the Company’s Executive Vice President-Finance and Chief Financial Officer by putative plaintiff Vinod Patel. The Company was not named in the complaint. The complaint alleges a breach of fiduciary duties to the Company’s stockholders, as well as violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, during the period between October 27, 2005 and August 2, 2007. Specifically, the complaint alleges that the Company: (i) issued materially false and misleading statements regarding its finances, business and prospects; (ii) lacked requisite internal controls over lending practices; and (iii) misrepresented the extent of risk in the Company’s loans. The complaint seeks an unspecified amount of damages (including interest), reasonable costs and attorneys’ fees, as well as equitable, injunctive or other relief that the court may deem just and proper. The complaint has not been served. On October 19, 2007, putative class members Pinellas Park Retirement System (General Employees), Plumbers Local No. 98 Defined Benefit Pension Fund, and City of Pontiac General Employees’ Retirement System filed a Motion for Appointment as Lead Plaintiffs. In the Motion for Appointment as Lead Plaintiffs, the moving parties seek appointment of themselves as lead plaintiffs, and appointment of Coughlin Stoia Geller Rudman & Robbins LLP as lead counsel for the putative class. A hearing on the motion is set for November 19, 2007.