ShoreTel, Inc. is a telecommunications vendor providing unified communications for business.
According to a press release dated January 16, 2008, ShoreTel, certain of its officers and directors, and the Company's underwriters are charged with including, or allowing the inclusion of, materially false and misleading statements in the Registration Statement and Prospectus issued in connection with the IPO, in violation of the Securities Act of 1933.
Specifically, the Complaint alleges that following ShoreTel's July 3, 2007 IPO -- which raised gross proceeds of at least $86.3075 million -- investors learned the truth about the Company on January 7, 2008, including that the problems which existed at the time of the IPO would result in extremely disappointing results for the third quarter of fiscal 2008 (the period ended December 31, 2007), including much lower than expected revenues and higher than expected costs and expenses. At that time, Defendants first belatedly revealed that sales to new customers were substantially lower than expected, and that sales to existing customers was not sufficient to offset these declines. In addition, by this time, it became obvious to investors that the Company did not maintain adequate internal controls, and that a proper due diligence investigation into the Company, by the Underwriters, was not properly carried out prior to the Offering.
On this news, on January 7, 2008, over 6.0 million shares of ShoreTel traded -- over 20 times average daily trading volume -- and Company shares plummeted -- falling over 50% to close at $6.02 per share.
On April 25, 2008, Judge Charles R. Breyer granted the motion to appoint Loren Swanson and Art Landesman as lead Plaintiffs and approved Kahn Gauthier Swick, LLP as lead Counsel and Hagens Berman Sobol Shapiro LLP as liaison Counsel. On June 27, 2008, the lead Plaintiffs filed a Consolidated Amended Class Action Complaint. The Defendants responded by filing motions to dismiss on August 26, 2008. On February 2, 2009, Judge Breyer granted the motions to dismiss with leave to amend. On March 2, 2009, the lead Plaintiffs filed a Second Consolidated Amended Class Action Complaint. On June 1, 2009, the Defendants filed a motion to dismiss, which was granted in part and denied in part on August 19, 2009.
On June 4, 2010, the lead Plaintiffs filed a Stipulation of Dismissal of Defendant Lehman Brothers Inc. and a motion for preliminary approval of a settlement. On June 21, 2010, Judge Breyer signed the Order dismissing defendant Lehman Brothers Inc. with prejudice. On July 2, 2010, Judge Breyer granted the motion for settlement.
According to a press release dated July 16, 2010, pursuant to an Order of the United States District Court for the Northern District of California, that a hearing will be held on October 15, 2010, at 10:00 a.m., before the Honorable Charles R. Breyer at the United States Courthouse, 450 Golden Gate Ave., Courtroom 8, 19th Floor, San Francisco, CA 94102, for the purpose of determining (1) whether the proposed settlement for the sum of $3,000,000 in cash should be approved by the Court as fair, reasonable and adequate; (2) whether, after the hearing, this Litigation should be dismissed with prejudice pursuant to the terms and conditions set forth in the Stipulation of Settlement dated as of June 4, 2010; (3) whether the Plan of Allocation is fair, reasonable, and adequate and should be approved; and (4) whether the application of lead Counsel for the payment of attorneys’ fees and reimbursement of expenses incurred in this Litigation should be approved.
On October 18, 2010, the Court issued a Final Judgment and Order dismissing this suit in its entirety with prejudice, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.
