According to a press release dated January 29, 2008, ADPI is a leading provider of business services to multidisciplinary dental group practices in selected markets throughout the United States. Park Dental Group ("PDG") located in Minneapolis-St. Paul area, was one of the dental groups who had a long-term contract agreement with ADPI, and provided ADPI with significant revenue. Indeed, PDG accounted for 29 percent of ADPI's consolidated net revenue in 2006.
The business relationship between ADPI and PDG worked well for a number of years, but disputes arose in 2004. In February 2006, PDG sued ADPI and its subsidiary. On December 12, 2007, in connection with the lawsuit a jury found ADPI and/or its subsidiary liable for breach of contract, breach of implied covenants of good faith and fair dealing, breach of fiduciary duty, and tortious interference with contract and prospective advantage. The jury awarded PDG $88 million to compensate it for the injuries caused it by ADPI and its subsidiary and punitive damages of $42 million.
After the announcement of the jury verdict, ADPI's stock plummeted from $19.70 a share on December 11, 2007 to $14.34 on December 12, 2007, to $4.62 on December 13, 2007 after the announcement of the punitive damage award.
Specifically, the complaint charges ADPI and certain of its officers and directors with violations of the federal securities laws by issuing a series of material misrepresentations to the market during the Class Period thereby artificially inflating the price of ADPI shares. More specifically, the complaint alleges that ADPI financial statements throughout the Class Period were materially false and misleading because defendants knew that a substantial amount of ADPI's revenue and earnings were obtained by conduct, which was wrongful and tortuous as, found by a jury on December 12, 2007.
On May 28, 2008, a notice was filed by a certain individual in regards to the motion to consolidate cases and appoint lead plaintiff and lead counsel. Just as quickly, an order was entered by Judge Richard G. Stearns on May 29, 2008 granting a motion to consolidate cases and to appoint lead counsel and lead plaintiff. However, several motions were terminated in regards to the appointment of lead plaintiff and lead counsel on May 30, 2008. On June 02, 2008, an electronic notice to cancel hearing was filed. Lastly, an amended and consolidated complaint was filed on September 29, 2008.
On March 31, 2008, a motion to consolidate cases, to appoint lead plaintiff and counsel was filed by Operating Engineers Construction Industry and Miscellaneous Pension Fund.
On December 15, 2009, a settlement agreement by Operating Engineers Construction Industry and Miscellaneous Pension Fund was entered into the docket.
On December 22, 2009, an order of Preliminary Approval was entered in the docket.