According to a press release dated February 20, 2008, the complaint charges that Opnext and certain of its present and former officers, directors, and control persons violated Sections 11 and 15 of the Securities Act of 1933 by issuing a materially inaccurate Registration Statement and Prospectus (collectively the "Registration Statement") in connection with the Company's IPO.
According to the Complaint, on or about February 14, 2007 the Opnext commenced its IPO priced at $15.00 per share for over 16 million shares of stock. The Complaint asserts that Opnext's Registration Statement was materially false because: (i) the Company's reported net income for the quarter and six months ended December 31, 2007 was overstated; and (ii) the Company's reported net loss for the fiscal year ended March 31, 2006 was understated.
The Complaint further alleges that on February 13, 2008 the Company announced, among other things, the Company's previously issued financial statements could no longer be relied upon and that it had to restate them. As a result of these adverse disclosures, Opnext's stock price dropped, damaging investors.
As summarized by the Company’s Form 10-Q for the quarterly period ended September 30, 2009, on February 20, 2008, a putative class action captioned Bixler v. Opnext, Inc., et al. (D.N.J. Civil Action # 3:08-cv-00920) was filed in the United States District Court for the District of New Jersey against Opnext and certain of Opnext’s present and former directors and officers (the “Individual Defendants”), alleging, inter alia, that the registration statement and prospectus issued in connection with Opnext’s initial public offering contained material misrepresentations in violation of federal securities laws. On March 7 and March 20, 2008, two additional putative class actions were filed in the District of New Jersey with similar allegations. Those complaints, captioned Coleman v. Opnext, Inc., et al. (D.N.J. Civil Action # 3:08-cv-01222) and Johnson v. Opnext, Inc., et al. (D.N.J. Civil Action No. 3:08-cv-01451), respectively, named Opnext, the Individual Defendants, Opnext’s independent auditor and the underwriters of the IPO as defendants.
On May 22, 2008, the court issued an order consolidating Bixler, Coleman, and Johnson under Civil Action No. 08-920 (JAP) and, on July 30, 2008, a consolidated complaint (the “Consolidated Complaint”) was filed on behalf of all persons who purchased Opnext common stock on or before February 13, 2008, pursuant to or traceable to Opnext’s initial public offering on February 14, 2007. On October 21, 2008, the defendants in the consolidated action, which include Opnext and the Individual Defendants, responded to the Consolidated Complaint, denying the material allegations and asserting various affirmative defenses. On November 6, 2008, Opnext’s auditor was voluntarily dismissed from the action by plaintiff without prejudice.
On September 8, 2009, the parties, including Opnext and the Individual Defendants, entered into a Stipulation and Agreement of Settlement (the “Settlement”), which the Court preliminarily approved on October 6, 2009.
Under the terms of the Settlement, which is subject to final approval by the Court, Opnext’s insurer will pay $2,000,000 to a settlement fund that will be used to pay eligible claimants and plaintiffs’ counsel. Moreover, upon final approval of the Settlement by the Court, plaintiff will dismiss the consolidated action with prejudice, and all defendants (including Opnext and the Individual Defendants) will be released from any claims that were brought or could have been brought in the consolidated action. Notice of the Settlement will be mailed to Opnext’s present and former shareholders who are members of the Settlement class, and they will have the opportunity to submit claims, object to the Settlement and/or opt-out of it. The Court has scheduled a final hearing for January 6, 2010, after which the Court will decide whether to grant final approval of the Settlement.
On January 6, 2010, Judge Joel A. Pisano approved the settlement, approved the plan of allocation and awarded attorneys’ fees and expenses. The action was dismissed with prejudice.