The original Complaint charges that MBC and certain of its officers and directors violated federal securities laws. Specifically, the Complaint alleges that throughout the Class Period, Defendants made false and misleading statements inflating reported revenue from the Company's energy business segment.
After the close of the market on February 22, 2008, the Company announced that it would be filing a restatement of its first, second and third quarter 2007 financial statements to correct errors in MBC's revenue recognition practices in the energy business segment. The Company's February 22, 2008 disclosure revealed, inter alia, that the amount of the restatement might exceed the total earnings reported for the energy business segment for the first nine months of the 2007 fiscal year -- the business segment that accounted for almost 70 percent of the Company's total earnings for that period. Furthermore, the February 22, 2008 announcement disclosed that the Company was still evaluating whether it would need to restate earnings for fiscal year 2006 financial statements.
Following the issuance of the Company's February 22, 2008 press release, the price of the Company's common stock dropped from a closing price of $36.10 on February 22, 2008 to a closing price of $27.57 at the end of the next trading day.
On May 12, 2008, several motions on the appointment of lead plaintiffs, lead counsels and co-lead counsels as well as to consolidate cases were filed by certain individuals and groups. On June 6, 2008, the Court entered the Order consolidating several actions under In re Michael Baker Corp. Securities Litigation, Civil Action No. 08-370. On June 26, 2008, the Court entered the Order appointing Michael Baker Institutional Investors Group as the presumptive lead plaintiff. According to the Order, Michael Baker Institutional Investors Group consists of the Southeast Pennsylvania Transit Authority (“SEPTA”) and the City of Tallahassee Retirement System. On October 14, 2008, the plaintiffs filed a Consolidated Class Action Complaint was filed. On December 15, 2008, the defendants filed a motion to dismiss the Consolidated Class Action Complaint.
On April 3, 2009, the lead plaintiffs filed an Unopposed Motion for Preliminary Approval of Settlement, Preliminary Certification of the Class and Approval of Notice to the Class. According to the Stipulation of Settlement filed with the motion, the proposed settlement is in the amount of $4,500,000 in cash. On May 14, 2009, Judge Judge Joy Flowers Conti granted the motion for preliminary approval of the settlement and set the Settlement Fairness Hearing for September 11, 2009.
On September 11, 2009, Judge Joy Flowers Conti granted the Motion for Final Approval of Settlement and Plan of Allocation and the Motion for Attorney Fees Award of Attorneys' Fees and Reimbursement of Expenses.