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Case Status:    SETTLED
On or around 12/05/2011 (Date of order of final judgment)

Filing Date: May 28, 2008

The complaint charges NexCen and certain of its officers and directors with violations of the Securities Exchange Act of 1934. NexCen operates as a brand management and franchising company in the United States and internationally. The Company owns, licenses, franchises, and markets a portfolio of brands, including Bill Blass, Waverly, The Athlete’s Foot, Shoebox New York, Great American Cookies, MaggieMoo’s, Marble Slab Creamery, Pretzel Time, and Pretzelmaker.

The complaint alleges that, during the Class Period, defendants issued a series of materially false and misleading statements that misrepresented and failed to disclose: (i) that the Company was able to finance a portion of the Great American Cookies acquisition by agreeing to an accelerated-redemption feature, which would force the Company to pay back half of its borrowing by a certain date; (ii) that the Company was unable to comply with this accelerated-redemption feature, which would reduce the amount of cash available to the Company; (iii) that the Company had no reasonable basis for its earnings guidance for fiscal 2008; and (iv) as a result of the foregoing, the Company’s ability to continue as a going concern was in serious doubt.

Then, on May 19, 2008, the Company announced that it “expects to amend the company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007.” The Company also stated that its prior financial guidance for 2008 “is no longer applicable.” Moreover, the Company revealed that it “is actively exploring all strategic alternatives to enhance its liquidity, including potential capital market transactions, the possible sale of one or more of its businesses, and discussions with the company’s lender.” Upon this news, shares of the Company’s stock fell $1.95 per share, or 77%, to close at $0.58 per share, on heavy trading volume.

According to the Company’s FORM 10–K/A For The Fiscal Year Ended December 31, 2007, a total of four putative securities class actions have been filed in the United States District Court for Southern District of New York against NexCen Brands and certain of our former officers and current director for alleged violations of the federal securities laws. These actions are captioned: Mark Gray v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren & David Meister, No. 08-CV-4906 (filed on May 28, 2008); Ghiath Hammoud v. NexCen Brands, Inc., Robert W. D’Loren, & David B. Meister, No. 08-CV-5063 (filed on June 3, 2008); Ronald Doty v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren & David Meister, No. 08-CV-5172 (filed on June 5, 2008); and Frank B. Falkenstein v. NexCen Brands, Inc., David S. Oros, Robert W. D’Loren, David Meister, No. 08-CV-6126 (filed on July 3, 2008).

Although the formulations of the allegations differ slightly, plaintiffs allege that defendants violated federal securities laws by misleading investors in the Company’s public filings and statements. The complaints assert claims under Section 10(b) of the Securities Exchange Act of 1934 and SEC Rule 10b-5, and also assert that the individual defendants are liable as controlling persons under Section 20(a) of the Exchange Act. Plaintiffs seek damages and attorneys’ fees and costs.

On March 5, 2009, the court consolidated the actions and appointed Vincent Granatelli as lead plaintiff and Cohen, Milstein, Hausfeld & Toll, P.L.L.C. as lead counsel. Under the Stipulation and Order entered by the Court on June 19, 2009, the plaintiff shall file an Amended Consolidated Complaint on or before August 24, 2009 and the Company shall file a responsive pleading on or before October 8, 2009, with any opposition and reply briefing due on November 23, 2009 and December 23, 2009, respectively.

On August 24, 2009, the lead plaintiff filed a Consolidated Amended Class Action Complaint. On October 8, 2009, the defendants responded by filing several motions to dismiss the Consolidated Amended Class Action Complaint. The motions were denied as moot on February 2, 2011. The parties are scheduled to meet with the judge on March 4, 2011, to decide how to proceed with the case.

On June 10, 2011, a motion for certification of a settlement class and preliminary approval of the class action settlement was filed. On July 5, 2011, the settlement of $4 million in cash was preliminarily approved. The settlement will be paid for by defendants' directors'-and officers' liability insurer. The final settlement was approved on December 5, 2011.

COMPANY INFORMATION:

Sector: Financial
Industry: Investment Services
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: NEXC
Company Market: NASDAQ
Market Status: Public (Listed)

About the Company & Securities Data


"Company" information provides the industry and sector classification and headquarters state for the primary company-defendant in the litigation. In general, "Securities" information provides the ticker symbol, market, and market status for the underlying securities at issue in the litigation.

In most cases, the primary company-defendant actually issued the securities that are the subject of the litigation, and the securities information and company information relate to the same entity. In a small subset of cases, however, the primary company-defendant is not the issuer (for example, cases against third party brokers/dealers), and the securities information and company information do not relate to the same entity.
COURT: S.D. New York
DOCKET #: 08-CV-04906
JUDGE: Hon. Miriam Goldman Cedarbaum
DATE FILED: 05/28/2008
CLASS PERIOD START: 05/10/2007
CLASS PERIOD END: 05/19/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (Melville)
    200 Broadhollow, Suite 406, Coughlin Stoia Geller Rudman & Robbins LLP (Melville), NY 11747
    631.367.7100 631.367.1173 · info@csgrr.com/
  2. Dyer & Berens LLP (former)
    682 Grant Street, Dyer & Berens LLP (former), CO 80203-3507
    303.861.1764 303.861.1764 · contact@dyerberens.com
  3. Holzer Holzer & Fistel, LLC (former Atlanta)
    1117 Perimeter Center West, Suite E-107, Holzer Holzer & Fistel, LLC (former Atlanta), GA 30338
    770.392.0090 770.392.0090 ·
No Document Title Filing Date
COURT: S.D. New York
DOCKET #: 08-CV-04906
JUDGE: Hon. Miriam Goldman Cedarbaum
DATE FILED: 08/24/2009
CLASS PERIOD START: 03/13/2007
CLASS PERIOD END: 12/19/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Cohen Milstein Sellers & Toll PLLC (New York)
    88 Pine Street, 14th Floor, Cohen Milstein Sellers & Toll PLLC (New York), NY 10022
    212.838.7797 212.838.7797 ·
  2. Cohen Milstein Sellers & Toll PLLC (Washington DC)
    1100 New York Avenue, N.W., Suite 500, West Tower, Cohen Milstein Sellers & Toll PLLC (Washington DC), DC 20005
    202.408.4600 202.408.4600 ·
No Document Title Filing Date
No Document Title Filing Date