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Case Status:    SETTLED
On or around 03/22/2011 (Date of order of final judgment)

Filing Date: May 30, 2008

The original complaint charges TomoTherapy and certain of its officers and directors with violations of the Securities Exchange Act of 1934. TomoTherapy develops, markets, and sells the Hi-Art system, a radiation therapy system for the treatment of various types of cancers. Specifically, the complaint alleges that during the Class Period defendants issued a series of materially false and misleading statements regarding TomoTherapy’s revenues and net income. Specifically, the complaint alleges that on February 13, 2008, the Company reported that for fiscal 2008 it “anticipates revenue of $290 million to $310 million and net income per share in the range of $0.34 to $0.39 per diluted share.” Moreover, the Company touted a strong second half 2008 due to “strong order flow in the second half of 2007 and the projected timing of customers’ construction projects.”

Unbeknownst to shareholders, defendants knew, or should have known, that a greater percentage of TomoTherapy’s backlogged orders were for multi-unit Hi-Art Systems ordered by for-profit entities who had scheduled delivery of the units sequentially. As a result of this delivery schedule, these units would remain in backlog longer than single-unit orders and delivery would be pushed further back in 2008 and even into 2009. Therefore, TomoTherapy had no reasonable basis for its revenue and net income projections for fiscal 2008 because the Company would not be able to recognize revenue for these multi-unit Hi-Art Systems until late 2008 or 2009.

Then, on April 17, 2008, the Company announced its estimated 2008 first-quarter results and revised its fiscal 2008 outlook. Specifically, the Company estimated that 2008 revenues would be in the range of $255 million to $290 million and 2008 net income would be in the range of $0.14 to $0.33 per diluted share. Moreover, the Company reported that it received fewer new sales orders in Europe and that it had to hire a new Managing Director for European and Middle East operations in April 2008.

Upon this news, on April 17, 2008, the price of TomoTherapy common stock dropped 32%, to close at $9.10 per share, on extraordinary trading volume in excess of eight million shares.

On September 2, 2008, the Court granted the plaintiffs’ unopposed motion to consolidate the cases, appoint lead counsel and appoint lead plaintiffs. On October 23, 2008, the lead plaintiffs filed a Consolidated Amended Complaint and then filed a Corrected Consolidated Amended Complaint on November 21, 2008. On December 8, 2008, the defendants filed a motion to dismiss the Consolidated Amended Complaint.

On July 9, 2009, the defendants’ motion was granted in part and denied in part. According to the Order, the motion to dismiss is granted without prejudice with respect to: a. plaintiffs’ claims that defendants violated §§ 11 and 15 of the Securities Act of 1933 making statements in the Initial Public Offering and Secondary Public Offering prospectuses suggesting that a “majority” or a “significant majority” of the backlog would be converted to revenue within 9-12 months; and, b. plaintiffs’ claims that defendants violated § 10(b) of the Securities Act of 1934. Defendants’ motion to dismiss is denied with respect to plaintiffs’ claims that defendants violated §§ 11 and 15 of the Securities Act of 1933 by making statements in the Initial Public Offering and Secondary Public Offering prospectuses suggesting that the backlog contained only “firm” or non-contingent orders.

On August 3, 2009, the plaintiffs filed a Second Amended Consolidated Complaint. The next day, the plaintiffs filed a Corrected Second Amended Consolidated Complaint. On September 3, 2009, the defendants responded by filing a motion to dismiss the Corrected Second Amended Consolidated Complaint. On December 15, 2009, the motion was granted in part and denied in part. On December 30, 2009, a motion to certify the class was filed.

On August 2, 2010, the plaintiffs filed a Notice of Settlement containing the Stipulation of Settlement with Exhibits. According to the Stipulation, the settlement is in the amount of $5 million in cash. On August 4, 2010, the plaintiffs filed an Unopposed Motion for Settlement Preliminary Approval of Settlement, which was approved on September 23, 2010. The final settlement hearing was set for March 18, 2011. On March 22, 2011, the Court entered the orders approving the settlement, the plan of allocation, and request for attorneys' fees and reimbursement of expenses. Judgment was entered in favor of the plaintiffs, and the action was dismissed with prejudice.

COMPANY INFORMATION:

Sector: Healthcare
Industry: Medical Equipment & Supplies
Headquarters: United States

SECURITIES INFORMATION:

Ticker Symbol: TOMO
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: W.D. Wisconsin
DOCKET #: 08-CV-00314
JUDGE: Magistrate Judge Stephen L. Crocker
DATE FILED: 05/30/2008
CLASS PERIOD START: 02/13/2008
CLASS PERIOD END: 04/17/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Ademi & O'Reilly, LLP
    3620 East Layton Ave., Ademi & O'Reilly, LLP, WI 53110
    866-264-3995 414-482-8001 · inquiry@ademilaw.com
  2. 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/
  3. Kenneth A. Elan (former NY)
    217 Broadway Suite 404, Kenneth A. Elan (former NY), NY 10007
    212.619.0260 ·
  4. Law Offices of Bernard M. Gross (Philadelphia) (former)
    1515 Locust Street, 2nd Floor, Law Offices of Bernard M. Gross (Philadelphia) (former), PA 19102
    215-561-3600 215-561-3000 · bmgross@bernardmgross.com
No Document Title Filing Date
COURT: W.D. Wisconsin
DOCKET #: 08-CV-00314
JUDGE: Magistrate Judge Stephen L. Crocker
DATE FILED: 08/04/2009
CLASS PERIOD START: 05/09/2007
CLASS PERIOD END: 04/17/2008
PLAINTIFF FIRMS NAMED IN COMPLAINT:
  1. Coughlin Stoia Geller Rudman & Robbins LLP (San Diego)
    655 West Broadway, Suite 1900, Coughlin Stoia Geller Rudman & Robbins LLP (San Diego), CA 92101
    619.231.1058 619.231.7423 · info@csgrr.com/
  2. Law Offices of Bernard M. Gross (Philadelphia)
    John Wanamaker Building; 100 Penn Square East, Suite 450, Law Offices of Bernard M. Gross (Philadelphia), PA 19107
    215.561.3600 215.561.3600 · susang@bernardmgross.com
No Document Title Filing Date
No Document Title Filing Date