According to a press release dated August 8, 2008, the complaint charges Reddy Ice and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Reddy Ice is the largest manufacturer and distributor of packaged ice in the United States.
Specifically, the complaint alleges that during the Class Period, defendants issued a series of materially false and misleading statements concerning the Company’s financial performance and prospects. According to the complaint, from at least 2002 to the present, defendants engaged in a continuing agreement, understanding and conspiracy in restraint of trade to artificially raise, fix, maintain or stabilize prices for packaged ice in the United States in violation of §1 of the Sherman Act, 15 U.S.C. §1. Moreover, defendants divided up the packaged ice market so that they would not compete with other packaged ice makers, such as Arctic Glacier International, Inc. and Home City Ice Co. Specifically, the complaint alleges that Reddy Ice failed to disclose that (a) the Company was recognizing significant amounts of revenues derived from illegal activities in violation of the U.S. antitrust laws; and (b) as a result, the Company’s financial statements were not a fair presentation of Reddy Ice’s results and were presented in violation of U.S. Generally Accepted Accounting Principles and U.S. Securities and Exchange Commission rules.
On March 6, 2008, after the markets closed, Reddy Ice issued a press release announcing that “federal officials executed a search warrant at the Company’s corporate office in Dallas on March 5, 2008.” Upon this news, on the next trading day, shares of the Company’s stock fell $7.73 per share, or 33%, to close at $15.38 per share, on heavy trading volume.
On July 17, 2009, District Judge Paul D. Borman signed the Order granting the motion to consolidate several actions. On July 27, 2009, Judge Borman granted the motion to appoint interim lead plaintiff and lead counsel. On August 6, 2009, an Order was entered modifying the previous Order appointing lead plaintiff and lead counsel. Lawrence Diamond and Southeastern Pennsylvania Transportation Authority’s are appointed interim lead plaintiffs and Schiffrin Barroway Topaz & Kessler, LLP is interim lead counsel and Zausmer, Kaufman, August, Caldwell & Taylor, P.C. is interim liaison counsel for the class.
On November 2, 2009, the plaintiffs filed a Consolidated Class Action Complaint which named an additional individual as defendant. On December 17, 2009, the defendants responded by filing several motions to dismiss the Consolidated Class Action Complaint. On May 11, 2010, the defendants filed a redacted motion to dismiss.
On December 6, 2010, the Court entered the Opinion and Order signed by Judge Paul D. Borman on the defendants’ pending motions to dismiss. According to the Order, the Court denies Defendants Reddy Ice, Brick, Janusek and Weaver’s motions to dismiss and grants Defendant Booth’s motion to dismiss. The Court further grants Defendants Reddy Ice, Janusek and Brick’s motion to supplement their pending motion to dismiss.
On October 14, 2011, the plaintiffs filed a motion to certify the class.
On April 18, 2012, the Court issued an Order granting the parties' Joint Motion for Expedited Transfer of Venue. This case was immediately transferred to the United States District Court for the Northern District of Texas, for referral under 28 U.S.C. § 157(a) to the bankruptcy court of that district and consolidation with the bankruptcy case of the debtor Reddy Ice Holdings, Inc.
According to a press release dated April 27, 2012, a settlement in the amount of $1 million was proposed in connection with the bankruptcy.