According to a press release dated May 19, 2009, the complaint charges certain of Nortel’s former executives with violations of the Exchange Act. Nortel supplies end-to-end networking products and solutions that help organizations enhance and simplify communications.
The complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. Specifically, the complaint alleges that defendants failed to disclose the following adverse facts, among others: (i) that demand for the Company’s products was declining as carriers cut back their capital expenditures and other customers deferred purchase decisions; (ii) that the Company’s financial results were materially overstated as the Company was failing to properly write down its goodwill; (iii) that the Company’s restructuring was not meeting with success as the Company was struggling to cut costs and improve profitability; and (iv) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its business, operations, earnings and prospects.
On September 17, 2008, Nortel issued a press release announcing its “preliminary view on certain third quarter results.” The Company also announced that it was engaging in a “comprehensive review” of Nortel’s business and that “planning” was “underway for further restructuring and other cost reduction initiatives.” In response to the Company’s announcement, the price of Nortel stock declined from $5.30 per share to $2.68, on heavy trading volume.
On July 22, 2009, Judge Shira A. Scheindlin granted the motion to appoint Kien Chen and Moreno Minto as Lead Plaintiffs. The law firms of Coughlin Stoia Geller Rudman & Robbins LLP and Holzer Holzer & Fistel, LLC were appointed Lead Counsel.
According to the Order signed by Judge Shira A. Scheindlin on November 9, 2010, the above-captioned has been placed on the suspense docket due to the Nortel Canadian bankruptcy proceeding.