According to a press release dated October 09, 2009, the complaint charges RHI Entertainment and certain of its executives with violations of the Securities Act. RHI develops, produces, and distributes new made-for-television (“MFT”) movies, mini-series, and other television programming worldwide. The Company also produces new episodic series programming for television.
On or about June 13, 2008, RHI filed with the Securities and Exchange Commission (“SEC”) a Form S-1/A Registration Statement (the “Registration Statement”) for the IPO. On or about June 19, 2008, the Prospectus (the “Prospectus”) with respect to the IPO, which forms part of the Registration Statement, became effective and, including the exercise of the over-allotment, more than 13.5 million shares of RHI’s common stock were sold to the public, thereby raising more than $189 million.
The complaint alleges that, throughout the Class Period, defendants made numerous positive statements regarding the Company’s financial condition, business and prospects. According to the complaint, the description of the Company’s business in the Registration Statement created the materially misleading impression that at the time of the IPO the Company had orders for 40 MFT movies and mini-series which had been paid for, were in production and would be delivered in the later half of the year. The complaint further alleges that these statements were materially false and misleading because defendants failed to disclose that, given the declining state of the credit markets and other negative factors then impacting the Company’s business, the Company would not be able to complete 40 MFT movies and miniseries in 2008.
On January 11, 2010, an order appointing lead plaintiff and approving selection of lead counsel was granted by the Court.
On March 18, 2010, an amended class action complaint was filed by the plaintiffs against the defendants in this matter.