According to a press release dated March 26, 2010, the Complaint alleges that the Registration Statement was materially false and misleading and/or omitted facts necessary to make the statements made not misleading, including the following: (1) that the Company's accounts receivable included at least $1.5 million in aging receivables that should have been reserved for; and (2) that the Company's Home Health revenues were falling short of internal forecasts due to a slowdown in admissions from the Company's Integrated Services program due to the State of Illinois' effort to develop new procedures for integrating care.
On March 18, 2010, after the market closed, the Company reported its financial results for the 2009 fiscal fourth quarter and year ending December 31, 2009, and reported a net loss of $3.7 million, or a loss of $0.48 per share for the fourth quarter. The Company indicated that Addus had to increase its bad debt reserve levels by $1.5 million, and that during the fourth quarter the Company's Home Health revenues were short of internal forecasts due to a slowdown in admissions from the Company's Integrated Services program due to the State of Illinois' effort to develop new procedures for integrating care.
The following day, shares of the Company's stock declined $2.60 per share, or approximately 29%, to close at $6.30 per share on March 19, 2010. This closing price represented a cumulative loss of $3.70, or 37%, of the value of Addus shares at the IPO price of $10 per share, just months earlier.
On June 01, 2010, the Court granted the Plaintiff's motion to be appointed as lead plaintiff and the Plaintiff's selection of lead counsel.
On August 10, 2010, an Amended Complaint was filed by the Lead Plaintiff against the defendants. The defendants responded by filing a motion to dismiss on September 20, 2010.
As summarized by the Company's FORM 10-K for the fiscal year ended December 31, 2010, as previously reported, on March 21, 2011, we and the other named defendants entered into a stipulation of settlement with the plaintiffs with respect to the class action, pursuant to which we are to cause $3,000,000 to be paid into a settlement fund. The monetary amount of this settlement is covered by insurance. On March 22, 2011, the United States District Court for the Northern District of Illinois preliminarily approved the settlement and scheduled a July 21, 2011 hearing to consider, among other things, whether to finally approve the settlement of the class action. If the settlement is given final approval by the court, the class action will be dismissed with prejudice.
According to the Final Judgment and Order signed by the Honorable Virginia M. Kendall on July 21, 2011, the motions for settlement and for attorney fees and reimbursement of expenses are granted. The action is now dismissed with prejudice.