According to a complaint dated August 18, 2011, the Complaint charges the Company and certain of its executive officers and/or directors with violations of federal securities laws.
In 2009 and 2010, Ener1 made separate investments in an electric- vehicle manufacturer and its majority parent company, a Norwegian limited liability company. The Complaint alleges that throughout the Class Period defendants knew or recklessly disregarded that their public statements concerning the Company’s business, operations and prospects were materially false and misleading. Specifically, the defendants made false and/or misleading statements and/or failed to disclose, among other things, that: (1) the companies invested in lacked adequate operating capital, and the ability to raise capital, to continue operations; (2) as a result, the Company failed to timely impair the value of its investments; (3) as a result, the outstanding loans receivable and accounts receivable were uncollectible; (4) as such, the Company’s financial statements were misstated and its financial results were not prepared in accordance with Generally Accepted Accounting Principles (“GAAP”); and (5), as a result, the Company’s financial statements were materially false and misleading at all relevant times.
On June 22, 2011, the Company disclosed that a material charge was required under GAAP applicable to the Company, related to the loans receivable of the investments and accounts receivable of the investments held by the Company, based on the announcement by the investment company that, following an extended and ultimately unsuccessful search for long-term financing, it would be filing for bankruptcy proceedings in the Norwegian courts on June 22, 2011. The defendant Company estimated the amount of the charge would be $35.4 million, subject to change to the extent that the Company received any recovery as a result of the liquidation, but any recovery, to the extent it occurred, would not likely be significant.
Subsequently, on August 15, 2011, the Company disclosed that its financial statements for the year ended December 31, 2010 and for the quarterly period ended March 31, 2011 should no longer be relied upon and should be restated. The determination was made following an assessment of certain accounting matters related to the loans receivable owed to the Company by the Norwegian company and accounts receivable owed to the Company by the Norwegian company held by the Company, and the timing of the recognition of the impairment charge related to the Company’s investment in the Norwegian company originally recorded during the quarter ended March 31, 2011.
On February 15, 2012, the Court issued an Order to consolidate cases 11cv5794 (as Lead Case) with 11cv5795 and 11cv6030. The Court also appointed Lead Plaintiff and Lead Counsel.
On April 10, 2012, Plaintiffs filed a consolidated amended complaint.
On January 11, 2013, the parties entered into a Stipulation of Settlement. The Court preliminarily approved the Settlement on February 8. On May 10, the Court issued a Judgment approving the Settlement, and also approved attorneys' fees and expenses.