According to a press release dated January 19, 2012, the complaint alleges that the Company engaged in a fraudulent scheme to drive down the price of a potential Target Company’s common stock in an attempt to acquire the Target Company’s assets for less than their fair market value by, in part, filing false and misleading statements with the SEC. The result of the Company’s false and misleading statements, according to the complaint, was to drive down the market price of the Target Company’s common stock from 90¢/share on January 18, 2011 to 35¢/share on July 28, 2011.
The plaintiffs state that the Company a number of false and/or misleading statements in its public filings which caused the Target Company’s stock to plummet. These public filings stated that the Company at no point had the intention to acquire the Target, despite the fact that it had been in the advanced stages of a negotiated buyout process. The public filings further stated that the Company could do so at no consideration to shareholders because of debts owed to Company by the Target. The complaint alleges that this assertion misrepresented the status and extent of the debt owed to the Company and the Company’s ability to acquire the Target pursuant to the credit agreement entered into between the two companies. The complaint alleges that, in making these statements, the Company effectively told the market that the Target’s stock was worthless, and that the market responded accordingly.
The complaint further alleges: (1) that despite the Company’s best efforts, it was unable to acquire the Target for less than its fair market value; (2) that although the Target was driven into bankruptcy as a result of the Company’s actions, it was able to interest a rival in its acquisition; (3) that as a result, the Company eventually acquired the Target in
August 2011 at its market value prior to the Compay’s public filings (between 93¢ and $1.09/share); and (4) that as a result of the Company's actions, many investors had sold stock in the interim at greatly reduced prices
On May 18, 2012, the Court issued an Order appointing lead plaintiff and approving the selection of lead counsel. On June 1, the plaintiffs filed their amended complaint.
On February 19, 2013, the Court issued an Order denying in part and granting in part Defendant's motion to dismiss. All of Plaintiff’s claims shall remain, except Plaintiff’s claim pursuant to Section 9(a)(2) of the Securities Exchange Act.
On September 26, 2013, the Court issued an Order dismissing this case as a settlement has been reached.
On October 1, 2013, the Court issued an Order vacating the above Order of Dismissal and reopening this case.
On July 1, 2014, the parties entered into a Stipulation of Settlement. This Settlement was preliminarily approved by the Court on August 20. The Court granted final approval of the Settlement on December 9.
On December 6, 2017, the Court issued an Order granting Plaintiff's Motion for Disbursement of residual Settlement Funds.