|  | | 2008 News and Press Releases | | |
SETTLEMENT NEWS:
Judge OKs $5M Settlement In Exodus Class Action
Christine Caulfield
Securities Law 360. July 16, 2008
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EXCERPT: Seven years after it was initially filed, and more than a year after a court of appeals stepped into the fray, a securities class action against former Web hosting firm Exodus Communications Inc. has been settled. Preliminary approval for the $5 million settlement was granted by Judge Maxine Chesney of the U.S. District Court for the Northern District of California in an order Wednesday. The parties drafted a stipulation of settlement on April 9, just days before the U.S. Court of Appeals for the Ninth Circuit issued its order partially remanding the dismissed lawsuit back to the federal court. The case had been pending in the circuit court on appeal by the shareholders and on cross-appeal by an Exodus defendant when the parties agreed to enter into mediation. Counsel for the plaintiffs told the court in a motion last month that the settlement eliminated the “substantial risk” that the shareholders would lose on appeal and walk away empty-handed. The deal, they said, was the product of “significant give and take” and was in the best interests of the class. “Co-lead counsel fully support the settlement, and it is their informed opinion that, given the uncertainty and substantial expense of pursuing this matter through appeal and an eventual trial, the settlement is fair, reasonable and adequate,” they said. The original complaint was filed in July 2001 by a number of Exodus stockholders. A combined class action was filed later that year to incorporate other suits that had been filed in the wake of Exodus’ September 2001 bankruptcy filing. The action, on behalf of investors who acquired Exodus stock between April 20, 2000, and Sept. 25, 2001, claimed that Exodus executives conspired to manipulate the company’s earnings and revenue in an attempt to drive up the value of its stock. |
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