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Case ID: 3356 | Stocks | 04/27/2004
The parties have reached a final $4 million settlement in several consolidated class actions filed against healthcare information provider Medirisk, Inc. (formerly Nasdaq: MDMD) and certain of its officers and directors by stockholders who purchased Medirisk common stock between May 4, 1998, and June 30, 1998, or traceable to the company’s secondary offering on June 11, 1998. Persons eligible to participate in the settlement must file a proof of claim postmarked no later than April 30, 2004.
The AllegationsMedirisk was a company engaged in the business of providing proprietary database products and analytical services to the healthcare industry. The actions alleged that, starting with a report dated May 4, 1998, Medirisk and the individual defendants falsely represented that the company was successfully executing its 1998 business plan, the components of which involved high recurring revenue rates, a broad customer base, cross-selling opportunities for its products and a successful acquisition program. The action also alleged that the defendants falsely stated that Medirisk was experiencing continuing growth across all product lines and that Medirisk was not highly dependent on large contracts in any particular product line at a given point in time. Upon news of significant problems within the company, the price of Medirisk common stock plunged 69%, falling from its closing price of $20.25 per share on June 30, 1998, to close at $6.31 per share on July 1, 1998. On November 15, 2000, Medirisk filed for bankruptcy protection and is no longer a party to this action. The individual defendants include the following: Mark A. Kaiser, Kenneth M. Goins, Jr. and Thomas C. Kuhn III. SunTrust Equitable Securities, J.C. Bradford & Company, and Jefferies & Company, Inc. are named as defendants in their capacity as underwriters for Medirisk. Settlement ParticularsThe individual defendants and their insurer have paid $1.5 million into an interest-bearing escrow account the purposes of the settlement. Medirisk’s underwriters have paid an additional $2.5 million into an interest-bearing escrow account for the purposes of settlement. The $1.5 million from the individual defendants, and the interest earned thereon, less all taxes, approved costs, fees and expenses applicable to the fund will be distributed to members of the class who purchased shares of Medirisk common stock during the class period and who submit acceptable proofs of claim. The $2.5 million from the underwriter defendants, and the interest earned thereon, less all taxes, approved costs, fees and expenses applicable to such fund shall be distributed to members of the class who purchased shares of Medirisk common stock traceable to the June 11, 1998, secondary offering and who submit acceptable proofs of claim. All persons owning such shares, sold at a loss on or before June 30, 1998, will be paid the difference between the purchase price (including commissions, etc.) and the sales proceeds received (net of commissions, etc.) Payments to those persons still holding such shares as of the close of trading on June 30, 1998, will be calculated as the difference between the purchase price (including commissions, etc.) less $6.31 per share. Individual settlement amounts will be paid out of these two funds, the exact amounts to be calculated by the claims administrator according to a complex set of calculations that may be reviewed in the Notice of Settlement on the claims administrator's web site. Proof of Claim and Release forms must be completed and sent by first class mail postmarked on or before April 30, 2004, addressed as follows: In re Medirisk Securities Litigation The court finalized the settlement in a hearing held on March 22, 2004. At Lawcash.com, it is our goal to keep you informed about important legal cases, class actions and settlements. Our lawyers offer free legal evaluations in tort cases, class actions, personal injury, and other lawsuits because we are dedicated to helping you resolve your legal complaints. Other Stocks Cases of Interest Several class actions have been filed against software company BEA Systems, Inc., (Nasdaq:BEAS) and certain of its officers and directors by stockholders who purchased the company's common stock between November 13, 2003, and May 13, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. A class action has been filed against packaging materials manufacturer Sealed Air Corporation (NYSE: SEE) and certain of its officers and directors by stockholders who purchased the company's common stock between March 27, 2000, and July 30, 2002. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. If you've purchased FAO stock, you may be entitled to claim money in a settlement for $2,225,000. A hearing will be held before the Honorable Michael W. Baylson, United States District Court for the Eastern District of Pennsylvania, 601 Market Street, in a courtroom posted on the Court's schedule, Philadelphia, PA 19106 at 4:00 p.m., on May 16, 2005 to determine whether the proposed settlement should be approved by the Court as fair, reasonable, and adequate, and to consider the motion of Plaintiffs' Counsel for attorneys' fees and reimbursement of expenses. Several class actions have been filed against technology company Lattice Semiconductor Corporation (Nasdaq:LSCC), and certain of its officers and directors by stockholders who purchased the company's common stock between April 22, 2003, and April 19, 2004. The actions claim that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company's securities. According to a November 27, 2008, press release, the complaint alleges that instead of complying with their fiduciary duty to maximize shareholder value for NCC’s public shareholders, defendants instead franticly scrambled to sell the Company at below market prices while tens of millions of dollars are being diverted in the form of: (i) premium payments to a NCC significant shareholder for its block of preferred shares and warrants; (ii) the acceleration of unvested options held by defendants; and (iii) the potential elimination of millions of dollars of liability arising out of defendants’ prior misconduct through a merger designed to wrest NCC shareholders of standing to maintain derivative litigation against defendants and a ‘deeper pocket’ to indemnify them, all in exchange for agreeing to an alarming fire sale price for NCC. A class action has been filed the Federal National Mortgage Corporation (Fannie Mae) (NYSE: FNM_PK) and certain of its officers and directors by stockholders who purchased the company’s common stock between January 13, 2000 and September 22, 2004. The action claims that the defendants violated federal securities laws by issuing a series of material misrepresentations to the market over this time period, thereby artificially inflating the price of the company’s securities. The stockholders seek to recover compensatory damages for the loss of value of their stock. |
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