Alstom S.A. Case 08/29/2003

You must submit the settlement "Proof" form attached below, in order to participate in this settlement. There is a strict deadline of September 19, 2011 by which all claims must be submitted. The instructions for submitting are included in the "Proof" and the "Notice" files attached below for your download. DO NOT SEND THE FORMS TO THE SHAREHOLDERS FOUNDATION, FOLLOW THE DIRECTIONS IN THE "PROOF".

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Company Name(s): 
Alstom
Case Name: 
Alstom S.A. Case 08/29/2003
Case Status: 
Lawsuit Filed
Case Status: 
Judgment Issued
Case Status: 
Settlement Proposed
Affected Securities
Paris: ALO.PA
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
08/29/2003
Class Period Begin: 
08/03/1999
Class Period End: 
08/06/2003
Date Settled: 
10/21/2011
Settlement Amount: 
$6,950,000
Deadline to Participate in Settlement: 
09/19/2011
Settlement Notice: 
Settlement Proof: 
Summary: 

MAY 2011 - According to the Notice:

Description of the Consolidated Action and the Class: This Notice relates to a proposed settlement of a class action lawsuit pending against Alstom, Alstom USA, Inc., Alstom Transportation Inc., Pierre Bilger, Francois Newey, Stephan Rambaud-Measson, and Joseph Janovec (collectively, the “Defendants,” and together with Lead Plaintiff, the “Settling Parties”). The proposed Settlement, if approved by the Court, will provide relief to all persons and entities who: purchased Alstom ADS on the New York Stock Exchange; or to U.S. residents who purchased Alstom ordinary shares on non-United States exchanges (the “Class”) during the time period between August 3, 1999 through August 6, 2003, inclusive (the “Class Period”).2

Statement of Class’s Recovery: Pursuant to the Settlement described herein, a settlement payment of $6,950,000 in cash (the “Settlement Amount”) will be deposited into an interest-bearing escrow account for the benefit of the Class. The Settlement Amount together with all interest earned thereon shall be the “Settlement Fund.” Lead Plaintiff’s damages experts estimate that approximately 4.2 million Alstom ADS and 215 million ordinary shares purchased by Class Members may have been affected by the alleged conduct at issue in the Consolidated Action. If all Class Members elect to participate in the Settlement, it is estimated that the average distribution from the Settlement Fund will be approximately $1.49 per affected Alstom ADS and less than one cent per affected Alstom ordinary share before the deduction of Court-awarded expenses and the costs of notice and administration. The reason that the average distribution per affected Alstom ordinary share is so small is that Co-Lead Counsel have determined, in light of the United States Supreme Court’s decision last year in Morrison v. Nat’l Austl. Bank Ltd., 130 S. Ct. 2869 (2010), the prospects of obtaining any recovery under the Securities Exchange Act of 1934 for Class Members who purchased ordinary shares are extremely remote on the facts of this case. A Class Member’s actual recovery will be determined in accordance with the Plan of Allocation approved by the Court.

Statement of Potential Outcome of the Consolidated Action: The Settling Parties disagree on both liability and damages and do not agree on the average amount of damages per ADS or ordinary share that would be recoverable if Lead Plaintiff was to have prevailed on each remaining claim alleged in the Consolidated Action. The issues on which the Settling Parties disagree include: (1) whether the statements made or facts allegedly omitted were false, material, or otherwise actionable under the federal securities laws; (2) the extent to which the various matters that Lead Plaintiff alleged were materially false or misleading influenced (if at all) the trading price of Alstom ADS and/or ordinary shares at various times during the Class Period; (3) the extent to which the various allegedly adverse material facts that Lead Plaintiff alleged were omitted influenced (if at all) the trading price of Alstom ADS and/or ordinary shares at various times during the Class Period; (4) the extent to which external factors, such as general market conditions, influenced the trading price of Alstom ADS and/or ordinary shares at various times during the Class Period; (5) the effect of various market forces influencing the trading price of Alstom ADS and/or ordinary shares at various times during the Class Period; (6) the amount by which Alstom ADS and/or ordinary shares were allegedly artificially inflated (if at all) during the Class Period; and (7) the appropriate economic model for determining the amount by which Alstom ADS and/or ordinary shares were allegedly artificially inflated (if at all) during the Class Period.

SEPTEMBER 2006 - On September 29, 2006, the Court issued the Decision and Order signed by U.S. District Judge Victor Marrero denying several motions to dismiss the Second Consolidated Amended Complaint. On October 5, 2006, the Court issued the Order granting the motion by certain defendants to dismiss claims asserted as to them in the Second Consolidated Amended Complaint.

As summarized by the Co-Lead counsel’s website, on January 7, 2004, the Honorable Victor Marrero entered an Order appointing Co-Lead Plaintiffs and Co-Lead Counsel for the Class in this action. Lead Plaintiffs filed their Consolidated Amended Complaint on June 18, 2004. Defendants moved to dismiss the case, and Lead Plaintiffs opposed the motions to dismiss. On December 22, 2005, Judge Marrero issued three Opinions resolving the motions and allowing Lead Plaintiffs to continue to prosecute the case towards trial. Judge Marrero held that the Consolidated Amended Complaint adequately alleges claims under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder against Alstom, former Alstom Chairman and CEO, and former Alstom Chief Financial Officer relating to the undisclosed guarantees of cruise ship purchasers’ loans, and against Alstom Transportation, Inc. (ATI) relating to the understatement of ATI’s costs. Judge Marrero dismissed certain other claims, including claims under the Securities Act of 1933 relating to Alstom’s February 2001 secondary offering of common stock, based on statute of limitations and other defenses. The Court also ruled that both purchasers of Alstom securities on U.S. exchanges and non-U.S. purchasers of Alstom securities on non-U.S. exchanges may be included in the Plaintiff Class for the claims relating to the ATI fraud, but only purchasers of Alstom securities on U.S. exchanges may be included in the Plaintiff Class for the claims relating to the undisclosed guarantees of cruise ship purchasers’ loans. Lead Plaintiffs took limited discovery relating to the ATI fraud, as ordered in the Court’s December 22, 2005 Opinions, and filed a motion for leave to file a Second Consolidated Amended Complaint incorporating information from the limited discovery on February 24, 2006. Judge Marrero granted Lead Plaintiffs’ motion for leave to amend on March 10, 2006. Certain defendants moved to dismiss the amended claims against them in the Second Consolidated Amended Complaint, and Lead Plaintiffs have filed a brief opposing the motions to dismiss.

The original complaint alleges that defendants violated Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. Throughout the Class Period, as alleged in the complaint, defendants issued numerous positive statements concerning the growth and financial performance of its transportation subsidiary. The complaint alleges that these statements were materially false and misleading because they failed to disclose and/or misrepresented the following adverse facts, among others: (a) that the Company had failed to recognize costs incurred in a rolling-stock supply railcar contract at its transportation unit in anticipation of shifting the costs to other contracts; (b) that the Company lacked adequate internal controls and was therefore unable to ascertain the true financial condition of the Company; and (c) as a result of the foregoing, the value of the Company’s losses was materially understated at all relevant times and the value of the Company’s margins was materially overstated at all relevant times. On June 30, 2003, before the U.S. market opened for trading, Alstom announced that it is “conducting an internal review assisted by external accountants and lawyers following receipt of letters earlier this month alleging accounting improprieties on a railcar contract being executed at the Hornell, New York facility of ALSTOM Transportation Inc. (ATI), a US subsidiary of the Company.” As part of the review, the Company “identified that losses have been significantly understated in ATI’s accounts, in substantial part due to accounting improprieties by the understatement of actual costs incurred, including by the non-recognition of costs incurred in anticipation of shifting them to other contracts, and by the understatement of forecast costs to completion.” As a result, the Company announced that it would record an additional net after tax charge of 51 million euros ($58 million) for the year ended 31 March 2003.