American Dental Partners Inc (NASDAQ: ADPI) Investor Securities Class Action Lawsuit 01/25/2008

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Company Name(s): 
American Dental Partners
Case Name: 
American Dental Partners Shareholder Class Action Lawsuit 01/25/2008
Case Status: 
Lawsuit Filed
Case Status: 
Settlement Approved
Affected Securities
NASDAQ: ADPI
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
01/25/2008
Class Period Begin: 
02/25/2004
Class Period End: 
12/13/2007
Court of Filing: 
U.S. District Court for the District of Massachusetts
Deadline To File for Lead: 
03/31/2008
Date Settled: 
04/09/2010
Settlement Amount: 
$6,000,000
Deadline to Participate in Settlement: 
04/17/2010
Summary: 

July 18, 2011 - The court granted the motion for disbursements of funds and approved the distribution of the net settlement amount.

April 9, 2010 - The court approved the settlement, entered the orders approving the plan of allocation, the motion for attorneys’ fees and expenses, and dismissed the action with prejudice.

December 22, 2009 - The court preliminarily approved the settlement.

December 15, 2009 - Parties filed a stipulation of settlement.

April 2, 2009 - The court denied the defendants' motion to dismiss.

December 5, 2008 - The defendants filed a motion to dismiss.

September 26, 2008 - The lead plaintiffs filed an amended consolidated complaint.

May 29, 2008 - Lead plaintiffs and lead counsel were appointed and all cases were consolidated.

March 31, 2008 - Lead plaintiff motions were filed.

February 12, 2008 - Another investor filed an additional complaint.

February 4, 2008 - Another investor filed a complaint.

January 25, 2008 - An investor in shares of American Dental Partners Inc (NASDAQ: ADPI) filed a lawsuit in the U.S. District Court for the District of Massachusetts against American Dental Partners Inc over alleged violations of Federal Securities Laws in connection with certain allegedly false and misleading statements made between August 10, 2005 and December 13, 2007.

According to a press release dated January 29, 2008, American Dental Partners Inc (NASDAQ: ADPI) is a leading provider of business services to multidisciplinary dental group practices in selected markets throughout the United States. Park Dental Group (”PDG”) located in Minneapolis-St. Paul area, was one of the dental groups who had a long-term contract agreement with American Dental Partners Inc, and provided American Dental Partners Inc with significant revenue. Indeed, PDG accounted for 29 percent of American Dental Partners Inc's consolidated net revenue in 2006.

The business relationship between American Dental Partners Inc and PDG worked well for a number of years, but disputes arose in 2004. In February 2006, PDG sued American Dental Partners Inc and its subsidiary. On December 12, 2007, in connection with the lawsuit a jury found American Dental Partners Inc and/or its subsidiary liable for breach of contract, breach of implied covenants of good faith and fair dealing, breach of fiduciary duty, and tortious interference with contract and prospective advantage. The jury awarded PDG $88 million to compensate it for the injuries caused it by American Dental Partners Inc and its subsidiary and punitive damages of $42 million.

After the announcement of the jury verdict, American Dental Partners Inc’s stock plummeted from $19.70 a share on December 11, 2007 to $14.34 on December 12, 2007, to $4.62 on December 13, 2007 after the announcement of the punitive damage award.

Specifically, the complaint charges American Dental Partners Inc and certain of its officers and directors with violations of the federal securities laws by issuing a series of material misrepresentations to the market between February 25, 2004 to December 13, 2007 thereby artificially inflating the price of American Dental Partners Inc shares (NASDAQ: ADPI). More specifically, the complaint alleges that American Dental Partners Inc financial statements throughout the Class Period were materially false and misleading because defendants knew that a substantial amount of American Dental Partners Inc’s revenue and earnings were obtained by conduct, which was wrongful and tortuous as, found by a jury on December 12, 2007.