Motorola, Inc. Hit by Shareholder Lawsuit

JULY 2011 - According to the Notice:

CLAIMS OF THE PLAINTIFFS AND BENEFITS OF SETTLEMENT

This securities fraud class action was brought on behalf of those Persons who purchased the common stock of Motorola between October 25, 2007 and January 22, 2008, inclusive, against Motorola and three of its current and/or former key executives and directors for allegedly issuing false and misleading public statements during the Class Period. These statements concerned Motorola’s purported, then-present business fundamentals, and prospects, including: (i) the buildup of excess inventory at the Company’s mobile device customers (including carriers, retailers and distributors) that Defendants allegedly knew was not selling during the 2007 holiday sales period; (ii) the resulting significant decline in orders being placed for Motorola’s mobile device products by its customers during 4Q 07 for deliver in 1Q 08; (iii) its margin deterioration for its higher costs of semi-conductors, or “chips”; (iv) that Motorola remained on track to achieve $0.12–$0.14 earnings on continuing operations in 4Q 07 as being promised; (v) that Motorola remained on track to achieve “bottom-line” improvement, or improved operating income, in its Mobile Devices division during the 4Q 07, as being promised; and (vi) that each of Motorola’s business segments, including Mobile Devices, would be “profitable” in FY 08. According to Plaintiffs, Defendants’ allegedly false statements and material omissions artificially inflated the market price of Motorola’s stock during the Class Period. When the true state of affairs was revealed, Motorola’s stock price dropped, resulting in significant losses to those shareholders who had purchased Motorola common stock while it was allegedly artificially inflated.

Plaintiffs and Lead Counsel believe that the claims asserted in the Action have merit and that the evidence developed to date supports the claims. However, Plaintiffs and Lead Counsel recognize and acknowledge that the case has been dismissed by the Court and that even if they were to prevail before the Seventh Circuit and the dismissal was reversed, they still would face the expense and length of continued proceedings necessary to prosecute the Action against the Defendants through trial and through an additional appeal to the Seventh Circuit. Plaintiffs and Lead Counsel have also taken into account the uncertain outcome and the risk of any litigation, especially in complex actions such as the Action, as well as the risks posed by the difficulties and delays inherent in such litigation. Plaintiffs and Lead Counsel also are mindful of the defenses to the securities law violations alleged in the Action, as well as the current procedural posture of the case. Plaintiffs and Lead Counsel believe that the Settlement set forth in the Stipulation confers substantial benefits upon the Settlement Class. Based on their evaluation, Plaintiffs and Lead Counsel have determined that the Settlement set forth in the Stipulation is in the best interests of the Settlement Class.

TERMS OF THE PROPOSED SETTLEMENT

The amount of $3,150,000 has been transferred to an interest-bearing escrow account under the control of the Escrow Agent. This principal amount of $3,150,000 in cash, plus any accrued interest, shall constitute the Settlement Fund. Defendants are also contributing up to $200,000 towards the cost of administering the Settlement. Administrative costs include identifying Class Members, providing notice to the Settlement Class, processing submitted claims, and distributing the Settlement pursuant to the terms of the Notice Order. If these administrative expenses exceed $200,000, a portion of the Settlement Fund will be used to pay these expenses. In addition, as explained below, a portion of the Settlement Fund may be awarded by the Court to Plaintiffs’ Counsel as attorneys’ fees and for expenses incurred in litigating the case. The balance of the Settlement Fund (the “Net Settlement Fund”) will be distributed according to the Plan of Distribution described below to Class Members who submit valid and timely Proofs of Claim.

JUNE 2011 - $3.15 million settlement proposed for those Motorola shareholders who purchased company stock between October 2007 and January 2008.

JANUARY 2010 - An investor in Motorola, Inc. (NYSE:MOT) filed a lawsuit in the U.S. District Court for the Northern District of Illinois on behalf of those purchasing Motorola, Inc. (Public, NYSE:MOT) common stock during the period beginning December 6, 2007 through January 22, 2008, against Motorola, Inc and others over alleged violations of Federal Securities Laws in connection with problems Motorola was experiencing with its earnings projections and sales demand for the RAZR2 phone.

According to the complaint the plaintiff alleges that Motorola, Inc. (NYSE: MOT) and certain of its current and former officers and directors violated the Securities Exchange Act of 1934 by intentionally and knowingly misstating between December 6, 2007 through January 22, 2008 Motorola's 4Q 07 earnings projections and sales demand for its newly-released RAZR2 mobile handset during the 2007 holiday shopping season.

Then on January 22, 2008, Motorola issued a release reporting Motorola's 4Q 07 financial results, followed by an earnings conference held with the investment community later that day, during which this information was finally disclosed to investors. Significantly, so the lawsuit, Motorola's senior executives expressly conceded that they knew the demand for the RAZR2 was lackluster dating back as early as Thanksgiving 2007 - two weeks before December 6, 2007. Defendants also downgraded their 1Q 08 earnings guidance, so the complaint, and as the market reacted to these disclosures, Motorola shares plummeted 18.8%, or $2.31 per share, to close at $10.01 per share, its lowest level in five years, on unusually high volume.

Motorola, Inc., located in Schaumburg, Illinois, is engaged in providing technologies, products and services for mobile phones. The Company’s portfolio includes wireless handsets, wireless accessories, digital entertainment devices, wireless access systems, voice and data communications systems, and enterprise mobility products. The segments of the Company include Mobile Devices Segment, Home and Networks Mobility Segment and Enterprise Mobility Solutions Segment. Motorola, Inc. reported in 2007 Total Revenue of $36.622billion and in 2008 Total Revenue of $30.146billion. Shares of Motorola, Inc. (MOT) traded recently at $7.19 per share, down from its 52weekHigh of $9.45 per share, $15.07 per share on January 04, 2009, almost $20 per share during 2007, and over $26 per share in 2006.