Ormat Technologies, Inc. Hit by Investor Lawsuit
April 27, 2012 (Update) -- Settlement proposed. According to the Notice:
Security and Time Period: Ormat Technologies, Inc. (“Ormat”) securities (stock symbol: ORA) purchased or otherwise acquired between May 7, 2008, and February 24, 2010, inclusive (the “Class Period”).
Settlement Fund: $3,100,000 in cash. Your recovery will depend on the number of Ormat securities you, and other Class Members who file claims, purchased and sold and the prices at which you, and the other Class Members who file claims, purchased and sold those securities. The estimated average recovery will be approximately $0.29 per share before deduction of Courtapproved fees and expenses and costs of notice and claims administration.
Reasons for Settlement: The case has been litigated since March 2009. The Lead Plaintiffs and Co-Lead Counsel believe that the Settlement provides the Class with a benefit now, instead of years of further uncertain litigation, including disposition of summary judgment motions, a contested trial and likely appeals, with the possibility of no recovery at all.
The Plaintiffs allege that Ormat’s stock price was artificially inflated as a result of a series of untrue or materially misleading statements related to Ormat’s inappropriate accounting practices with respect to exploration and development costs for geothermal energy, as well as the development of Ormat’s geothermal energy resource at North Brawley. Plaintiffs further contend that Defendants made these statements knowing them to be false or misleading, or recklessly disregarding their false or misleading natures, and that investors suffered injury as a result of the alleged inflation.
The Defendants have denied and continue to deny all charges of wrongdoing or liability arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Complaint. Specifically, Defendants have denied and continue to deny, inter alia, the allegations that Lead Plaintiffs or the Class have suffered damages, that Defendants or any of them made or caused to be made any alleged misrepresentation or omission, and that any Defendant acted with scienter in making or causing any alleged misrepresentation or omission.
Nonetheless, Defendants have concluded that further conduct of the Litigation could be protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation in order to limit further expense, inconvenience and distraction, to dispose of the burden of protracted litigation, and to permit the operation of the Company’s business without further distraction and diversion of the Company’s executive personnel with respect to the matter at issue in the Class Action. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases like this Litigation. Defendants have, therefore, determined that it is desirable and beneficial
that the Litigation be settled in the manner and upon the terms and conditions set forth in the Stipulation.
The Defendants entered into the Stipulation and the Settlement without in any way admitting to or acknowledging any fault, liability, or wrongdoing of any kind. There has been no adverse determination by any court against any of the Defendants on the merits of the claims asserted by the Plaintiffs. Neither the Stipulation, nor any of its terms or provisions, nor any of the negotiations or proceedings connected with it, shall be construed as an admission or concession by any of the Defendants of the merit or truth of any of the allegations or wrongdoing of any kind on the part of any of the Defendants. The Defendants entered into the Stipulation and Settlement based upon, among other things, the Plaintiffs’ agreement herein that, to the fullest extent permitted by law, neither the Stipulation nor any of the terms or provisions, nor any of the negotiations or proceedings connected therewith, shall be offered as evidence in the Class Action or in any pending or future civil, criminal, or administrative action or other proceeding to establish any liability or admission by any of the Defendants or any of their respective related entities, except as expressly set forth herein.
March 9, 2010 -- An investor in Ormat Technologies, Inc. (Public, NYSE:ORA) filed a lawsuit in the United States District Court for the District of Nevada on behalf of a class consisting of all persons or entities who purchased the securities of Ormat Technologies, Inc. between May 6, 2008 and February 24, 2010, against Ormat Technologies, Inc.
According to the complaint the plaintiff alleges that Ormat Technologies, Inc and certain of its executive officers violated federal securities laws by knowing or recklessly disregarding between May 6, 2008 and February 24, 2010 that their public statements concerning Ormat Technologies, Inc's business, operations and prospects were materially false and misleading.
Ormat Technologies, Inc., located in Reno, NV, is engaged in the geothermal and recovered energy power business. The Company designs, develops, builds, owns and operates geothermal recovered energy-based power plants, usually using equipment that it designs and manufactures.
Shares of Ormat Technologies, Inc. (Public, NYSE:ORA) reached in 2007 $57 per share, in 2008 over $53.50 per share, and 2009 over $43 per share.
Ormat Technologies, Inc. increased its Total Revenue over the last years. Ormat Technologies reported in 2007 Total Revenue of $295.92million with a Net Income of $27.38million, in 2008 Total Revenue of $344.83million with a Net Income of $43.61million, and in Total Revenue of $415.24million with a Net Income of $68.85million.
But on February 24, 2010, Ormat Technologies, Inc disclosed that the Board of Directors and Audit Committee of Ormat Technologies, Inc, upon recommendation of management, had concluded that its financial statements for the year ended December 31, 2008 contained in its Annual Report on Form 10-K for the year then ended require restatement and should no longer be relied upon, and additionally, that Ormat Technologies, Inc’s prior related earnings and news releases and similar communications should also no longer be relied on to the extent they related to the financial statements for the year ended December 31, 2008. Ormat Technologies, Inc additionally indicated that Ormat Technologies, Inc planned to revise its consolidated financial statements as of and for the three- and nine-month periods ended September 30, 2009.
As a result of this news, so the lawsuit, Ormat Technologies, Inc shares (ORA) declined $1.28 per share, to close on February 24, 2010, at $31.90 per share, and further declined over the following two days to close on February 26, 2010, at $28.93 per share, on heavy trading volume. Over the course of these three days of trading, Ormat Technologies, Inc shares declined a total of $4.25 per share. During the last couple trading days ORA shares recovered slightly and traded recently at $30.45 per share.