Pall Corporation Case 8/14/2007
September 21, 2012 (Update) -- $22.5 million proposed settlement in Pall Corporation class action. Final approval hearing is set for December 14, 2012.
According to the Notice:
The proposed Settlement creates a fund in the amount of Twenty Two Million Five Hundred Thousand United States Dollars (USD $22,500,000.00) in cash and will include interest that accrues on the fund prior to distribution. Based on Lead Counsel’s estimate of the number of shares entitled to participate in the Settlement and the anticipated number of claims to be submitted by Class Members, the average distribution per share to Class Members who purchased or acquired Pall common stock during the Class Period would be approximately $0.58 before deduction of Court-approved fees and expenses. Your actual recovery from this fund will depend on a number of variables, including the number of claimants, the number of shares of Pall common stock they purchased or acquired, the number of shares of Pall common stock you purchased or acquired, the expense of administering the claims process, and the timing of your purchases or acquisitions and sales, if any (see the Plan of Distribution below for a more detailed description of how the settlement proceeds will be allocated among Class Members).
August 14, 2007 -- According to a press release dated August 14, 2007, the complaint charges Pall and certain of its officers and directors with violations of the Exchange Act. The Company, together with its subsidiaries, manufactures and markets filtration, purification, and separation products and integrated systems solutions worldwide.
Specifically, the complaint alleges that, during the Class Period, defendants issued materially false and misleading statements that misrepresented and failed to disclose: (i) that Pall was materially overstating its financial results by understating its tax liability for taxes. Pall has publicly reported that it could owe more than $130 million in taxes, exclusive of interest or penalties, and that its financial statements for fiscal years 1999 through 2006 and for each of the fiscal quarters ended October 31, 2006, January 31, 2007, and April 30, 2007 “should no longer be relied upon and that a restatement of some or all of those financial statements will be required”; (ii) that the Company’s reported effective tax rate was materially inaccurate as the Company was materially understating its tax liability as it has now admitted; and (iii) based on the foregoing, the Company’s financial statements were not prepared in accordance with GAAP and were, therefore, materially false and misleading.
The complaint further alleges that on July 19, 2007, after the markets closed, Pall announced that the Audit Committee of its Board of Directors had commenced an inquiry into a possible material understatement of U.S. income tax payments and of its provision for income taxes in certain prior periods beginning with fiscal year ended July 31, 1999. In response to this announcement, the price of Pall common stock declined from $48.78 per share to $41.11 per share, over 15%, on unusually high trading volume. Then, on August 2, 2007, Pall announced that its financial statements for fiscal years 1999 through 2006 and for each of the fiscal quarters ended October 31, 2006, January 31, 2007, and April 30, 2007 “should no longer be relied upon and that a restatement of some or all of those financial statements will be required.” Furthermore, Pall reported that the Company could owe up to $130 million in back taxes not including interest and penalties. Upon this news, shares of the Company’s stock fell $1.21 per share, or 3%, to close at $39.90 per share, on heavy trading volume.