Suprema Specialties Inc. Case 01/30/2004

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Company Name(s): 
Suprema Specialties
Case Name: 
Suprema Specialties Inc. Case 01/30/2004
Case Status: 
Lawsuit Filed
Case Status: 
Judgment Issued
Case Status: 
Settlement Proposed
Case Status: 
Settlement Approved
Affected Securities
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
Class Period Begin: 
Class Period End: 
Court of Filing: 
United States District Court for the District of New Jersey

On April 28, 2008, a final judgment on the settlement was entered.
According to a press release dated January 11, 2008, a proposed partial Settlement valued at $19 million in cash. A hearing will be held before the Honorable William H. Walls in the United States District Court for the District of New Jersey, 50 Walnut Street, Room 4D, Newark, New Jersey 07101 at 10:00 a.m. on March 17, 2008, to determine whether the proposed partial Settlement should be approved by the Court as fair, reasonable, and adequate and to consider the application of Lead Counsel for attorneys’ fees and reimbursement of litigation expenses. You are further notified that Defendant Steven Venechanos has been voluntarily dismissed from the Action without prejudice.
In an article dated November 9, 2007, the lead plaintiffs in a shareholder lawsuit stemming from an accounting scandal at New Jersey gourmet cheese retailer Suprema Specialties on Thursday asked a federal court to approve a $19 million settlement with the defendants in the case. In court documents, the Teachers’ Retirement System of Louisiana asked the court to give preliminary approval to a settlement between it and Suprema’s underwriters Janney Montgomery Scott LLC, Pacific Growth Equities Inc. and Roth Capital Partners LLC, as well as former directors Rudolph Acosta Jr., Paul Desocio and Barry S. Rutcofsky. TRSL requested that, if the court should grant preliminary approval of the settlement, it schedule a final approval hearing during the week of Feb. 11, 2008.
In a press release dated September 7, 2007, the former auditor of failed cheese company Suprema Specialties and several others will pay $19 million to settle a class-action lawsuit that alleged they should have known about a massive fraud that doomed the business. Accounting firm BDO Seidman, as well as several former Suprema board members and underwriters, signed a memorandum of understanding following more than a year of mediation, according to a letter submitted to a federal judge last week by a plaintiff’s attorney. Attorney Eric Kanefsky wrote he expected the parties to sign a stipulation of settlement within the next few weeks. Along with BDO, the settling parties are former board members … and underwriters Janney Montgomery Scott, Pacific Growth Equities and Roth Capital Partners.
On April 23, 2007, the Court granted the plaintiff’s September 15, 2006 Motion to Certify Class.
According to the Opinion, issued by the Third Circuit Court of Appeals on February 23, 2006, we will affirm the District Court’s dismissal of both plaintiffs’ Section 10(b) claims against the Outside Directors and the Underwriters, as well as the dismissal of the Section 18 claims in their entirety. We will reverse the dismissal of plaintiffs’ Section 11 and 12(a)(2) claims against all defendants, the Section 10(b) claims against the Officers and BDO, the Section 15 and 20(a) claims as to the Officers, and the dismissal of the SSF Plaintiffs’ claims under state law. We will remand the matter to the District Court for further proceedings on the remaining claims in accordance with this opinion.
As summarized by a law firm’s website, on February 28, 2002, the Court issued an order consolidating all related cases into one class action lawsuit. Beginning on March 15, 2002 competing motions for the appointment of Lead Plaintiff and Lead Counsel were filed with the Court. On July 1, 2002, the Court appointed a Lead Plaintiff to represent the Class and Lead Counsel to oversee the litigation. Lead Plaintiff filed an Amended Consolidated Class Action Complaint (the “Amended Complaint”) on September 9, 2002. On December 15, 2002, Defendants filed their Motions to Dismiss Lead Plaintiff’s Amended Complaint. The Court ruled on these motions on June 25, 2003, issuing an Order granting Defendants’ Motions and directing Lead Plaintiff to amend their complaint within 60 days. Lead Plaintiff filed a Second Amended Class Action Complaint (the “2nd Amended Complaint”) on January 30, 2004. Defendants filed their Motions to Dismiss this complaint on March 5, 2004. Lead Plaintiff filed an opposition to Defendants’ motions on April 2, 2004, to which Defendants filed their reply briefs on April 16, 2004 and April 19, 2004. On August 31, 2004, the Court issued an Order granting Defendants’ motions to dismiss the 2nd Amended Complaint. On September 17, 2004, Lead Plaintiff filed a notice of appeal with the United States Court of Appeals for the Third Circuit. On September 14, 2005 the appeals court heard oral arguments.
The original Complaint charges defendants with violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. The complaint alleges, among other things that throughout the Class Period defendants knowingly or recklessly disseminate materially false and misleading statements regarding the Company’s financial condition. The following statements, among others, are alleged to have been materially deceptive: August 15, 2001, press release announcing Suprema’s 2001 year end financial results; 2001 Form 10-K filed with the SEC on September 28, 2001; Suprema’s registration statement filed with the SEC on November 6, 2001 for the public offering of over 4 million shares of stock at $12.75 of which 500,000 shares were sold by, among others, defendants Cocchiola and Venechanos; Suprema’s Form 10-Q for its first quarter ended September 30, 2001. In each of its SEC filing, the Company assured the public that its financials were in conformity with GAAP. The complaint alleged that Suprema’s financial statements were not in conformity with GAAP. On December 21, 2001 the Company announced the resignation of defendant Venechanos, the Company’s CFO and disclosed that it had launched an investigation into the Company’s prior reported financial results. In response to this report the NASDAQ halted trading of Suprema stock.The Complaint further alleges that defendants’ misrepresentations caused the price of Suprema common stock to be artificially inflated throughout the Class Period.