Xethanol Corporation Case 10/23/2006
According to a notice from the United States District Court for the Southern District of New York a preliminary approval of a proposed settlement affecting people who purchased the publicly-traded common stock of Xethanol between January 31st, 2006 and August 8th, 2006 has been granted. The lawsuit is a combination of several cases filed against the company over allegedly false claims and omissions and was pending in the United States District Court for the Southern District of New York. Xethanol did not admit to any of the claims in agreeing to settle the case.
n order to share in the distribution of the Net Settlement Fund, Class Members must submit a Proof of Claim and Release postmarked no later than September 26th, 2008 in order to establish that they are entitled to recovery.
The U S Deistrict Court set a hearing for September 15th, 2008, at 9:30 a.m., before the Honorable Harold Baer at the United States Courthouse, 500 Pearl Street, Courtroom 23B, New York, NY. The purpose of this settlement hearing is to determine:
(1) whether the Proposed Settlement of the claims in the Litigation for the sum of $2,800,000 in cash should be approved by the Court as fair, reasonable and adequate;
(2) whether, after the hearing, this Litigation should be dismissed with prejudice pursuant to the terms and conditions set forth in the Stipulation of Settlement dated as of April 29th, 2008;
(3) whether the Plan of Allocation is fair, reasonable and adequate and should be approved;
(4) whether the application of Lead Counsel for the payment of attorneys’ fees and reimbursement of expenses incurred in this Litigation should be approved.
The plaintiffs alleged that throughout the class period Xethanol repeatedly assured investors that it could sustain itself on revenue from corn ethanol production while successfully commercializing biomass ethanol production. The shareholders accused that share prices fell steeply as the truth came to light, as it became clear that the company could not commercialize its biomass ethanol production plans in the near-term and as a result the stock price of Xethanol fell from over $15 to $4 per share between January 31st, 2006 and August 8th, 2006.