GMX Resources Inc.
GMX Resources Inc. Securities Settlement
The lawsuit was settled for $2.7 million in cash. The following is a summary of the proceedings in this lawsuit: ‘The case concerns claims brought by investors alleging that the price of GMX common stock issued in the Company May 2009 and October 2009 Offerings was artificially inflated as a result of materially untrue statements contained in the offering materials for each of the Offerings concerning the accuracy and integrity of GMX financial statements, as well as the adequacy of the Company internal controls over financial reporting. On March 10, 2011 a putative class action was filed by Lead Plaintiffs in the District Court of Oklahoma County, State of Oklahoma, asserting claims for alleged violation of federal securities laws against GMX and the Settling Defendants, among others. Lead Plaintiffs asserted claims in connection with secondary offerings of common stock commenced by GMX on or about July 18, 2008, May 13, 2009, and October 22, 2009. On May 12, 2011, Defendants removed the lawsuit to the United States District Court for the Western District of Oklahoma. On June 10, 2011, Lead Plaintiffs moved to remand the litigation back to the District Court of Oklahoma County. On November 16, 2011, the Court denied Lead Plaintiffs motion to remand. On July 3, 2012, the Court appointed Northumberland County Retirement System and Oklahoma Law Enforcement Retirement System as Lead Plaintiffs. The Court further appointed Kessler Topaz Meltzer & Check, LLP and Nix Patterson & Roach, LLP as Lead Counsel and Nelson, Roselius, Terry & Morton (n/k/a Nelson, Terry, Morton, DeWitt, Paruolo & Wood) as Liaison Counsel. On August 17, 2012, Lead Plaintiffs filed the operative complaint, the Amended Class Action Complaint (the Complaint). The Complaint asserted claims against GMX and the Settling Defendants on behalf of purchasers or acquirers of GMX common stock pursuant or traceable to the May 2009 Offering or the October 2009 Offering.2 In particular, the Complaint asserted claims for violations of Sections 11, 12, and 15 of the Securities Act of 1933 (15 U.S.C. Â§Â§ 77k, 77l, and 77o) based on allegations that GMX and the Settling Defendants made untrue statements, material misrepresentations and/or omissions in the offering materials for the May 2009 Offering and October 2009 Offering, including without limitation, the prospectus GMX filed with the U.S. Securities and Exchange Commission (the SEC) on June 25, 2008, prospectus supplements GMX filed with the SEC on May 14, 2009 and October 26, 2009, and the GMX financial statements and SEC filings incorporated by reference into the prospectus and prospectus supplements. On October 1, 2012, GMX and the Settling Defendants filed motions to dismiss. On April 1, 2013, GMX filed for Chapter 11 bankruptcy in the United States Bankruptcy Court for the Western District of Oklahoma. On July 17, 2013, as a result of GMX bankruptcy filing, the parties filed a stipulation dismissing Lead Plaintiffs claims against GMX with prejudice. On September 16, 2013, the Court entered an order denying the Settling Defendants motions to dismiss. Thereafter, the Settling Parties agreed to begin discussing a potential settlement of the Litigation, and on November 4, 2013, the Settling Parties engaged in mediation with the Honorable Layn R. Phillips, United States District Judge for the Western District of Oklahoma (Ret.). Following the mediation, with the continued assistance of Judge Phillips, the Settling Parties continued to negotiate a resolution, which culminated in the Settling Parties reaching an agreement in principle to settle the Litigation on November 25, 2013.’