Swisher Hygiene, Inc.
Swisher Hygiene, Inc Securities Settlement
The lawsuit was settled for $5.5 million in cash. The following is a summary of the proceedings in this lawsuit: ‘On March 28, 2012, Swisher announced that it would be unable to timely report its 2011 year-end financial results because its Audit Committee was conducting an internal review relating to possible adjustments to the accounting for business acquisitions and the calculation of the allowance of doubtful accounts receivable (the Internal Review). The March 28, 2012 announcement warned investors that the Companyâ€™s previously issued interim financial statements for the quarterly periods ended March 1, 2011, June 30, 2011, and September 30, 2011which are the first, second and third quarters of 2011 should no longer be relied upon, and that material adjustments to the Prior Financial Information may be required and the Company may need to file restatements of its first, second and third quarter financial statements. On March 30, 2012, a purported Company stockholder commenced a putative securities class action on behalf of purchasers of the Company common stock in the United States District Court for the Southern District of New York (Southern District of New York) against the Defendants captioned James v. Swisher Hygiene, Inc., et al., 1:12-cv-2406 (S.D.N.Y.) (the James Action). Between April 4, 2012 and May 24, 2012, four additional putative securities class actions were filed in the United States District Court for the Western District of North Carolina (Western District of North Carolina) captioned: Russell v. Swisher Hygiene, Inc., et al., 3:12-cv-216 (W.D.N.C.) (the Russell Action); Birch v. Swisher Hygiene, Inc., et al., 3:12-cv-221 (W.D.N.C.) (the Birch Action); Cohen v. Swisher Hygiene, Inc., et al., 3:12-cv-256 (W.D.N.C.) (the Cohen Action); and Falk v. Swisher Hygiene, Inc., et al., 3:12-cv-330 (W.D.N.C.) (all collectively, with the James Action, the Putative Securities Actions). The Putative Securities Actions allege violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995 (the PSLRA), 15 U.S.C. Â§Â§ 78j(b), 78t(a), and Rule 10b-5 promulgated thereunder, based on alleged false and misleading disclosures in Swisher public filings. On May 18, 2012, the Western District of North Carolina consolidated the Birch Action, the Cohen Action and the Russell Action. On May 30, 2012, Defendants filed a motion with the United States Judicial Panel on Multidistrict Litigation (the MDL Panel) to centralize the Putative Securities Actions and one additional derivative action in the Western District of North Carolina by requesting that the actions filed in the Southern District of New York be transferred to the Western District of North Carolina. In light of the motion to centralize t ruling. On June 4, 2012, the Southern District of New York adjourned all pending dates in the cases in light of the motion to transfer filed before the he cases in the Western District of North Carolina, Defendants requested from both courts a stay of all proceedings pending the MDL Panel MDL Panel. On June 13, 2012, the Western District of North Carolina issued a stay of proceedings pending a ruling by the MDL Panel. On August 13, 2012, the MDL Panel granted the motion to centralize, transferring the James Action to the Western District of North Carolina before Judge Graham C. Mullen (Judge Mullen or the Court) as part of MDL No. 2384, captioned In re Swisher Hygiene, Inc. Securities and Derivative Litigation. On August 21, 2012, Judge Mullen issued an order governing the practice and procedure in the actions transferred to the Western District of North Carolina, as well as the actions originally filed there (the Practice and Procedure Order). The Practice and Procedure Order ordered the Putative Class Actions to be consolidated for pretrial purposes (the Consolidated Class Action). On October 18, 2012, pursuant to the Practice and Procedure Order, the Western District of North Carolina held an Initial Pretrial Conference at which it appointed Block & Leviton LLP as lead counsel (Lead Counsel) and Caird and Stranch as Lead Plaintiffs for the Consolidated Class Action, and set a schedule for the filing of an amended consolidated class action complaint (the Class Action Complaint) and Defendants time to answer or otherwise respond to the Class Action Complaint. On February 20 and 21, 2013, Swisher issued restated Form 10-Qs for the first, second and third quarters of 2011 (the Restatement). On April 24, 2013, Lead Plaintiffs filed the Class Action Complaint asserting similar claims as those previously alleged, as well as additional allegations stemming from the Restatement. In preparing the Class Action Complaint, Lead Counsel engaged in an investigation of the claims asserted therein, including interviews of confidential witnesses, a review of news articles, analyst reports, filings with the Securities and Exchange Commission, an analysis of the restated financial results by a forensic accountant and other pertinent documents and sources. The Class Action Complaint also named the Company former Senior Vice President and Treasurer, Hugh Cooper (Cooper), as an additional defendant who has been dismissed from the Consolidated Class Action without prejudice. Counsel for the Parties to the Consolidated Class Action have engaged in arm-length discussions and negotiations concerning a possible settlement of the Consolidated Class Action. To facilitate those discussions, the Parties agreed to participate in a mediation with Judge Daniel Weinstein (Ret.) of JAMS serving as the mediator. In preparation for the mediation, the Parties engaged and consulted with their respective financial advisors regarding their respective damages analyses. On June 24, 2013, Defendants and Cooper moved to dismiss the Class Action Complaint. On June 25, 2013, one day after Defendants and Cooper filed their motions to dismiss and supporting briefs, the Parties exchanged confidential mediation statements that included their respective damages analyses. On July 1, 2013 and July 2, 2013, the Parties participated in two days of mediation with Judge Weinstein. At that time, the Parties were unable to reach a settlement. On July 22, 2013, Lead Plaintiffs filed their opposition brief to Defendants and Cooper motions to dismiss. On August 9, 2013, Defendants and Cooper filed their reply briefs in support of their motions to dismiss. Following the filing of the reply briefs, the Parties resumed settlement negotiations with the assistance of Judge Weinstein. After arm-length negotiations, counsel to the Parties in the Consolidated Class Action reached an agreement-in-principle concerning the proposed Settlement of the Consolidated Class Action.’