The Spectranetics Corporation (Nasdaq: SPNC) today announced that it has agreed in principle to settle both the securities class action litigation pending against the company and certain of its current and former officers and directors and the stockholder derivative case naming the company as a nominal defendant and certain of its current and former officers and directors as defendants. The class action was brought on behalf of persons and entities who bought or acquired shares of Spectranetics' common stock between March 16, 2007 and September 4, 2008.
“I'm pleased that, upon approval by the Court, we can put the securities class action lawsuit and stockholder derivative case behind us and avoid the distraction and cost associated with protracted litigation”
Under the proposed class action settlement, the claims against Spectranetics and its officers and directors will be dismissed with prejudice and released in exchange for a cash payment of $8.5 million to be funded by Spectranetics' Insurers. The proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement, and approval by the U.S. District Court for the District of Colorado following notice to members of the class. Terms for distribution of the settlement fund to class members, less fees awarded by the court to class counsel, and other terms of the settlement will be disclosed in a notice to be sent to class members after preliminary court approval.
Under the terms of the proposed derivative settlement, plaintiffs (on their own behalf and derivatively on behalf of Spectranetics) will dismiss the stockholder derivative case with prejudice and release their claims in exchange for formalizing certain corporate governance procedures and payment of attorneys fees of $350,000. As with the class action settlement, the proposed settlement will be funded by Spectranetics' Insurers and remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement and approval by the U.S. District Court for the District of Colorado.
The Company and the individual defendants have steadfastly maintained that the claims raised in the class action litigation and stockholder derivative case were without merit, and have vigorously contested those claims. As part of the settlements, the Company and the individual defendants continue to deny any liability or wrongdoing under the securities laws.
"I'm pleased that, upon approval by the Court, we can put the securities class action lawsuit and stockholder derivative case behind us and avoid the distraction and cost associated with protracted litigation," said Emile J. Geisenheimer, Spectranetics' Chairman of the Board of Directors, President and Chief Executive Officer.
The Company also recently became aware that three Spectranetics stockholders filed an individual lawsuit on May 28, 2010 in the United States District Court for the District of Colorado asserting various federal and state claims arising out of the same facts alleged in the securities class action. Two of the three stockholders who brought this case had previously moved unsuccessfully to be appointed as lead plaintiff in the securities class action where they claimed a loss of $1.27 million. Spectranetics intends to defend this lawsuit vigorously.