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1
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MEMORANDUM OPINION AND ORDER
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EXTRACTED KEY WORDS
DEFENDANTS PLAINTIFFS AETHERWORKS COURT ESQ DEP SECURITIES EXCHANGE ACT AETHERWORKS TRANSACTION ACCOUNTING YORK COOPERS EQUITY METHOD STATE EMPLOYEES RETIREMENT BADER EMPLOYEES RETIREMENT SYSTEM PLAINTIFF LOUISIANA STATE MINNESOTA MINNEAPOLIS SECURITIES LITIGATION CONVERTIBLE NOTES INVESTMENT LEE SQUITIERI WOLF POPPER ROSS WASHINGTON AVENUE SOUTH RULE LOB-5 AGREEMENT WALTON BADER DISCLOSURE SECURED CONVERTIBLE NOTES |
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
Civil No. 97-5 (DWF/RLE)
In re Digi International Inc.
Securities Litigation
MEMORANDUM
OPINION AND ORDER
Richard A. Lockridge, Esq., Gregg Fishbein, Esq., and Gregory J. Myers, Esq., Lockridge
Grindal Nauen, 100 Washington Avenue South, Suite 2200, Minneapolis, Minnesota 55401;
Robert M. Kornreich, Esq., Wolf Popper Ross Wolf & Jones, 12h Floor, 845 Third Avenue, New
York, New York 10022; and Lee Squitieri, Esq., Abbey, Gardy & Squitieri, 212 East 39* Street,
New York, New York 10016, for Plaintiffs.
Harold B. Koritz, Esq. and William G. Cottrell, Esq., John A. Halpern & Associates, 500
Plymouth Building, Minneapolis, Minnesota 55402; and I. Walton Bader, Esq., Bader and Bader,
65 Court Street, Whte Plains, New York 10601; for Plaintiff Louisiana State Employees
Retirement Systems.
Wendy J. Wildug, Esq. and h a
M. Thoresen Severts, Esq., Faegre & Benson, 90 South
Seventh Street, Suite 2200, Minneapolis, Minnesota 55402, for Defendants.
Introduction
..
M ,&-
This action arises under Sections lo@) and 20(a) of the Securities Exchange Act of 1934.
-
Plaintiff Louisiana State Employees Retirement System ("LSERS") and the putative class
plaintiffs (collectively, `Tlaintiffs") allege that Defendants Digi International; Inc.
former corporate officers Ervin F. Kamm, Jr., and Gerald A. Wall artificially inflated Digi's
earnings during the class period by using improper accouiting methods to misrepresent Digi's
investment in AetherWorks Corporation ("AetherWorks").
AUG 1 7
FILED FRANCIS E. DC
JUDGMENT ENTD
DEPUTY CLERK
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2
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COMPLAINT
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EXTRACTED KEY WORDS
DEFENDANTS REPORT FUDDRUCKERS SECURITIES SALES COMMON STOCK EXCHANGE CLASS ACTION ANALYSTS RESTAURANTS ACT PLAINTIFFS DEFENDANT BAUMHAUER CLASS PERIOD CHAMPPS MATERIALLY FALSE MISLEADING MANAGEMENT COMMUNICATIONS ROBERTSON STEPHENS ALLEGATIONS MASSACHUSETTS SUCCESSFUL PIPER JAFFRAY NEGATIVELY IMPACT FUDDRUCKERS FOODSERVICE INTER ALIA CONFERENCE SHAREHOLDERS |
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MASSACHUSETTS
___________________________________
)
RITA VENTURINO, COSMOS PHILLIPS ) Civil Action No. 96-12109
and MATTHEW MINOGUE on behalf )
of themselves and all others )
similarly situated, )
) CLASS ACTION COMPLAINT
Plaintiffs, )
)
v. )
) PLAINTIFFS DEMAND A
DAKA INTERNATIONAL, INC. and ) TRIAL BY JURY
WILLIAM H. BAUMHAUER, )
)
Defendants. )
___________________________________)
Plaintiffs, by their attorneys, for their Class Action
Complaint, make the following allegations upon personal knowledge
as to themselves and their own acts and as to all other matters
upon information and belief based upon, inter alia, the
investigation made by and through their attorneys, which
investigation has included a review of the public filings of DAKA
International, Inc. ("DAKA" or the "Company") with the Securities
and Exchange Commission ("SEC"), published reports and news
articles regarding DAKA and other reliable sources derived from
plaintiffs, investigation. Plaintiffs believe that further
substantial evidentiary support will exist for the allegations
set forth below after a reasonable opportunity for discovery.
__________________________________________________________________________
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3
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DOCKET
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EXTRACTED KEY WORDS
MOTION ENTRY MINOGUE MATTHEW COSMOS PHILLIPS RITA VENTURINO JUDGE GEORGE ENTERED CC/CL EXTEND TIME BAUMHAUER WILLIAM MEMORANDUM COUNSEL APPROVE GRANTING COMPLAINT SETTLEMENT DISMISS SUPPORT SELECTION APPOINTMENT AFFIDAVIT FUNDS DISTRIBUTION DUMAIN SANFORD FEES COURT PLAINTIFFS |
Case docket was last updated on: 11/03/99.
Docket as of November 3, 1999 10:22 pm Page 1
Proceedings include all events.
1:96cv12109 Venturino, et al v. Daka International, et al CLOSED
CLOSED
U.S. District Court
U.S. District Court - Massachusetts (Boston)
CIVIL DOCKET FOR CASE #: 96-CV-12109
Venturino, et al v. Daka International, et al Filed: 10/18/96
Assigned to: Judge George A. O'Toole, Jr. Jury demand: Plaintiff
Demand: $0,000 Nature of Suit: 850
Lead Docket: None Jurisdiction: Federal Question
Dkt# in other court: None
Cause: 15:78m(a) Securities Exchange Act
RITA VENTURINO Edward F. Haber
Plaintiff (COR LD NTC)
Shapiro, Grace & Haber
75 State Street
Boston, MA 02109
617-439-3939
Sanford P. Dumain
(COR LD NTC)
Milberg, Weiss, Bershad, Hynes
& Lerach
One Penn Plaza
New York City, NY 10002
David J. Bershad
(COR LD NTC)
Jerome M. Congress
(COR LD NTC)
Salvatore J. Graziano
(COR LD NTC)
Milberg Weiss Bershad Hynes &
Lerach LLP
One Pennsylvania Plaza
49th Floor
New York, NY 10119
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4
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MEMORANDUM OPINION AND ORDER 2
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EXTRACTED KEY WORDS
PLAINTIFFS ALLEGATIONS DIGI COURT ACT COMPLAINT FRAUD CLASS PLAINTIFFS LSERS ALLEGE STOCK AETHERWORKS SECURITIES FRAUD VIOLATION REFORM ACT DISCLOSURES COMMON-LAW AETHERWORKS INVESTMENT MISLEADING ACCOUNTING PARTICULARITY CONTROLLING EQUITY METHOD CLASS PERIOD AMENDED COMPLAINT UNITED STATES DISTRICT SALES PROGRAM COMPENSATION INSUFFICIENT |
UNITED STATES DISTRICT COURT
DISTRICT OF MINNESOTA
In re DIGI INTERNATIONAL INC.
SECURITIES LITIGATION
________________________________________
)
)
)
)
)
)
Civil Master File No.
97-5 (JRT/RLE)
(filed May 22, 1998)
MEMORANDUM OPINION
AND ORDER
This action involves allegations of securities fraud. In a
consolidated amended complaint, a putative class of persons who
purchased Defendant Digi International, Inc.'s ("Digi") stock between
January 25, 1996 and December 23, 1996 ("class plaintiffs") allege
securities fraud under Section 10(b) of the Securities Exchange Act of
1934, 15 U.S.C. § 78j(b), and Rule 10b-5 promulgated thereunder, 17
C.F.R. § 240.10b-5, and controlling person liability under Section
20(a) of the 1934 Act, 15 U.S.C. § 78t(a). In a separate amended
complaint, the Louisiana State Employees Retirement System ("LSERS"),
a purchaser of Digi stock proceeding individually, alleges similar
violations under sections 10(b) and 20(a). LSERS brings additional
claims under Section 18(a) of the 1934 Act, 15 U.S.C. § 78r(a), and
pursuant to the Minnesota common-law theories of fraud and negligent
misrepresentation. Class plaintiffs and LSERS (collectively
"plaintiffs") claim, in essence, that defendants Digi, Ervin F. Kamm,
Jr., Gerald A. Wall, and Gary L. Deaner (collectively "defendants")
knowingly or recklessly used improper accounting methods which allowed
Digi to report artificially inflated earnings and concealed various
material facts which would have informed the public of Digi's true
financial condition during the relevant time period.
Defendants have brought two motions to dismiss. In their first motion,
defendants move to dismiss the class plaintiffs' complaint on the
grounds that the Complaint fails to meet the pleading standards of the
Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(b)
("Reform Act"), and Fed. R. Civ. P. 9(b) ("Rule 9(b)"), and fails to
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