Xerox Corporation Securities Litigation
With Johnson & Perkinson as one of Co-Lead Counsel, Plaintiffs litigated claims in the United States District Court for the District of Connecticut that alleges that Xerox and several of its top officers reported false financial results during the Class Period, failing to adhere to the standard accounting practices the company claimed to follow. The case is captioned Carlson v. Xerox Corp, et al., 3:00-CV-1621 (AWT). In particular, the Complaint says that Xerox: (a) improperly recognized revenues from its leasing operations by booking up front those lease payments attributable to future supplies and services; (b) boosted short-term results by overstating the value of future payments from leases that originated in developing countries; and (c) failed to write off mounting bad debts and improperly classified transactions in its Mexico operations. As a result, Plaintiffs alleged that Defendants artificially inflated the stock price of Xerox between February 9, 1998 through June 27, 2002, inclusive.
On July 13, 2005, the Court denied the Defendants' Motions to Dismiss the claims in Plaintiffs' Third Consolidated Amended Complaint. The parties then began the discovery process, during which counsel to Plaintiffs reviewed million of pages of documents produced by Defendants and began an extensive deposition program. The parties reached a Settlement Agreement, which provides that Defendants will pay $750 million to resolve Plaintiffs' claims. The Court preliminarily approved the settlement on March 27, 2008. The Court will hold a hearing on October 7, 2008 to determine whether the settlement should be finalized. If it receives final court approval, the recovery will be one of the top 10 largest securities class action settlements since passage of the Private Securities Litigation Reform Act of 1995. According to the proposed settlement, investors who purchased Xerox common stock and/or bonds from February 17, 1998, through June 27, 2002, inclusive, and lost money may be eligible to file claims.