NEW YORK, Nov. 8 (GenomeWeb News) - Plaintiffs have dismissed class-action and derivative lawsuits filed against PerkinElmer, the company said today.
The suits, filed separately in July 2002 and June 2004 in US District Court in Boston, alleged PerkinElmer misled shareholders between July 2001 and April 2002 about the company's financial health. At the time, the company said it would contest the actions "vigorously."
"These allegations were, in our view, without merit," said Katherine O'Hara, PerkinElmer's general counsel, in today's statement.
A class-action lawsuit against PerkinElmer and some of its officers was filed in July 2002 on behalf of shareholders who purchased the company's common stock between July 15, 2001, and April 11, 2002, according to the "Legal Proceedings" section in PerkinElmer's latest quarterly filing with the Securities and Exchange Commission.
The plaintiffs alleged the management made misleading statements on the company's prospects and future operating results and sought an unspecified amount for damages. The suit claimed violations of Sections 10(b) and 20(a) of, and Rule 10b-5 under the Securities Exchange Act of 1934. Similar cases filed that month were consolidated in January 2003.
PerkinElmer tried unsuccessfully to have the suits dismissed in October 2003.
A purported derivative action filed against PerkinElmer officers and four of its directors in June 2004, also sought unspecified damages, according to the SEC filing. The plaintiffs accused the officers and directors of gross negligence, unjust enrichment, and breach of fiduciary duty, of loyalty, of contract, and of duty. The complaint made similar allegations to the class-action suit, as well as that the individuals engaged in insider trading, and that the board failed to establish and maintain an adequate system of internal controls.
The cases were consolidated in March 2005.
The complaints claimed that PerkinElmer misled investors by saying revenues and earnings were growing when the company faced declining demand in its Optoelectronics division, increasing expenses as a result of acquisitions and divestures, and millions of dollars of obsolete inventory, according to a statement released in July 2002 by the lawyers representing the plaintiffs.
PerkinElmer revealed first quarter earnings and fiscal year 2002 earnings on March 1, 2002, that was lower than was represented three weeks prior, according to the same statement. In addition, PerkinElmer insiders sold off 595,000 shares of common stock for $18.4 million prior to April 11, 2002, when the company revealed further details on declining earnings. PerkinElmer also acquired Packard Biosciences in November 2001 using its stock as currency.