Lexmark to pay $12 million in Class Action
May 12, 2020
The initial complaint was filed in July 2017, and alleged that during the classified period, Lexmark made materially false and/or misleading statements, and/or failed to disclose material information, about its business and prospects.
On 21 July 2015, Lexmark reported poor results for its second quarter ending 30 June 2015, and lowered its 2015 sales guidance. Lexmark revealed that its supplies growth was not attributable to end-user demand but rather the result of its European customers buying ahead of customary price increases, which produced excessive inventory.
Following this news, Lexmark’s stock price dropped materially, which caused investors harm.
According to the complaint, throughout the above mentioned period, Lexmark made materially false and/or misleading statements, and/or failed to disclose, that: end-user demand and growth for the company’s supplies business was deteriorating; that pricing increases were the primary driver of supplies revenue growth, not end-user demand; that customers in the supplies channel reacted by buying ahead of anticipated pricing increases; and that as a result, there were excessive inventory levels at its European wholesale distributors.
On 21 July 2015, Lexmark reported poor results for its second quarter ending 30 June 2015 and lowered its 2015 sales guidance. The company revealed its supplies growth was not attributable to end-user demand but rather the result of its European customers buying ahead of customary price increases which produced excessive inventory. Upon release of this news, shares of Lexmark fell in value materially, which caused investors harm according to the complaint.
Following several rounds of negotiations aided by the mediator, the Parties reached an agreement to settle the Litigation for $12 million (€11.09 million) in cash, inclusive of attorneys’ fees and expenses, award to the Lead Plaintiff, and administrative and other settlement costs, subject to the negotiation of the terms of a Stipulation and approval by the Court.
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