Homestore.Com Class Action Suit Settled
SACRAMENTO – The California State Teachers’ Retirement System, lead plaintiff in a class action lawsuit against Homestore.com, Inc., announced today a federal court judge has given final approval to a settlement of approximately $93 million. The suit accused Homestore.com Inc., an Internet real estate company, of falsifying financial statements and engaging in accounting irregularities in 2000 and 2001.
U.S. District Court Judge Marsha J. Pechman, in issuing her ruling March 16, also extended the deadline for class members to submit claim forms until May 31, 2004.
The settlement, reached between Homestore and the lead plaintiff, the California State Teachers’ Retirement System, was announced in August, 2003.
Pechman’s ruling finalizes that settlement, which calls for Homestore to reform its corporate policies, pay $13 million in cash to the class and turn over 20 million shares of stock. The stock currently is valued at about $4 a share.
The suit is being prosecuted on behalf of CalSTRS and the class by Cotchett, Pitre, Simon & McCarthy of Burlingame, California, lead counsel, and co-counsel Wasserman, Comden, Casselman & Pearson of Tarzana, California.
“We are delighted with this final approval,” said Jack Ehnes, chief executive officer of CalSTRS. “We are well on our way to our goal of recovering significant compensation for the members of the class. In addition, Homestore has agreed to unprecedented corporate governance protections for current stock holders.”
The settlement covers only Homestore.com Inc. Legal action is pending against other defendants in the case, including Stuart H. Wolff, former chief executive officer and chairman of the board; Peter B. Tafeen, former executive vice president, business development and sales; and PricewaterhouseCoopers, the accounting firm that audited Homestore’s financial statements.
The class covers all persons who purchased or acquired Homestore common stock during the period beginning January 1, 2000 through December 21, 2001. Class members are urged to visit www.homestoresettlement.com to obtain further information regarding the settlement and a claim form.
At $116 billion, CalSTRS is the third-largest public pension fund in the United States. It provides retirement, disability and survivor benefits to California’s public school teachers from kindergarten through community college, serving more than 735,000 members and their families. CalSTRS is a defined benefit plan, with guaranteed, lifetime benefits, which are not dependent on the performance of the investment portfolio.
Click here for a copy of the settlement order.