Cases

On January 29, 2013, the Hon. Esther Salas of the U.S. District Court for the District of New Jersey (the "Court") gave preliminary approval to an $8.1 million settlement between the court-appointed lead plaintiff in the lawsuit, Louisiana Municipal Police Employees' Retirement Systems ("LAMPERS"), and defendants Par Pharmaceutical Companies, Inc. ("Par" or the "Company"), former CEO Scott Tarriff and former CFO Dennis J. O'Connor. Judge Salas's preliminary approval order is available here.

This securities class action accused the defendants of misleading investors about Par's accounting practices and overstating its revenue, which led to a significant drop in the price its stock and required a restatement of the Company's financial statements. Berman DeValerio is lead counsel. Partners Norman Berman and Bryan Wood headed the firm's litigation team, which included Associate Justin Saif.

Further Information on Settlement and Claims Process

The Court appointed A.B. Data, Ltd. to serve as the claims administrator for the settlement.  A.B. Data is in the process mailing a Notice and Proof of Claim and Release form to members of the class and has set up a website at www.ParSecuritiesLitigation.com to make further information about the claims process and settlement available.  The Notice is available here, and the Proof of Claim and Release form is available here. 

In order to participate in the distribution of the settlement, you must submit a proof of claim form to the claims administrator's office, postmarked no later than August 2, 2013, at the following address:

Par Pharmaceutical Securities Litigation

Claims Administrator

c/o A.B. Data, Ltd.

PO Box 170500

Milwaukee, WI 53217-8091

If you have any questions about your claim form or the claims process, please contact representatives of A.B. Data at info@ParSecuritiesLitigation.com or 866-217-4459.

Previous Events in the Case

This class action sidestepped a major roadblock in 2011 when LAMPERS stepped forward to replace the previously appointed lead plaintiffs.

Judge Salas's August 11, 2011 order appointing LAMPERS as lead plaintiff kept the case moving toward trial after the original lead plaintiffs proved unable or unwilling to continue in the role, a development that could have stalled the case. In her order, Judge Salas also appointed Berman DeValerio sole lead counsel in the litigation.

Previously, in a September 30, 2009 opinion, the Hon. Peter G. Sheridan had ruled that investors could proceed with claims against the Company and individual defendants Tarriff and O'Connor. In that same opinion, the judge dismissed claims against Kenneth I. Sawyer, the Company's former board chairman, CEO and president.

The operative complaint in this action is the lead plaintiffs' Second Consolidated Amended Complaint (the "Second Amended Complaint"), which was filed on July 23, 2008.

The Second Amended Complaint alleges violations of sections 10(b) and 20(a) of the Exchange Act of 1934 and the rules and regulations promulgated thereunder, including the U.S. Securities and Exchange Commission Rule 10b-5, and seeks damages for violations of these federal securities laws on behalf of all investors who purchased the securities of Par from July 23, 2001 through and including July 5, 2006 (the "Class Period").

The lead plaintiffs claim that Par employed flawed and defective accounting practices that caused the Company to overstate revenues by up to $55 million. Par admitted that the overstatement of its revenues resulted in overpayments to business partners. By failing to properly report account receivable reserves, Par made materially false and misleading statements in its financial statements and will now have to restate its historical statements for fiscal years 2004 and 2005 and the first quarter of 2006. In addition, Par will write off inventory in an amount up to $15 million due to the flawed inventory procedures.

Following Par's disclosure, on July 6, 2006, Par's stock fell $4.78 per share, losing nearly 26% of its value in one day on extremely high volume of over 9 million shares traded.

On December 14, 2006, Par announced that the restatement had expanded to include periods prior to 2004 and would require the Company to reduce previously reported revenues and earnings by at least $84 million through the first quarter of fiscal 2006. On March 13, 2007, Par filed an amended Annual Report on its Form 10-K for fiscal year 2005 which included the restated financial statements for 2001, 2002, 2003, 2004 and 2005.