Class Action Lawsuits Against Jennifer Convertibles Inc.
A series of 11 class actions were brought against Jennifer Convertibles, various of its present and former officers and directors, and certain third parties.
The complaints in all of these actions alleged that Jennifer Convertibles and the other defendants violated the Securities Exchange Act of 1934, when it ran a press release.
All of these class actions were consolidated into one case.
The case was filed in the United States District Court for the Eastern District of New York. The class action is found as Case No. 94 Civ. 5570.
Jennifer Convertibles and certain of its management became involved in class action and derivative litigations. The Securities and Exchange Commission commenced an investigation relating to the case.
A settlement has been reached to include attorney's fees, monetary payments, and the remaining portion of fees and expenses in "Preferred Stock". The Preferred Stock will have an aggregate value of $130, paying an annual dividend of 7% and convertible into Common Stock (at such time as Jennifer Convertibles's Common Stock trades at $7.00 per share or higher) at $7.00 per share.
This settlement is subject to final court approval.
Jennifer Convertibles, its directors, officers, accountants and consultants have been sued in a class action lawsuit. Jennifer Convertibles has signed a Memorandum of Understanding ("Derivative Memorandum") for the purpose of settling all of the claims involving those parties in the derivative litigation.
Jennifer Convertibles was sued in a derivative action, the case was brought by a Private Company. A Settlement Agreement has been signed and it is subject to court approval.
The Settlement Agreement will restructure the relationship between the Private Company and Jennifer Convertibles in order to reduce and eliminate conflicts of interest.
The Settlement Agreement may be terminated upon written notice by the Private Company if not previously approved by the Court.
The directors of Jennifer Convertibles have agreed to repay personal indebtedness in the amount of $1,300 each to the Private Company. There can be no assurance as to the terms of any such restructuring or that the parties will enter into a revised settlement agreement at all. Any such settlement would be subject to a number of conditions, including court approval.
Jennifer Convertibles and certain of its officers became defendants in class and derivative actions.
Further, in May 1995, the Securities and Exchange Commission commenced an investigation relating to the matters.