Update Worldspace ‘Class Action’ will continue -
Worldspace ‘Class Action’ will continue
A Delaware Bankruptcy Court hearing took place late yesterday (March 19) to confirm the successful Worldspace bidder. At press time that looked likely to be a company controlled by Worldspace’s founder & CEO, Noah Samara, which submitted its $28m cash bid two weeks ago. However, there’s also the matter of a nasty Class Action that’s been rumbling on for some years against Mr Samara and Worldspace.
The Class Action asks Worldspace, Mr Samara and others, for damages resulting from “violations of certain Federal securities laws, and the Securities Act 1933” and relating to Worldspace’s IPO, and the IPO Prospectus.
On March 16 the Defendants in the action (Worldspace, Mr Samara and others) asked that the Class Action be “stayed” pending the completion of the Worldspace sale process. In essence the Class Action alleges that Samara and others inflated Worldspace’s subscriber data prior to the August 4 2005 IPO.
In a Motion before the Bankruptcy Court March 18, the Lead Plaintiff in the Class Action asked the Court that it order that no Worldspace documents be destroyed, abandoned or otherwise rendered unavailable following the transfer to its new owners. The Class Action would then continue.