One of the longest-running securities class actions has settled. The case against Cabletron Systems, Inc. was originally filed in the D. of N.H. in 1997. The plaintiffs alleged that the company hid problems with its main products and engaged in accounting fraud.
In a remarkable series of events, the case was dismissed in 1998 with leave to amend, reassigned several times after the original judge passed away, dismissed again in 2001, reinstated by the U.S. Court of Appeals for the First Circuit in 2002 (in a well-known opinion), and has since been bogged down in discovery and procedural disagreements. In the interim, Cabletron has been replaced with a successor company, Enterasys Networks, which is settling the suit.
According to Enterasys’ announcement, the preliminary settlement is for $10.5 million. All but $500,000 of that amount is expected to come from the proceeds of certain insurance policies. This is the second securities class action Enterasys has settled in the last fifteen months.