FairPoint Communications 2005 Annual Report Download - page 32
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Officer, certain of the Company’s current and former directors and certain of the Company’s stockholders. The complaint alleges violations of Sections 11
and 12(a)(2) and liability under Section 15 of the Securities Act, and alleges that the Company’s registration statement on Form S-1 (which was declared
effective by the SEC on February 3, 2005) and the related prospectus dated February 3, 2005, each relating to the Company’s initial public offering of
common stock, contained certain material misstatements and omitted certain material information necessary to be included relating to the Company’s
broadband products and access line trends. The plaintiff, who has been a plaintiff in several other securities cases, seeks rescission rights and unspecified
damages on behalf of a purported class of purchasers of the common stock “issued pursuant and/or traceable to the Company’s IPO during the period from
February 3, 2005 through March 21, 2005”. The Company removed the action to Federal Court. The plaintiff filed a motion to remand the action to the North
Carolina State Court, which was denied by the Federal Magistrate. The plaintiff has objected to and appealed the Magistrate’s decision to the District Court
Judge. The Company has contested the appeal and filed a Motion to Dismiss the action. The Magistrate, on February 9, 2006, issued a Memorandum and
Recommendation to the District Court Judge that the Motion to Dismiss be granted and that the complaint be dismissed with prejudice. The plaintiff has filed a
Notice of Objection to the Magistrate’s Recommendation. Both the appeal of denial of the Motion to Remand and the Motion to Dismiss are pending before the
District Court Judge. The Company believes that this action is without merit and intends to continue to defend the litigation vigorously.
We currently and from time to time are involved in other litigation and regulatory proceedings incidental to the conduct of our business, but currently we
are not a party to any lawsuit or proceeding which, in our opinion, is likely to have a material adverse effect on us.
No matters were submitted to a vote of our security holders during the fourth quarter of fiscal 2005.
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