Motorola Shareholders Obtain $200 Million Recovery in the Seventh Circuit
Once again, Robbins Geller has proven its ability to litigate a case up to the eve of trial in order to maximize a recovery for aggrieved shareholders. Motorola, Inc. (n/k/a as Motorola Solutions, Inc.) was once the world’s predominant manufacturer of mobile handsets.
During the class period, as alleged in the second amended complaint, the company’s ability to deliver new 3G handsets had become significantly compromised because Freescale Semiconductor, Inc., the company’s vendor for 3G chips, was unable to deliver key 3G chips that were functional and in viable commercial quantities, and thus, Motorola was unable to deliver the new 3G handsets to key customers around the globe in the fourth quarter of 2006. In addition, the company allegedly entered into two sham intellectual property transactions in the third quarter of 2006 with Freescale and Qualcomm, Inc., both of which were not appropriately disclosed and violated numerous provisions of generally accepted accounting principles, for the purpose of concealing the dramatic financial impact that Motorola’s 3G failings had on its reported financial statements. Motorola’s handset business, now Motorola Mobility, Inc., has never gained back the dominant market share for mobile handsets that it enjoyed between 2002 and 2006.
In December 2011, after four hard-fought years of litigation, Robbins Geller obtained a $200 million cash settlement from Motorola and certain of its former officers and its former Chairman of the Board. The $200 million settlement is the third largest in the history of the Seventh Circuit for a securities class action, and came on the heels of U.S. District Judge Amy J. St. Eve’s July 25, 2011 denial of defendants’ second motion for summary judgment in its entirety. According to Robbins Geller partner Samuel Rudman, “The settlement represents an extraordinary recovery for investors in a case where there is no financial restatement or SEC investigation. Our clients, the Macomb County Employees’ Retirement System and City of St. Clair Shores Police and Fire Retirement System, deserve all the credit. They alone sought to represent the class and they led the investigation and prosecution of the action from start to finish on behalf of Motorola shareholders.”
According to Tor Gronborg, the lead partner on the litigation team, “The $200 million settlement is just another example of how a dedicated team of Robbins Geller attorneys, paralegals and support staff painstakingly dedicated their work to bringing relevant evidence to bear concerning defendants’ liability, which led to the delivery of remarkable results for our clients and injured class members.” Jim E. Barz, a senior partner on the Motorola team, added, “We were really looking forward to trying this action to a jury before Judge St. Eve. The team worked extremely hard to prepare the case for trial, and their efforts continued up to the eve of settlement. While the trial team was disappointed that they did not get to try the case, the dedication and skills of the Robbins Geller attorneys involved in this action are reflected in the significant settlement obtained for the class.”
The litigation team at Robbins Geller Rudman & Dowd LLP, consisting of Michael J. Dowd, Tor Gronborg, Jim E. Barz and Trig Smith was responsible for obtaining this extraordinary settlement on behalf of the class.
Silverman v. Motorola, Inc., No. 07 C 4507 (N.D. Ill.).