John Bullis: Get share of IGT lawsuit settlement
May 29, 2012
A $12.5 million settlement fund has been established to purchasers of IGT common stock, certain notes and options. It is for purchases between Nov. 1, 2007, and Oct. 30, 2008.
Page 2 of the notice explains “…case was brought … alleging that Defendants (IGT) made false and misleading statements and omissions between Nov. 1, 2007, and Oct. 30, 2008, about IGT’s gaming operations and true financial condition … [They] misrepresented that lower game play levels were due to ‘seasonality’ as opposed to the overall economic downturn and failed to disclose that IGT’s agreements with Harrah’s and CityCenter to use IGT’s new SB technology were not expected to generate revenue for several years. …” (Emphasis mine).
No payment from the net settlement fund of $12.5 million will be made unless a valid claim form is prepared, signed and mailed by Aug. 6.
Filling out the claim form can be a little difficult. Estimating how much might be involved for an investor is even more complicated due to the various dates and different fact situations possible.
However, if you or someone you know purchased IGT stock, certain notes, or options between Nov. 1, 2007, and Oct. 30, 2008, it will probably be worth the time and trouble to file a claim in a timely manner.
We did a claim form for some folks recently. The 100 shares of common stock purchased in the required time frame will apparently result in a payment to them of $624.
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I’m usually not a fan of the various class action suits. It seems to me the attorney firms that bring the suit end up getting paid a lot. In this case it looks like the attorney firm will ask for fees of 25 percent of the 25 percent settlement fund plus about $300,000 for expenses.
Of course the settlement fund is not very large compared to IGT’s overall earnings and assets. I’m guessing they can afford this extra expense very well. It is reported the market cap, or value of the company, is about $4.25 billion. For the fiscal year ended Sept. 29, 2011, the reported cash flow from operating activities was about $612.4 million.
If you know of someone that purchased IGT common stock between the dates indicated (or certain notes or options), you might encourage them to file the claim form so it is mailed before Aug. 6.
Did you hear, “It’s nice to know that when you help someone up a hill, you’re a little nearer the top yourself.”
• John Bullis is a certified public accountant, personal financial specialist and certified senior adviser serving Carson City for 45 years. He is founder emeritus of Bullis and Company CPAs, LLC.