IWOV » Topics » Litigation

These excerpts taken from the IWOV 10-K filed Mar 13, 2009.
Litigation
 
Beginning in 2001, the Company and certain of its officers and directors and certain investment banking firms were named as defendants in a securities class action lawsuit brought in the Southern District of New York. This case is one of several hundred similar cases that have been consolidated into a single action in that court. The case alleges misstatements and omissions concerning underwriting practices in connection with the Company’s public offerings. The plaintiff seeks damages in an unspecified amount. In October 2002, the Company’s officers were dismissed without prejudice as defendants in the lawsuit. In February 2003, the District Court denied a motion to dismiss by all parties. Although the Company believes that the plaintiffs’ claims have no merit, in July 2003, the Company decided to participate in a proposed settlement to avoid the cost and distraction of continued litigation. A settlement proposal was preliminarily approved by the District Court. However, in December 2006, the Court of Appeals reversed the District Court’s finding that six focus cases could be certified as class actions. In April 2007, the Court of Appeals denied the plaintiffs’ petition for rehearing, but acknowledged that the District Court might certify a more limited class. At a June 2007 status conference, the District Court terminated the proposed settlement as stipulated among the parties. In August 2007, plaintiffs filed an amended complaint in the six focus cases to test the sufficiency of their allegations. On September 27, 2007, plaintiffs filed a motion for class certification in the six focus cases, which was withdrawn on October 10, 2008. In November 2007, defendants in the focus cases filed a motion to dismiss the complaint for failure to state a claim, which the District Court denied in March 2008. Plaintiffs, the issuer defendants (including the Company), the underwriter defendants, and the insurance carriers for the defendants, have engaged in mediation and settlement negotiations. The parties have reached a settlement agreement in principle. As part of this tentative settlement, the Company’s insurance carrier has agreed to assume the Company’s entire payment obligation under the terms of the settlement. Although the parties have reached a tentative settlement agreement, there can be no guarantee that it will be finalized or receive approval from the District Court. If the tentative settlement is not implemented and the litigation continues against the Company, the Company would continue to defend itself vigorously. Any liability the Company incurs in connection with this lawsuit could materially harm its business and financial position and, even if it defends itself successfully, there is a risk that management’s distraction in dealing with this lawsuit could harm its results. In addition, in October 2007, a lawsuit was filed in the United States District Court for the Western District of Washington by Vanessa Simmonds, captioned Simmonds v. Bank of America Corp., No. 07-1585, alleging that the underwriters of the Company’s initial public offering violated section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. section 78p(b), by engaging in short-swing trades, and seeks disgorgement to the Company of profits in amounts to be proven at trial from the underwriters. In February 2008, Ms. Simmonds filed an amended complaint. The suit names the Company as a nominal defendant, contains no claims against the Company, and seeks no relief from the Company. This lawsuit is one of more than fifty similar actions filed in the same court. On July 25, 2008, the underwriter defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. In addition, certain issuer defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. The parties entered into a stipulation, entered as an order by the Court that the Company is not required to answer or otherwise respond to the amended complaint. Accordingly, the Company did not join the motion to dismiss filed by certain issuers. There was a hearing on the motions to dismiss on January 16, 2009. On March 12, 2009, the court dismissed the complaint in this lawsuit with prejudice. The deadline for Ms. Simmonds to appeal the court’s dismissal order is April 13, 2009.


79


Table of Contents

 
INTERWOVEN, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
From time to time, in addition to those identified above, the Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment and other matters. In accordance with generally accepted accounting principles in the United States of America, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, the Company believes that it has valid defenses with respect to the legal matters pending against the Company. It is possible, nevertheless, that the Company’s consolidated financial position, cash flows or results of operations could be affected by the resolution of one or more of such contingencies.
 
13.   Stockholders’ Equity
 
Litigation
 
Beginning in 2001, the Company and certain of its officers and directors and certain investment banking firms were named as defendants in a securities class action lawsuit brought in the Southern District of New York. This case is one of several hundred similar cases that have been consolidated into a single action in that court. The case alleges misstatements and omissions concerning underwriting practices in connection with the Company’s public offerings. The plaintiff seeks damages in an unspecified amount. In October 2002, the Company’s officers were dismissed without prejudice as defendants in the lawsuit. In February 2003, the District Court denied a motion to dismiss by all parties. Although the Company believes that the plaintiffs’ claims have no merit, in July 2003, the Company decided to participate in a proposed settlement to avoid the cost and distraction of continued litigation. A settlement proposal was preliminarily approved by the District Court. However, in December 2006, the Court of Appeals reversed the District Court’s finding that six focus cases could be certified as class actions. In April 2007, the Court of Appeals denied the plaintiffs’ petition for rehearing, but acknowledged that the District Court might certify a more limited class. At a June 2007 status conference, the District Court terminated the proposed settlement as stipulated among the parties. In August 2007, plaintiffs filed an amended complaint in the six focus cases to test the sufficiency of their allegations. On September 27, 2007, plaintiffs filed a motion for class certification in the six focus cases, which was withdrawn on October 10, 2008. In November 2007, defendants in the focus cases filed a motion to dismiss the complaint for failure to state a claim, which the District Court denied in March 2008. Plaintiffs, the issuer defendants (including the Company), the underwriter defendants, and the insurance carriers for the defendants, have engaged in mediation and settlement negotiations. The parties have reached a settlement agreement in principle. As part of this tentative settlement, the Company’s insurance carrier has agreed to assume the Company’s entire payment obligation under the terms of the settlement. Although the parties have reached a tentative settlement agreement, there can be no guarantee that it will be finalized or receive approval from the District Court. If the tentative settlement is not implemented and the litigation continues against the Company, the Company would continue to defend itself vigorously. Any liability the Company incurs in connection with this lawsuit could materially harm its business and financial position and, even if it defends itself successfully, there is a risk that management’s distraction in dealing with this lawsuit could harm its results. In addition, in October 2007, a lawsuit was filed in the United States District Court for the Western District of Washington by Vanessa Simmonds, captioned Simmonds v. Bank of America Corp., No. 07-1585, alleging that the underwriters of the Company’s initial public offering violated section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. section 78p(b), by engaging in short-swing trades, and seeks disgorgement to the Company of profits in amounts to be proven at trial from the underwriters. In February 2008, Ms. Simmonds filed an amended complaint. The suit names the Company as a nominal defendant, contains no claims against the Company, and seeks no relief from the Company. This lawsuit is one of more than fifty similar actions filed in the same court. On July 25, 2008, the underwriter defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. In addition, certain issuer defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. The parties entered into a stipulation, entered as an order by the Court that the Company is not required to answer or otherwise respond to the amended complaint. Accordingly, the Company did not join the motion to dismiss filed by certain issuers. There was a hearing on the motions to dismiss on January 16, 2009. On March 12, 2009, the court dismissed the complaint in this lawsuit with prejudice. The deadline for Ms. Simmonds to appeal the court’s dismissal order is April 13, 2009.


79


Table of Contents

 
INTERWOVEN, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
From time to time, in addition to those identified above, the Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment and other matters. In accordance with generally accepted accounting principles in the United States of America, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, the Company believes that it has valid defenses with respect to the legal matters pending against the Company. It is possible, nevertheless, that the Company’s consolidated financial position, cash flows or results of operations could be affected by the resolution of one or more of such contingencies.
 
13.   Stockholders’ Equity
 
Litigation
 
Beginning in 2001, the Company and certain of its officers and directors and certain investment banking firms were named as defendants in a securities class action lawsuit brought in the Southern District of New York. This case is one of several hundred similar cases that have been consolidated into a single action in that court. The case alleges misstatements and omissions concerning underwriting practices in connection with the Company’s public offerings. The plaintiff seeks damages in an unspecified amount. In October 2002, the Company’s officers were dismissed without prejudice as defendants in the lawsuit. In February 2003, the District Court denied a motion to dismiss by all parties. Although the Company believes that the plaintiffs’ claims have no merit, in July 2003, the Company decided to participate in a proposed settlement to avoid the cost and distraction of continued litigation. A settlement proposal was preliminarily approved by the District Court. However, in December 2006, the Court of Appeals reversed the District Court’s finding that six focus cases could be certified as class actions. In April 2007, the Court of Appeals denied the plaintiffs’ petition for rehearing, but acknowledged that the District Court might certify a more limited class. At a June 2007 status conference, the District Court terminated the proposed settlement as stipulated among the parties. In August 2007, plaintiffs filed an amended complaint in the six focus cases to test the sufficiency of their allegations. On September 27, 2007, plaintiffs filed a motion for class certification in the six focus cases, which was withdrawn on October 10, 2008. In November 2007, defendants in the focus cases filed a motion to dismiss the complaint for failure to state a claim, which the District Court denied in March 2008. Plaintiffs, the issuer defendants (including the Company), the underwriter defendants, and the insurance carriers for the defendants, have engaged in mediation and settlement negotiations. The parties have reached a settlement agreement in principle. As part of this tentative settlement, the Company’s insurance carrier has agreed to assume the Company’s entire payment obligation under the terms of the settlement. Although the parties have reached a tentative settlement agreement, there can be no guarantee that it will be finalized or receive approval from the District Court. If the tentative settlement is not implemented and the litigation continues against the Company, the Company would continue to defend itself vigorously. Any liability the Company incurs in connection with this lawsuit could materially harm its business and financial position and, even if it defends itself successfully, there is a risk that management’s distraction in dealing with this lawsuit could harm its results. In addition, in October 2007, a lawsuit was filed in the United States District Court for the Western District of Washington by Vanessa Simmonds, captioned Simmonds v. Bank of America Corp., No. 07-1585, alleging that the underwriters of the Company’s initial public offering violated section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. section 78p(b), by engaging in short-swing trades, and seeks disgorgement to the Company of profits in amounts to be proven at trial from the underwriters. In February 2008, Ms. Simmonds filed an amended complaint. The suit names the Company as a nominal defendant, contains no claims against the Company, and seeks no relief from the Company. This lawsuit is one of more than fifty similar actions filed in the same court. On July 25, 2008, the underwriter defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. In addition, certain issuer defendants in the various actions filed a joint motion to dismiss the complaints for failure to state a claim. The parties entered into a stipulation, entered as an order by the Court that the Company is not required to answer or otherwise respond to the amended complaint. Accordingly, the Company did not join the motion to dismiss filed by certain issuers. There was a hearing on the motions to dismiss on January 16, 2009. On March 12, 2009, the court dismissed the complaint in this lawsuit with prejudice. The deadline for Ms. Simmonds to appeal the court’s dismissal order is April 13, 2009.


79


Table of Contents

 
INTERWOVEN, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
From time to time, in addition to those identified above, the Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment and other matters. In accordance with generally accepted accounting principles in the United States of America, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, the Company believes that it has valid defenses with respect to the legal matters pending against the Company. It is possible, nevertheless, that the Company’s consolidated financial position, cash flows or results of operations could be affected by the resolution of one or more of such contingencies.
 
13.   Stockholders’ Equity
 
Litigation


 



Beginning in 2001, the Company and certain of its officers and
directors and certain investment banking firms were named as
defendants in a securities class action lawsuit brought in the
Southern District of New York. This case is one of several
hundred similar cases that have been consolidated into a single
action in that court. The case alleges misstatements and
omissions concerning underwriting practices in connection with
the Company’s public offerings. The plaintiff seeks damages
in an unspecified amount. In October 2002, the Company’s
officers were dismissed without prejudice as defendants in the
lawsuit. In February 2003, the District Court denied a motion to
dismiss by all parties. Although the Company believes that the
plaintiffs’ claims have no merit, in July 2003, the Company
decided to participate in a proposed settlement to avoid the
cost and distraction of continued litigation. A settlement
proposal was preliminarily approved by the District Court.
However, in December 2006, the Court of Appeals reversed the
District Court’s finding that six focus cases could be
certified as class actions. In April 2007, the Court of Appeals
denied the plaintiffs’ petition for rehearing, but
acknowledged that the District Court might certify a more
limited class. At a June 2007 status conference, the District
Court terminated the proposed settlement as stipulated among the
parties. In August 2007, plaintiffs filed an amended complaint
in the six focus cases to test the sufficiency of their
allegations. On September 27, 2007, plaintiffs filed a
motion for class certification in the six focus cases, which was
withdrawn on October 10, 2008. In November 2007, defendants
in the focus cases filed a motion to dismiss the complaint for
failure to state a claim, which the District Court denied in
March 2008. Plaintiffs, the issuer defendants (including the
Company), the underwriter defendants, and the insurance carriers
for the defendants, have engaged in mediation and settlement
negotiations. The parties have reached a settlement agreement in
principle. As part of this tentative settlement, the
Company’s insurance carrier has agreed to assume the
Company’s entire payment obligation under the terms of the
settlement. Although the parties have reached a tentative
settlement agreement, there can be no guarantee that it will be
finalized or receive approval from the District Court. If the
tentative settlement is not implemented and the litigation
continues against the Company, the Company would continue to
defend itself vigorously. Any liability the Company incurs in
connection with this lawsuit could materially harm its business
and financial position and, even if it defends itself
successfully, there is a risk that management’s distraction
in dealing with this lawsuit could harm its results. In
addition, in October 2007, a lawsuit was filed in the United
States District Court for the Western District of Washington by
Vanessa Simmonds, captioned Simmonds v. Bank of
America Corp.
,
No. 07-1585,
alleging that the underwriters of the Company’s initial
public offering violated section 16(b) of the Securities
Exchange Act of 1934, 15 U.S.C. section 78p(b), by
engaging in short-swing trades, and seeks disgorgement to the
Company of profits in amounts to be proven at trial from the
underwriters. In February 2008, Ms. Simmonds filed an
amended complaint. The suit names the Company as a nominal
defendant, contains no claims against the Company, and seeks no
relief from the Company. This lawsuit is one of more than fifty
similar actions filed in the same court. On July 25, 2008,
the underwriter defendants in the various actions filed a joint
motion to dismiss the complaints for failure to state a claim.
In addition, certain issuer defendants in the various actions
filed a joint motion to dismiss the complaints for failure to
state a claim. The parties entered into a stipulation, entered
as an order by the Court that the Company is not required to
answer or otherwise respond to the amended complaint.
Accordingly, the Company did not join the motion to dismiss
filed by certain issuers. There was a hearing on the motions to
dismiss on January 16, 2009. On March 12, 2009, the
court dismissed the complaint in this lawsuit with prejudice.
The deadline for Ms. Simmonds to appeal the court’s
dismissal order is April 13, 2009.





79





Table of Contents





 




INTERWOVEN,
INC.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



From time to time, in addition to those identified above, the
Company is subject to legal proceedings, claims, investigations
and proceedings in the ordinary course of business, including
claims of alleged infringement of third-party patents and other
intellectual property rights, commercial, employment and other
matters. In accordance with generally accepted accounting
principles in the United States of America, the Company makes a
provision for a liability when it is both probable that a
liability has been incurred and the amount of the loss can be
reasonably estimated. These provisions are reviewed at least
quarterly and are adjusted to reflect the impacts of
negotiations, settlements, rulings, advice of legal counsel and
other information and events pertaining to a particular matter.
Litigation is inherently unpredictable. However, the Company
believes that it has valid defenses with respect to the legal
matters pending against the Company. It is possible,
nevertheless, that the Company’s consolidated financial
position, cash flows or results of operations could be affected
by the resolution of one or more of such contingencies.


 















13.  

Stockholders’
Equity



 




Litigation


 



Beginning in 2001, the Company and certain of its officers and
directors and certain investment banking firms were named as
defendants in a securities class action lawsuit brought in the
Southern District of New York. This case is one of several
hundred similar cases that have been consolidated into a single
action in that court. The case alleges misstatements and
omissions concerning underwriting practices in connection with
the Company’s public offerings. The plaintiff seeks damages
in an unspecified amount. In October 2002, the Company’s
officers were dismissed without prejudice as defendants in the
lawsuit. In February 2003, the District Court denied a motion to
dismiss by all parties. Although the Company believes that the
plaintiffs’ claims have no merit, in July 2003, the Company
decided to participate in a proposed settlement to avoid the
cost and distraction of continued litigation. A settlement
proposal was preliminarily approved by the District Court.
However, in December 2006, the Court of Appeals reversed the
District Court’s finding that six focus cases could be
certified as class actions. In April 2007, the Court of Appeals
denied the plaintiffs’ petition for rehearing, but
acknowledged that the District Court might certify a more
limited class. At a June 2007 status conference, the District
Court terminated the proposed settlement as stipulated among the
parties. In August 2007, plaintiffs filed an amended complaint
in the six focus cases to test the sufficiency of their
allegations. On September 27, 2007, plaintiffs filed a
motion for class certification in the six focus cases, which was
withdrawn on October 10, 2008. In November 2007, defendants
in the focus cases filed a motion to dismiss the complaint for
failure to state a claim, which the District Court denied in
March 2008. Plaintiffs, the issuer defendants (including the
Company), the underwriter defendants, and the insurance carriers
for the defendants, have engaged in mediation and settlement
negotiations. The parties have reached a settlement agreement in
principle. As part of this tentative settlement, the
Company’s insurance carrier has agreed to assume the
Company’s entire payment obligation under the terms of the
settlement. Although the parties have reached a tentative
settlement agreement, there can be no guarantee that it will be
finalized or receive approval from the District Court. If the
tentative settlement is not implemented and the litigation
continues against the Company, the Company would continue to
defend itself vigorously. Any liability the Company incurs in
connection with this lawsuit could materially harm its business
and financial position and, even if it defends itself
successfully, there is a risk that management’s distraction
in dealing with this lawsuit could harm its results. In
addition, in October 2007, a lawsuit was filed in the United
States District Court for the Western District of Washington by
Vanessa Simmonds, captioned Simmonds v. Bank of
America Corp.
,
No. 07-1585,
alleging that the underwriters of the Company’s initial
public offering violated section 16(b) of the Securities
Exchange Act of 1934, 15 U.S.C. section 78p(b), by
engaging in short-swing trades, and seeks disgorgement to the
Company of profits in amounts to be proven at trial from the
underwriters. In February 2008, Ms. Simmonds filed an
amended complaint. The suit names the Company as a nominal
defendant, contains no claims against the Company, and seeks no
relief from the Company. This lawsuit is one of more than fifty
similar actions filed in the same court. On July 25, 2008,
the underwriter defendants in the various actions filed a joint
motion to dismiss the complaints for failure to state a claim.
In addition, certain issuer defendants in the various actions
filed a joint motion to dismiss the complaints for failure to
state a claim. The parties entered into a stipulation, entered
as an order by the Court that the Company is not required to
answer or otherwise respond to the amended complaint.
Accordingly, the Company did not join the motion to dismiss
filed by certain issuers. There was a hearing on the motions to
dismiss on January 16, 2009. On March 12, 2009, the
court dismissed the complaint in this lawsuit with prejudice.
The deadline for Ms. Simmonds to appeal the court’s
dismissal order is April 13, 2009.





79





Table of Contents





 




INTERWOVEN,
INC.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



From time to time, in addition to those identified above, the
Company is subject to legal proceedings, claims, investigations
and proceedings in the ordinary course of business, including
claims of alleged infringement of third-party patents and other
intellectual property rights, commercial, employment and other
matters. In accordance with generally accepted accounting
principles in the United States of America, the Company makes a
provision for a liability when it is both probable that a
liability has been incurred and the amount of the loss can be
reasonably estimated. These provisions are reviewed at least
quarterly and are adjusted to reflect the impacts of
negotiations, settlements, rulings, advice of legal counsel and
other information and events pertaining to a particular matter.
Litigation is inherently unpredictable. However, the Company
believes that it has valid defenses with respect to the legal
matters pending against the Company. It is possible,
nevertheless, that the Company’s consolidated financial
position, cash flows or results of operations could be affected
by the resolution of one or more of such contingencies.


 















13.  

Stockholders’
Equity



 




Litigation


 



Beginning in 2001, the Company and certain of its officers and
directors and certain investment banking firms were named as
defendants in a securities class action lawsuit brought in the
Southern District of New York. This case is one of several
hundred similar cases that have been consolidated into a single
action in that court. The case alleges misstatements and
omissions concerning underwriting practices in connection with
the Company’s public offerings. The plaintiff seeks damages
in an unspecified amount. In October 2002, the Company’s
officers were dismissed without prejudice as defendants in the
lawsuit. In February 2003, the District Court denied a motion to
dismiss by all parties. Although the Company believes that the
plaintiffs’ claims have no merit, in July 2003, the Company
decided to participate in a proposed settlement to avoid the
cost and distraction of continued litigation. A settlement
proposal was preliminarily approved by the District Court.
However, in December 2006, the Court of Appeals reversed the
District Court’s finding that six focus cases could be
certified as class actions. In April 2007, the Court of Appeals
denied the plaintiffs’ petition for rehearing, but
acknowledged that the District Court might certify a more
limited class. At a June 2007 status conference, the District
Court terminated the proposed settlement as stipulated among the
parties. In August 2007, plaintiffs filed an amended complaint
in the six focus cases to test the sufficiency of their
allegations. On September 27, 2007, plaintiffs filed a
motion for class certification in the six focus cases, which was
withdrawn on October 10, 2008. In November 2007, defendants
in the focus cases filed a motion to dismiss the complaint for
failure to state a claim, which the District Court denied in
March 2008. Plaintiffs, the issuer defendants (including the
Company), the underwriter defendants, and the insurance carriers
for the defendants, have engaged in mediation and settlement
negotiations. The parties have reached a settlement agreement in
principle. As part of this tentative settlement, the
Company’s insurance carrier has agreed to assume the
Company’s entire payment obligation under the terms of the
settlement. Although the parties have reached a tentative
settlement agreement, there can be no guarantee that it will be
finalized or receive approval from the District Court. If the
tentative settlement is not implemented and the litigation
continues against the Company, the Company would continue to
defend itself vigorously. Any liability the Company incurs in
connection with this lawsuit could materially harm its business
and financial position and, even if it defends itself
successfully, there is a risk that management’s distraction
in dealing with this lawsuit could harm its results. In
addition, in October 2007, a lawsuit was filed in the United
States District Court for the Western District of Washington by
Vanessa Simmonds, captioned Simmonds v. Bank of
America Corp.
,
No. 07-1585,
alleging that the underwriters of the Company’s initial
public offering violated section 16(b) of the Securities
Exchange Act of 1934, 15 U.S.C. section 78p(b), by
engaging in short-swing trades, and seeks disgorgement to the
Company of profits in amounts to be proven at trial from the
underwriters. In February 2008, Ms. Simmonds filed an
amended complaint. The suit names the Company as a nominal
defendant, contains no claims against the Company, and seeks no
relief from the Company. This lawsuit is one of more than fifty
similar actions filed in the same court. On July 25, 2008,
the underwriter defendants in the various actions filed a joint
motion to dismiss the complaints for failure to state a claim.
In addition, certain issuer defendants in the various actions
filed a joint motion to dismiss the complaints for failure to
state a claim. The parties entered into a stipulation, entered
as an order by the Court that the Company is not required to
answer or otherwise respond to the amended complaint.
Accordingly, the Company did not join the motion to dismiss
filed by certain issuers. There was a hearing on the motions to
dismiss on January 16, 2009. On March 12, 2009, the
court dismissed the complaint in this lawsuit with prejudice.
The deadline for Ms. Simmonds to appeal the court’s
dismissal order is April 13, 2009.





79





Table of Contents





 




INTERWOVEN,
INC.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



From time to time, in addition to those identified above, the
Company is subject to legal proceedings, claims, investigations
and proceedings in the ordinary course of business, including
claims of alleged infringement of third-party patents and other
intellectual property rights, commercial, employment and other
matters. In accordance with generally accepted accounting
principles in the United States of America, the Company makes a
provision for a liability when it is both probable that a
liability has been incurred and the amount of the loss can be
reasonably estimated. These provisions are reviewed at least
quarterly and are adjusted to reflect the impacts of
negotiations, settlements, rulings, advice of legal counsel and
other information and events pertaining to a particular matter.
Litigation is inherently unpredictable. However, the Company
believes that it has valid defenses with respect to the legal
matters pending against the Company. It is possible,
nevertheless, that the Company’s consolidated financial
position, cash flows or results of operations could be affected
by the resolution of one or more of such contingencies.


 















13.  

Stockholders’
Equity



 




These excerpts taken from the IWOV 10-K filed Mar 14, 2008.
Litigation
 
Beginning in 2001, the Company and certain of its officers and directors and certain investment banking firms were named as defendants in a securities class action lawsuit brought in the Southern District of New York. This case is one of several hundred similar cases that have been consolidated into a single action in that court. The case alleges misstatements and omissions concerning underwriting practices in connection with the Company’s public offerings. The plaintiff seeks damages in an unspecified amount. In October 2002, the Company’s officers were dismissed without prejudice as defendants in the lawsuit. In February 2003, the District Court denied a motion to dismiss by all parties. Although the Company believes that the plaintiffs’ claims have no merit, in July 2003, the Company decided to participate in a proposed settlement to avoid the cost and distraction of continued litigation. A settlement proposal was preliminarily approved by the District Court. However, in December 2006, the Court of Appeals reversed the District Court’s finding that six focus cases could be certified as class actions. In April 2007, the Court of Appeals denied the plaintiffs’ petition for rehearing, but acknowledged that the District Court might certify a more limited class. At a June 2007 status conference, the District Court terminated the proposed settlement as stipulated among the parties. In August 2007, plaintiffs filed an amended complaint in the six focus cases. On September 27, 2007, plaintiffs filed a motion for class certification in the six focus cases. The class certification motion is not expected to be resolved until after April 2008. In November 2007, defendants in the focus cases filed a motion to dismiss the complaint for failure to state a claim, which the court has yet to rule on. All matters in the case, including any settlement proposal, await determination of this motion to dismiss and plaintiffs’ motion to certify a newly defined class. If a new complaint is filed against the Company, the Company would continue to defend itself vigorously. Any liability the Company incurs in connection with this lawsuit could materially harm its business and financial position and, even if it defends itself successfully, there is a risk that management’s distraction in dealing with this lawsuit could harm its results. In addition, in October 2007, a lawsuit was filed in the United States District Court for the Western District of Washington by Vanessa Simmonds, captioned Simmonds v. Bank of America Corp., No. 07-1585, alleging that the underwriters of the Company’s initial public offering violated section 16(b) of the Securities Exchange Act of 1934, 15 U.S.C. section 78p(b), by engaging in short-swing trades, and seeks


74


Table of Contents

 
INTERWOVEN, INC.
 
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)
 
disgorgement to the Company of profits in amounts to be proven at trial from the underwriters. The suit names the Company as a nominal defendant, contains no claims against the Company, and seeks no relief from the Company.
 
From time to time, in addition to those identified above, the Company is subject to legal proceedings, claims, investigations and proceedings in the ordinary course of business, including claims of alleged infringement of third-party patents and other intellectual property rights, commercial, employment and other matters. In accordance with generally accepted accounting principles in the United States of America, the Company makes a provision for a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably estimated. These provisions are reviewed at least quarterly and are adjusted to reflect the impacts of negotiations, settlements, rulings, advice of legal counsel and other information and events pertaining to a particular matter. Litigation is inherently unpredictable. However, the Company believes that it has valid defenses with respect to the legal matters pending against the Company. It is possible, nevertheless, that the Company’s consolidated financial position, cash flows or results of operations could be affected by the resolution of one or more of such contingencies.
 
12.   Stockholders’ Equity
 
Litigation


 



Beginning in 2001, the Company and certain of its officers and
directors and certain investment banking firms were named as
defendants in a securities class action lawsuit brought in the
Southern District of New York. This case is one of several
hundred similar cases that have been consolidated into a single
action in that court. The case alleges misstatements and
omissions concerning underwriting practices in connection with
the Company’s public offerings. The plaintiff seeks damages
in an unspecified amount. In October 2002, the Company’s
officers were dismissed without prejudice as defendants in the
lawsuit. In February 2003, the District Court denied a motion to
dismiss by all parties. Although the Company believes that the
plaintiffs’ claims have no merit, in July 2003, the Company
decided to participate in a proposed settlement to avoid the
cost and distraction of continued litigation. A settlement
proposal was preliminarily approved by the District Court.
However, in December 2006, the Court of Appeals reversed the
District Court’s finding that six focus cases could be
certified as class actions. In April 2007, the Court of Appeals
denied the plaintiffs’ petition for rehearing, but
acknowledged that the District Court might certify a more
limited class. At a June 2007 status conference, the District
Court terminated the proposed settlement as stipulated among the
parties. In August 2007, plaintiffs filed an amended complaint
in the six focus cases. On September 27, 2007, plaintiffs
filed a motion for class certification in the six focus cases.
The class certification motion is not expected to be resolved
until after April 2008. In November 2007, defendants in the
focus cases filed a motion to dismiss the complaint for failure
to state a claim, which the court has yet to rule on. All
matters in the case, including any settlement proposal, await
determination of this motion to dismiss and plaintiffs’
motion to certify a newly defined class. If a new complaint is
filed against the Company, the Company would continue to defend
itself vigorously. Any liability the Company incurs in
connection with this lawsuit could materially harm its business
and financial position and, even if it defends itself
successfully, there is a risk that management’s distraction
in dealing with this lawsuit could harm its results. In
addition, in October 2007, a lawsuit was filed in the United
States District Court for the Western District of Washington by
Vanessa Simmonds, captioned Simmonds v. Bank of America
Corp.
,
No. 07-1585,
alleging that the underwriters of the Company’s initial
public offering violated section 16(b) of the Securities
Exchange Act of 1934, 15 U.S.C. section 78p(b), by
engaging in short-swing trades, and seeks





74





Table of Contents





 




INTERWOVEN,
INC.




 




NOTES TO
CONSOLIDATED FINANCIAL
STATEMENTS — (Continued)


 



disgorgement to the Company of profits in amounts to be proven
at trial from the underwriters. The suit names the Company as a
nominal defendant, contains no claims against the Company, and
seeks no relief from the Company.


 



From time to time, in addition to those identified above, the
Company is subject to legal proceedings, claims, investigations
and proceedings in the ordinary course of business, including
claims of alleged infringement of third-party patents and other
intellectual property rights, commercial, employment and other
matters. In accordance with generally accepted accounting
principles in the United States of America, the Company makes a
provision for a liability when it is both probable that a
liability has been incurred and the amount of the loss can be
reasonably estimated. These provisions are reviewed at least
quarterly and are adjusted to reflect the impacts of
negotiations, settlements, rulings, advice of legal counsel and
other information and events pertaining to a particular matter.
Litigation is inherently unpredictable. However, the Company
believes that it has valid defenses with respect to the legal
matters pending against the Company. It is possible,
nevertheless, that the Company’s consolidated financial
position, cash flows or results of operations could be affected
by the resolution of one or more of such contingencies.


 















12.  

Stockholders’
Equity



 




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