GT Solar settles class action suit
GT Solar International Inc. has settled a class action suit related to its July 2008 initial public offering for $10.5 million, and all but $1 million of that total will be paid by its insurance company, the company announced Monday.The suit alleged that the Merrimack company – which specializes in creating equipment and materials to make solar cells — didn’t reveal in its IPO disclosures that it was in imminent danger of losing business from LDK Solar Co, a Chinese firm that had – the previous year – accounted for more than 60 percent of its sales. GT Solar denied that and other charges in the suit.The stock tumbled from a $16.50-a-share opening to as low as $9.30.The stock price continued to decline as the general economic decline hurt energy demand, and the falling price of oil made it harder for energy alternatives like solar. But GTSolar prospered anyway, winning one order after another, and branching into the lucrative sapphire technology necessary for the lucrative and fashionable LED sector.Just last week, for instance, it announced a $41 million contract for its advance sapphire crystallization furnace. In its last earnings report, the company thought it would finish off fiscal 2011 (which ends at the end of the month) with more than $835 million, and with a backlog of $1.2 billion.The settlement – which admits no liability on behalf of the company – would cover all claims in federal court, and some pending in state court, but would not affect a directive suit in New Hampshire state court. The company would pay $10.5 million into a settlement fund, of which the insurer would pay $9.5 million, and the company would contribute $1 million.”We believe that this settlement will provide GT Solar with certainty on the federal and state securities lawsuits, will eliminate the uncertainties and further expense associated with those litigations, and will eliminate an unnecessary drain on management time,” said Tom Gutierrez, GT Solar’s president and chief executive. — BOB SANDERS/NEW HAMPSHIRE BUSINESS REVIEW
