Judge OKs GT class action deal

A federal judge has given final approval to a $10.5 million class action settlement in a case involving shareholders of the former GT Solar International, now GT Advanced Technologies.The settlement, which had originally been reached in March, gives those who purchased shares of the stock on July 24, 2008 — when the company first went public — an average of about 23 cents a share. The payout will probably come next spring.Shareholders would have received 35 cents a share, but for 12 cents a share set aside for attorney fees ($2.62 million) and various expenses (just under $230,000). Small shareholders won’t get a dime.The settlement stemmed from a class action suit filed against the Merrimack-based GT that charged the company didn’t reveal in its initial public offering PO disclosures that it was in imminent danger of losing business from LDK Solar Co., a Chinese firm that at the time accounted for more than 60 percent of GT Solar’s sales.The stock tumbled from a $16.50-a-share opening to as low as $9.30. The class action suit claimed the alleged deception was responsible for share value drop of about $60.6 million, or about $2 a share.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 GT prospered anyway, winning one multimillion-dollar order after another, and branching into the lucrative sapphire technology necessary for the lucrative LED sector. (That decision resulted in the recent change in the company’s name to GT Advanced Technologies.)GT denied the allegations, but settled in March for an amount that would cost the company about $1 million, the rest of the money coming from its insurer. The settlement admitted no liability on behalf of the company.The Washington law firm (Cohen Milstein Sellers & Toll PLLC ) representing the lead plaintiff (Arkansas Public Employees Retirement System) argued that the settlement – 17.3 percent of the original claim – was a good deal, given the uncertainty of litigation and the “strong and skillful defenses” on behalf of the company’s attorneys.The average class action settlement since 1996 was between 5.5 and 6.2 percent, according to one study, and another study found that the median was as low as 3.4 percent. In 2010 the median was 2.8 percent or about $6 million.Class members will have until November to say whether they want to be part of the settlement. For more information, shareholders can call 866-274-4004 or email info@strategicclaims.net. — BOB SANDERS