Imax Corporation
In September 2006, Siskinds LLP filed a class action in the Ontario Superior Court of Justice on behalf of all persons, other than Excluded Persons, who acquired securities of Imax on the TSX or the NASDAQ between the opening of trading on February 17, 2006 and the close of trading on August 9, 2006, and who held some or all of those securities as of the close of trading on August 9, 2006 (the "Ontario Class Action").
The Ontario Class Action concerns Imax's revenue-recognition practices for the 2005 fiscal year. In early 2006, Imax announced it had successfully completed 14 theatre system installations in the fourth quarter of 2005. Imax also announced an earnings increase of 62% for the fiscal year ended on December 31, 2005. On August 9, 2006, however, Imax revealed that it had recognized revenue in the fourth quarter of 2005 on 10 theatre-system installations in theatres which did not open in that quarter. Imax subsequently restated its financial results for 2005.
The statement of claim alleges that Imax and some of its directors and officers overstated Imax's revenues for 2005, and thereby artificially inflated the trading price of Imax's securities. The market price of Imax's shares declined by approximately 40% when the overstatement was revealed.
On December 19, 2009, Justice van Rensburg granted the plaintiffs’ motions for leave to assert secondary market misrepresentation claims under Part XXIII.1 of the Ontario Securities Act, and she certified the Ontario Class Action as a class proceeding. On February 14, 2011, Justice Corbett dismissed the defendants’ motion for leave to appeal the December 19, 2009 orders of Justice van Rensburg. The Ontario Class Action is now in the discovery phase. You may see a copy of the Certification Notice here: [English] [French].
In March 2012, the defendants brought a motion for summary judgment in relation to the plaintiffs' Part XXIII.1 claims, arguing that those claims are time-barred. The plaintiffs oppose that motion. It is scheduled to be heard on May 1, 2012. The Summary Judgment motion does not affect the common law claims which the court has certified.
In addition, in January 2012, the lead plaintiff in a parallel action pending in the United States (In re IMAX Securities Litigation, Civil Action No. 1:06-cv-06128 (the “U.S. Action”)) entered into a stipulation to settle the U.S. Action. That settlement is subject to court approval, and is also subject to a determination by the Ontario Court to exclude from the Ontario Class Action all persons who purchased Imax shares on the NASDAQ and who do not opt-out of the U.S. Action. The defendants have now brought a motion in the Ontario Class Action for an order amending the class definition to exclude those persons from the Ontario Class Action (the “Carve Out Motion”). The Plaintiffs in the Ontario Class Action oppose the Carve Out Motion, in part on the basis that they consider the US SETTLEMENT TO BE INADEQUATE. The Carve Out Motion is scheduled to be heard by Justice van Rensburg from July 30 to August 2, 2012.
If you purchased Imax shares during the CLASS PERIOD, please complete the online information form. Your information will be held in strict confidence. By completing the form, you are not retaining Siskinds, nor do you incur any obligations in connection with this lawsuit. For further information concerning this action, please contact Nicole Young at 1 (800) 461-6166 ext. 2380 or e-mail Nicole by clicking on the Contact Us link below. Updates concerning this action will be posted above.