In a settlement granted final approval Thursday by U.S. District Judge Tena Campbell, Novell made it clear that it continues to "deny each and all claims" made on behalf of plaintiffs Domenico Pirraglia, Bella and Bernard Pasternak and other shareholders.
However, Utah-born Novell, which relocated headquarters last year to Waltham, Mass., said its attorneys had concluded "further conduct of the litigation would be protracted and expensive" and payment of the settlement justified given the "uncertainty and risk" of such a complex case.
"Novell is pleased to have this matter finally resolved and is satisfied with the outcome," Novell attorney Jeffrey Hunt said.
So was Richard Burbidge, whose Salt Lake City law firm of Burbidge & Mitchell will share a payout of 30 percent - almost $4.2 million, plus expenses - with other plaintiff firms from Los Angeles, San Diego, San Francisco and New York City.
"We're very pleased with the settlement and any lack of objection to it," Burbidge said. "It certainly is fair, adequate and reasonable and brings to a close nearly seven and a half years of very intense litigation."
How many investors will share in the more than $9 million left after legal costs is uncertain. Burbidge did not know, although he said more than 50,000 settlement notices - with shareholders receiving at least two - had been mailed over the past three months.
Campbell had granted preliminary approval for the deal in February, ending litigation that had begun with two proposed class action complaints filed in February 1998 in San Jose, Calif.'s federal court. The suits were consolidated in July of that year, and in December 1999 transferred to Utah.
Campbell dismissed the suit in April 2002, but the 10th Circuit Court of Appeals sent an abbreviated version back for trial. The Denver-based panel ruled that shareholders should be allowed to litigate "various accounting shenanigans" that purportedly boosted the company's financial reports.
Those earnings details, plaintiffs charged, led to heavy investor losses when Novell stock slipped from $13 to $7 between Nov. 1, 1996 and April 22, 1997. (Novell's stock closed Thursday at $5.83 per share, down 45 cents or 7 percent).
The 10th Circuit overturned Campbell, finding shareholders were entitled to pursue claims that former Novell President Joseph Marengi, then-board Chairman Robert Frankenberg, ex-Chief Financial Officer James Tolonen and others improperly recorded shipments to third-party retailers and resellers as revenue.
Novell also was in federal court Wednesday, asking U.S. District Judge Dale Kimball to dismiss the SCO Group's "slander of title" suit. Kimball took the arguments under advisement, but had not ruled by late Thursday.
The complaint stems from Novell's disputing of SCO's claims to copyright ownership of the Unix, an operating system SCO says it bought rights to, through a predecessor company, in 1995. Novell says it retains copyrights from Unix, a claim that could undermine the foundation of SCO's suit against IBM.
SCO, which is suing IBM for a minimum of $5 billion in a suit alleging Big Blue misappropriated Unix code in its Linux-related product releases, argues that Novell's Unix claims have hurt its business.
bmims@sltrib.com
