Court asked to approve Greenfield settlement

US-- A shareholder group suing Greenfield Online has asked a court to grant final approval of a settlement deal that would dismiss claims that the company made “materially false and misleading statements” about its performance in 2005.

The group sought damages, claiming the online fieldwork firm's share price had been “artificially inflated” by its failure to disclose problems with its survey panel, its acquisition of GoZing and its accounting practices in the months before a sharp fall in the value of its stock.

Greenfield denies the allegations in the class action lawsuit, but said it decided to settle as “further conduct of the action would be protracted and distracting”.

An investigation by the company's audit committee did not reveal any evidence that the company “misrepresented” the size of its panel, as claimed, but it did uncover accounting errors which misstated net income by less than 1% for the years 2005, 2006 and 2007.

According to a 31 December filing with the courts by lawyers representing the shareholder group, Greenfield has paid $4m in cash into an interest-bearing escrow account to be divvied up between members of the class – defined as those who bought Greenfield stock between 9 February and 29 September 2005 – minus taxes, administrative costs and attorneys' fees.

Lawyers said the settlement is “an excellent recovery” for the class, and that as of the filing date none of the 12,600 potential class members contacted had raised an objection to the settlement plan.

A court hearing is set for 23 January. Following a request for preliminary approval of the settlement in July, Greenfield was acquired by Microsoft in a $486m deal.

Author: Brian Tarran