Huron Consulting Group Announces Proposed Settlement of Securities
CHICAGO, Dec 06, 2010 (BUSINESS WIRE) --
Huron Consulting Group Inc. (NASDAQ: HURN), a leading provider of business consulting services, today announced that it has entered into an agreement in principle with the lead plaintiffs in the pending securities class action lawsuit related to the restatement of its financial statements in 2009.
The agreement in principle provides that the settlement class will receive total consideration of approximately $38 million, consisting of $27 million in cash, which will be funded by the Company's insurance carriers, and the issuance by the Company of 474,547 shares of common stock which has an aggregate value of approximately $11 million, based on the closing market price on November 24, 2010. The Company expects to record a non-cash charge to earnings in the fourth quarter of 2010 in the amount of approximately $11 million, representing the fair value of the shares. The Company will adjust the amount of the non-cash charge to reflect changes in the fair value of the shares until and including the date of issuance. The Company will issue the shares following final court approval of the proposed settlement, which the Company expects will occur in the first half of 2011.
As discussed above, the Company's insurance carriers will fund the cash portion of the settlement. Following such payment, the Company will not receive any further contributions from its insurance carriers for the reimbursement of legal fees expended on the finalization of the class action settlement or any amounts related to the derivative suits and SEC investigation described in the Company's Quarterly Report on Form 10-Q for the period ending September 30, 2010.
The proposed settlement contains no admission of wrongdoing. The Company has always maintained and continues to believe that it did not engage in any wrongdoing or otherwise commit any violation of federal or state securities laws or other laws. However, given the potential cost and burden of continued litigation, the Company believes that the proposed settlement is in its best interest and in the best interest of its stakeholders.
The proposed settlement is subject to the completion of final documentation, preliminary and final court approval, funding of the $27 million in cash by the Company's insurance carriers, and issuance of the settlement shares.
John McCartney, non-executive chairman of the Huron board, said, "We are pleased to have reached an agreement to settle this matter, which is in the best interest of the Company and its stakeholders. The resolution of this matter will allow our current management team to continue its focus on serving clients and the future growth of the Company."
See the Company's Form 8-K filed today for additional information related to the settlement.
About Huron Consulting Group
Huron Consulting Group helps clients in diverse industries improve performance, comply with complex regulations, reduce costs, recover from distress, leverage technology, and stimulate growth. The Company teams with its clients to deliver sustainable and measurable results. Huron provides services to a wide variety of both financially sound and distressed organizations, including healthcare organizations, Fortune 500 companies, leading academic institutions, medium-sized businesses, and the law firms that represent these various organizations. Learn more at www.huronconsultinggroup.com.
Statements in this press release, including the information incorporated by reference herein, that are not historical in nature, including those concerning the Company's current expectations about its future results, are "forward-looking" statements as defined in Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act") and the Private Securities Litigation Reform Act of 1995. Forward-looking statements are identified by words such as "may," "should," "expects," "plans," "anticipates," "assumes," "can," "considers," "could," "intends," "might," "predicts," "seeks," "would," "believes," "estimates" or "continues". Risks, uncertainties and assumptions that could impact the Company's forward-looking statements relate, among other things, to (i) the restatement, (ii) the Securities and Exchange Commission ("SEC") investigation with respect to the restatement and the related purported private shareholder class action lawsuit and derivative lawsuits, (iii) the completion of final documentation related to the class action settlement, preliminary and final approval of the class action settlement and funding of the $27 million in cash by the Company's insurance carriers, (iv) the SEC investigation and related Company inquiry into the allocation of time within a certain practice group, and (v) the request by the United States Attorney's Office ("USAO") for the Northern District of Illinois for certain documents. In addition, these forward-looking statements reflect our current expectation about our future results, levels of activity, performance, or achievements, including, without limitation, that our business continues to grow at the current expectations with respect to, among other factors, utilization rates, billing rates, and the number of revenue-generating professionals; that we are able to expand our service offerings; that we successfully integrate the businesses we acquire; and that existing market conditions, including those in the credit markets, do not continue to deteriorate substantially. These statements involve known and unknown risks, uncertainties and other factors that may cause actual results, levels of activity, performance or achievements to be materially different from any anticipated results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. See "Risk Factors" in our 2009 Annual Report on Form 10-K and in our Quarterly Report on Form 10-Q for the period ended September 30, 2010 for a description of the material risks we face.
SOURCE: Huron Consulting Group Inc.
Huron Consulting Group Inc.
Jennifer Frost Hennagir
James K. Rojas, Chief Financial Officer