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Kaplan Fox serves as counsel for plaintiffs in the case against Harris Stratex Networks, Inc. (“Harris Stratex” or the “Company”).
Plaintiffs generally allege that the Company issued materially false and misleading statements about its financial condition prior to and following its formation in early 2007 through the merger between the Microwave Communications Division of Harris Corporation and Stratex Networks, Inc.
On July 30, 2008, the Company announced that it would restate its reported earnings going back to 2005 as a result of its discovery of accounting errors which rendered its previously issued financial statements to be incorrect. The Company further disclosed that its prior financial statements for the first three quarters of fiscal 2008 and the fiscal years 2005 through 2007 should no longer be relied upon. In reaction to this news, the price of Harris Stratex common stock fell dramatically on extremely heavy trading volume, from $11.24 per share to $7.35 per share, approximately a 35% decline, and wiped out $227 million in market capitalization.
On July 22, 2010, the court denied in substantial part the defendants’ motion to dismiss the case. The parties are now engaged in discovery.
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