In Re Northpoint Communications Group, Inc.

In Re Northpoint Communications Group, Inc., Securities Litigation

Good Law

184 F. Supp. 2d 991·2001 WL 1692839·2001 U.S. Dist. LEXIS 23372

United States District Court, Northern District of CaliforniaDecember 21, 2001C01-01473 WHACalifornia6,954 words

Opinion

Alsup, J.

ORDER: (1) GRANTING INDIVIDUAL DEFENDANTS’ MOTION TO DISMISS; AND (2) GRANTING PLAINTIFF LEAVE TO AMEND

INTRODUCTION

In this securities-fraud suit, the class-action complaint alleges that defendants made false and misleading statements concerning NorthPoint Communications Group, Inc., between August and November 2000. The complaint contends that defendants, inter alia, overstated North-Point’s revenues, earnings and subscribers, mischaracterized its accounting practices, and made misleading statements concerning a pending merger with Verizon Communications. NorthPoint was ultimately forced to revise its revenues. The Verizon merger fell through. NorthPoint’s stock dropped, the company went bankrupt, and this suit ensued. Because NorthPoint is now in bankruptcy, this action is stayed as to it. The four individual defendants in this case, however — former CEO and President Elizabeth A. Fetter; former Chief Development Officer Herman Blue-stein; former CFO Michael Glinsky; and former chairman Michael Malaga — have moved to dismiss the complaint. This order grants their motion, with leave to amend. It concludes that plaintiff has not met its burden of pleading facts giving rise to a…

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