San Francisco, CA (PRWEB) March 27, 2007
On March 12, 2007, the Law Offices of Alan W. Sparer filed a class action entitled Michael B. Eshelman, D.D.S., Peter Silcher, D.D.S, and Lori I. Silcher, v. OrthoClear Holdings, Inc., OrthoClear, Inc., Muhammad Ziaullah Chishti, Huafeng ÂCharlesÂ Wen, Peter Riepenhausen, Arthur Taylor, Saiyed Atiq Raza, Christoper Kawaja, Patricia Humell Seifert, Joseph Breeland, Mudassar Rathore, Paul Badawi, 3i Group PLC, and DOES 1-25 (No. #C07-1429 N.D.Cal.). The Class consists of investors who purchased Class A, B and C Preferred Convertible Shares between January 2005 and September 2006. The Complaint alleges that the directors and certain officers of OrthoClear deceived investors by failing to disclose that OrthoClearÂs business was substantially based on patents and other intellectual property stolen from Align Technology, Inc. The Complaint also alleges that investors were misled about the nature and prospects for litigation brought by Align against OrthoClear, and that after settling with Align, OrthoClear unlawfully distributed a substantial portion of the settlement funds to venture capital investor, 3i Group PLC.
If you wish to serve as lead plaintiff, you must move the Court no later than 60 days from the date of this notice (May 26, 2007). If you wish to discuss this action or have any questions concerning this notice or your rights or interests, please contact plaintiffÂs counsel, Alan Sparer, Marc Haber or James Nabwangu of The Law Offices of Alan W. Sparer at 415-217-7300 or via e-mail at info @ sparerlaw.com. If you are a member of this class, you can view a copy of the complaint as filed at http://www.sparerlaw.com. Any member of the purported class may move the Court to serve as lead plaintiff through counsel of their choice, or may choose to do nothing and remain an absent class member.
The Complaint alleges that within weeks of OrthoClearÂs launch, Align TechnologyÂOrthoClearÂs sole competitorÂfiled multiple law suits alleging OrthoClear had stolen AlignÂs intellectual property, infringed its patents and used its propriety customer information without consent. OrthoClear Holdings raised $10-20 million from investors in private placements of Class A, B, and C Preferred Convertible Shares, while assuring potential investors that AlignÂs claims and lawsuits were wholly without merit.
On the eve of first trial between Align and OrthoClear (and without warning) OrthoClear abandoned its defense of the Align litigation, announcing that it had entered into a settlement that required it to assign its intellectual property to Align and exit the orthodontic aligner business in return for a payment of only $20 million. In a letter to shareholders in October 2006, OrthoClear admitted for the first time that it was likely to lose the litigation with Align, and further acknowledged that the costs of prosecuting and defending the Align lawsuits were prohibitive.
The Complaint alleges that false and fraudulent statements made in OrthoClearÂs Purchase Agreements, press releases, and oral presentations assured that the operation of OrthoClearÂs business did not infringe any patent or other proprietary right of Align. The Complaint further alleges that, instead of using the $20 million for the benefit of all its shareholders, OrthoClear unlawfully refunded all or a significant portion of the $10 million investment made by 3i. It is alleged this distribution violated OrthoClearÂs own Memorandum of Association and applicable laws governing corporate distributions. It is also alleged this action constituted a breach of fiduciary duty by OrthoClearÂs current and former directors.
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