In re Netopia, Inc. Securities Litigation

Defendants' Memorandum in Support of Motion to Dismiss

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This is defendants motion to dismiss the complaint, which the Court denied. The motion was addressed to:

1. Whether plaintiffs fail, as a matter of law, to state a claim against Defendants Netopia, Inc. (“Netopia” or the “Company”), Alan Lefkof, and David Kadish in the

Consolidated Amended Complaint (the “CAC”) for:

a. Alleged misstatements about Netopia’s sale of software and maintenance to software reseller Interface Computer Company (“ICC”) for resale to the Chicago public school system in 2002 (the “Chicago Transaction) because all revenue from the transaction was received and recorded more than a year after the November 2003 commencement of plaintiffs’ purported class period?

b. Alleged misstatements about the revenue Netopia received from its customer Swisscom AG in the fiscal quarter ended December 2003, because Netopia’s statements concerning this revenue were accurate and Netopia properly recognized revenue according to generally accepted accounting principles?

c. Alleged losses from the decline in Netopia’s stock price following Netopia’s public statements about its earnings on January 20, February 17, and April 19, 2004 because those statements have no connection to alleged misstatements about the ICC transactions?

2. Whether, in the alternative, this Court should strike the allegations in the CAC concerning the Chicago Transaction (CAC ¶¶ 22-31), Swisscom revenue (CAC ¶¶ 113118), and Netopia’s stock price drops following its public statements on January 20, February 17, and April 19, 2004 (CAC ¶¶ 105-107), where these allegations do not

contribute to any cause of action and would distract this Court and defendants from identifying the factual basis, if any, for plaintiffs’ claims?

3. Whether plaintiffs’ claims in the CAC fail as a matter of law against defendant David Kadish because plaintiffs have failed to allege that Mr. Kadish: a. Made any actionable statement? b. Acted with scienter with respect to any of the alleged misstatements

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Reference Info:Legal Memoranda: Motion Addressed to Pleadings | Federal, 3rd Circuit, New Jersey | United States


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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