Majesco reaches settlement in shareholder suit

Class-action shareholder suit resolved, but legal issues remain for Cooking Mama publisher.

Last year, a group of Majesco Entertainment shareholders sued the company, saying former CEO Morris Sutton and his executive sons Jesse and Joseph were running the company exclusively for their own benefit. Today the Cooking Mama publisher announced that it has reached a settlement agreement in the case, putting one more of its legal troubles to rest.

As part of the settlement, Majesco is denying that it acted improperly but will give the plaintiffs roughly $2.5 million in cash and shares. That sum was chalked up as legal fees in the company's second-quarter results, announced in June.

"The company believes it is in its best interest to resolve these claims, in order to enable management to focus all of its efforts on executing its strategy and creating greater value for shareholders," the company said in a statement.

Majesco's woes began in mid-2005, after a downgraded financial forecast and the sudden resignation of then-CEO Carl Yankowski led to the stock shedding more than half its value in a single day. That was followed by a flood of shareholder lawsuits that has not yet abated.

In July, another investor filed suit against the company, saying he purchased more than a quarter of a million shares of Majesco stock for an artificially inflated sum of more than $3 million. As of press time, Majesco stock was trading up more than 2 percent to $1.35, meaning that shareholder's investment would be worth less than $368,000.

13 Comments

  • bernieberry

    Posted Oct 19, 2007 8:22 pm PT

    Sounds like another Enron to me. That's what happens when you inflate stock.

  • lukey9493

    Posted Oct 18, 2007 2:40 pm PT

    danm right they should sue them, they're destroying our rainforests

  • AL13NK1LL3R

    Posted Oct 18, 2007 2:29 pm PT

    w w w what!! dude that the lamest thing i ever heard for this month!

  • chewygun

    Posted Oct 18, 2007 2:20 pm PT

    who cares

  • SaintRasmus

    Posted Oct 18, 2007 2:09 pm PT

    I can see that thy have made games called: Cooking Mama and Nancy Drew

  • deadmoshun

    Posted Oct 18, 2007 1:55 pm PT

    they made pshyconuts which was a great game but it didn't sell will and they r still paying for that

  • bigmit37

    Posted Oct 18, 2007 1:52 pm PT

    Pyschonauts....they published it.
    Advent Rising
    Blood Rayne ( I think)

  • SaintRasmus

    Posted Oct 18, 2007 1:48 pm PT

    Never heard of Majesco. What games have thy made. ?

  • mrkame16

    Posted Oct 18, 2007 1:12 pm PT

    there games suck anyway..who cares.

  • jenovaproject

    Posted Oct 18, 2007 12:58 pm PT

    Don't care. Want Bloodrayne 3.

  • Priest57

    Posted Oct 18, 2007 12:51 pm PT

    If the CEO is being accused of using the company for his own benefit and causing the organizations’ stakeholders enough grief to make these kinds of accusations, then someone should consider investigating this more in depth..

  • xX_Ricochet_Xx

    Posted Oct 18, 2007 12:38 pm PT

    Serves them right for burning down the rainforest.

  • nuttysack

    Posted Oct 18, 2007 12:34 pm PT

    Poor Poor Majesco :-/

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