Joe’s Crab Shack settles securities suit for $1.8M, attorneys reap $900K

In January, the owners of Joe’s Crab Shack and several other popular restaurant chains reached a $1.8 million settlement in a federal securities class action lawsuit.

On Friday, June 5, District Judge Vanessa Gilmore signed an order approving the settlement, awarding the plaintiffs’ attorneys in the case $600,000 from the settlement fund, plus $304,009.77 in expenses.

Individually and on behalf of those similarly situated, Chaz Campton filed the suit against Ignite Restaurant Group, as wells as several other companies and individuals, on July 20, 2012, in the U.S. District Court, Southern District of Texas, seeking to recover damages caused by the defendants’ alleged violations of the Securities Act.

According to the second amended complaint, class members purchased stock in Ignite’s $84.8 million initial public offering in 2012 based on untrue statements of material fact contained in the company’s registration statement filed with the U.S. Securities and Exchange Commission.

“Ignite’s Registration Statement and Prospectus contained inaccurate statements of material fact,” the complaint states. “It overstated the Company’s true financial performance which had the effect of artificially inflating the value of Ignite’s common stock.”

Court records show the parties filed a stipulation and agreement of settlement on Jan. 26, stating that, if the court approves, the settlement will provide $1.8 million to play claims of investors who purchased Ignite stock.

The settlement represents an average recovery of $0.271 per share.

The class is represented by Phillip Kim and Laurance Rosen of the Rosen Law Firm in New York. Dallas attorney Dean Gresham of the Payne Mitchell Law Group is liaison counsel for the plaintiffs.

Case No. 4:12-cv-02196