PHILADELPHIA (CN) - The Third Circuit dismissed as untimely a lawsuit accusing Exxon of overstating revenue by billions of dollars during a merger, causing Mobil shareholders to receive fewer shares of ExxonMobil.
Shareholders claimed Exxon issued financial statements that failed to recognize any of its oil reserves as "impaired," or no longer making money. Plaintiffs estimated that Exxon should have counted from $3.37 billion to $5.37 billion of impairment losses in 1998, which would have reduced Exxon's net income, affected its share price and led Mobil to demand more shares of ExxonMobil in the 1999 merger. They claimed damages to shareholders of $4.6 billion to $18 billion. Plaintiffs failed to file their complaint within the three-year statute of limitations, but claimed they had five years under Sarbanes-Oxley, which was enacted after the merger but before the complaint. But Judge Ambro said their claims are not covered by the Act, so the Act's five-year time frame does not apply.
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