Isilon Finally Settles Shareholder Class Action Litigation

Isilon Systems, Inc. has agreed to settle and resolve a shareholder class action lawsuit initially filed in November 2007 against Isilon, certain of its current and former officers and directors, and the underwriters of Isilon’s December 2006 initial public offering. The litigation is pending in the United States District Court for the Western District of Washington and concerns Isilon’s initial public offering and its previously announced restatement of the fourth quarter and fiscal 2006 and the first two quarters of fiscal 2007.

The parties have entered into a memorandum of understanding and will sign and submit a formal, binding stipulation of settlement to the court in the coming weeks. The settlement provides for a payment to the plaintiff class of $15 million, of which Isilon will contribute $2 million and the balance of which will be paid by Isilon’s insurers.

Isilon expects to incur a $2 million charge in the quarter ended September 30, 2009 associated with the settlement. The class action settlement is subject to preliminary and, following notice to class members, final approval by the United States District Court for the Western District of Washington.