Notice of Approved Settlements in Zungui Haixi Corporation Securities Class Action
Marketwired
LONDON, ONTARIO--(Marketwired - Sep 6, 2013) -
Please note: This is a summary notice that has been produced for publication purposes announcing court approval of three settlements reached in this litigation. A Long-Form Notice, with full details of the settlements is available on:
This notice is directed to everyone that acquired shares of Zungui Haixi Corporation ("Zungui"), during the period from August 11, 2009 through to and including August 22, 2011.
Court Approval of Three Settlements in the Class Action
On October 3, 2011, Jerzy Zaniewicz and Edward Clarke ("Plaintiffs") commenced an action in the Ontario Superior Court of Justice ("Court") against Zungui Haixi Corporation ("Zungui"), Ernst and Young LLP, Zungui's former directors, certain of Zungui's former executive officers as well as the underwriting syndicate for Zungui's initial public offering on the Toronto Stock Exchange. The Plaintiffs alleged that Zungui's initial public offering prospectus and some of Zungui's other disclosures were materially false and/or misleading ("Action").
The Court has approved three settlements, which conclude the Action. The Settlements are compromises of disputed claims and are not admissions of liability, wrongdoing or fault on the part of any of the Settling Defendants, all of whom have denied, and continue to deny, the allegations made against them.
The first settlement, between the Plaintiffs and the Defendants, Zungui (through its court appointed litigation receiver), Michelle Gobin, Michael Manley, Patrick Ryan, Elliott Wahle and Margaret Cornish ("Zungui Defendants"), provides for the Zungui Defendants to pay CAD $8.1 million to resolve finally and forever the claims of Class Members (the term "Class Members" is commonly defined in the settlement agreements) and all claims that could have been made against the Zungui Defendants and Fengyi Cai, Jixu Cai and Yanda Cai in the Action ("Zungui Settlement").
The second settlement, between the Plaintiffs and the Defendant, Ernst & Young LLP, provides for Ernst & Young LLP to pay CAD $2 million to resolve finally and forever the claims of Class Members and all claims that could have been made against Ernst & Young LLP in the Action ("E&Y Settlement").
The third settlement, between the Plaintiffs and the Defendants, CIBC World Markets Inc., Canaccord Genuity Corp., f.k.a. Canaccord Financial Ltd., GMP Securities LP, and Mackie Research Capital Corporation, f.k.a. Research Capital Corporation ("Underwriter Defendants"), provides for the Underwriter Defendants to pay CAD $750,000 to resolve finally and forever the claims of Class Members and all claims that could have been made against the Underwriter Defendants in the Action ("Underwriter Settlement", together with the Zungui Settlement and E&Y Settlement, the "Settlements").
Certain people and entities are not permitted to participate in the claims process under the Settlements. Those people are the Defendants, the past or present subsidiaries or affiliates, officers, directors, partners, legal representatives, consultants, successors and assigns of Zungui and any member of each Defendants' families, their heirs, successors or assigns, and any person or entity who acquired Zungui shares in exchange for shares in Southern Trends International Holding Company Limited if they rendered consultative or other professional services to Zungui or its subsidiaries in connection with the initial public offering of Zungui (these people and entities are commonly defined in the Settlement Agreements as "Excluded Persons").
The Approval Orders
By Order issued by the Ontario Superior Court of Justice, dated August 26, 2013, the Court approved the Settlements.
The Court also awarded Class Counsel legal fees, expenses and applicable taxes in the amount of $2,807,037.56 or approximately 20.75% of the combined monetary value of the Settlements ("Settlement Amount") before the Settlement Amount is distributed to Class Members. Class Counsel were retained on a contingent basis such that they were only to be paid if they were successful in the Action. Expenses incurred or payable relating to approval, notice, implementation and administration of the Settlements including the fees of the Administrator (commonly defined in the Settlement Agreements as "Administration Expenses") will also be paid from the Settlement Amount.
All Class Members are bound by the terms of the Settlements unless they have already validly excluded themselves from the Action (opted-out). The deadline to opt-out was August 7, 2013.
ADMINISTRATOR
The Court has appointed NPT RicePoint Class Action Services as the Administrator of the Settlements. The Administrator will, among other things: (1) receive and process Claim Forms; (ii) make determinations of Class Members' eligibility for compensation pursuant to the Court approved Plan of Allocation; (iii) communicate with Class Members regarding their eligibility for compensation; and (iv) manage and distribute the Settlement Amount.
Class members may be eligible for compensation under the Settlements. To be eligible for compensation under the Settlement Agreements, Class Members must first submit their completed Claim Form postmarked no later than January 6, 2014 (the "Claims Deadline"). The Administrator will, in due course, make determinations of Class Members' eligibility for compensation pursuant to the Court approved Plan of Allocation.
CLASS COUNSEL
The law firm of Siskinds LLP are counsel to the Plaintiffs. The claim, Settlement Agreements, Claim Form, Orders of the Court and other information are available on the website of Class Counsel, at www.classaction.ca.
The Ontario Superior Court of Justice offices cannot answer any questions about the matters in this notice. For questions relating to the Action, for further information, or to obtain a Claim Form please contact the office of Plaintiffs' counsel per the contact details below:
