TORONTO,
Jan. 21, 2014 /CNW/ - This notice
is to all individuals and entities, wherever they may reside or be
domiciled (other than Excluded Persons and the Opt-out Parties as
defined below), who sold shares of Protective Products of America
Inc. ("PPA") between October 8, 2009
and January 13, 2010 (the "Class
Period") or who held shares of PPA at the end of the Class
Period.
READ THIS NOTICE CAREFULLY AS IT MAY AFFECT
YOUR LEGAL RIGHTS. YOU
MAY NEED TO TAKE PROMPT ACTION
Please note: This is a summary notice, produced
for publication purposes, announcing the settlement reached in this
litigation and the date of the hearing for court approval of the
settlement. A long-form notice, containing additional detail, and
copies of the Global Settlement Agreement and Collateral Settlement
Agreement, defined below, are available on Class Counsel's website:
http://www.rochongenova.com.
THE CLASS ACTION AND PROPOSED
SETTLEMENT
In December 2010,
the Plaintiffs commenced a proposed class proceeding against
certain of PPA's officers and directors (the "Defendants") in the
Ontario Superior Court of Justice (the "Court"), Court File No.
CV-10-415821-CP00 (the "Action"). The Plaintiffs allege that, as a
result of PPA's non-disclosure of allegedly material information
relating to a contract with the U.S. Army (the "IOTV Contract"),
PPA's shares traded at artificially deflated prices that did not
reflect the positive value of material information from
October 8, 2009 through January 13, 2010, the date of PPA's bankruptcy
filing (the "Class Period"). Therefore, the Plaintiffs and
other Class Members sustained damages on any PPA shares they
purchased on or before October 7,
2009 and which they later sold at artificially deflated
prices during the Class Period, either through a voluntarily sale
or, as alleged in the Action, through an involuntary "forced sale"
which occurred upon PPA's bankruptcy filing. The Defendants have
denied the Plaintiffs' allegations.
On April 24, 2013,
with the consent of the Plaintiffs and the Defendants, the Court
certified this proceeding as a class action. Pursuant to the
Court's certification order, class members who wished to opt-out of
the Action were required to do so by September 1, 2013 (the "Opt-out Parties).
On January 14,
2014 the parties to the Action and the parties to an action
commenced in the U.S. Bankruptcy Court, Southern District of
Florida also based, in part, on
PPA's non-disclosure of the IOTV Contract, executed a global
settlement agreement (the "Global Settlement Agreement").
This settlement represents a compromise of disputed claims and is
not an admission of liability, wrongdoing or fault on the part of
any of the Defendants, all of whom have denied, and continue to
deny, the allegations against them. The parties to the Action
also entered into an agreement for purposes of implementing the
settlement provided under the Global Settlement Agreement (the
"Collateral Settlement Agreement"). The Global Settlement
Agreement and the Collateral Settlement Agreement (hereinafter,
collectively the "Settlement") are subject to the approval of the
Court.
In consideration for full and final settlement
of the claims of Class Members, the Global Settlement Agreement
provides for the payment of USD$3,500,000 (the "Initial Settlement Payment")
plus 25% of any potential savings on an estimated USD$1.6 million reserve amount for an unrelated
claim (the "Reserve") which has been established by PPA's insurer
XL Specialty Insurance (the "Insurer") against a Directors &
Officers Liability Policy (the "Policy") held in the name of PPA
(the "Total Settlement Amount").
The Total Settlement Amount includes all legal
fees, disbursements, taxes and administration expenses. In
return for Initial Settlement Payment, the Defendants receive
releases and a dismissal of the Class Action. Despite the
releases, and in conjunction with the Global Settlement Agreement,
the Insurer will remain obligated to pay the Class 25% of any
savings on the Reserve.
HEARING FOR APPROVAL OF THE
SETTLEMENT
On March 6, 2014,
at 10:00 a.m., the Court will hold a
public hearing at Osgoode Hall, 130 Queen Street West, Toronto, Ontario, to determine whether the
Settlement should be approved. The Court also will consider
Class Counsel's application for an award of legal fees and
disbursements. If you wish to object to the Settlement, you
must deliver to counsel for the Plaintiffs and Defendants and file
with the Court a written objection by February 20, 2014, as described further in the
long-form notice. If you want to be heard orally in opposition to
the Settlement, either personally or through your own separate
counsel, you must state in your written objection your intention to
appear at the Approval Hearing.
If the Settlement is approved by the Court, it
will result in a release by the Plaintiffs and all Class Members,
including all their heirs, successors in interest, assigns,
transferees and grantees of all their claims against the Defendants
and any other insured under the Policy arising out of or in any way
relating to PPA's non-disclosures of allegedly material information
about the IOTV Contract or any other claims that could have been
asserted in the Action.
ADMINISTRATION OF THE SETTLEMENT
AGREEMENT
Crawford Class Action Services is the
Administrator of this Settlement. The Administrator will oversee
the claims processes (described below) and will manage and
distribute the Total Settlement Amount including any Reserve
Savings.
Those Class Members who wish to receive
compensation from the Net Settlement Amount must mail or otherwise
submit a completed Claim Form and any supporting documents to the
Administrator, no later than April 5,
2014, (the "Claims Bar Deadline") at the following
address:
Crawford Class Action Services
180 King Street South, Suite 610
Waterloo, Ontario
N2J 1P8
Tel: 1-855-823-0652
The Class Members who file a valid claim will be
paid a pro rata share of the balance of the settlement funds
after payment of fees, expenses, and taxes (the "Net Settlement
Amount"). The long-form notice contains the complete details of the
process for filing a Claim Form and how the Net Settlement Amount
will be distributed.
PLEASE DO NOT CONTACT THE COURT WITH INQUIRIES
ABOUT THE CLASS ACTION OR THE SETTLEMENT. All inquiries should be
directed to the Administrator or Rochon Genova LLP.
PUBLICATION OF THIS NOTICE HAS BEEN AUTHORIZED
BY
THE ONTARIO SUPERIOR COURT OF
JUSTICE
SOURCE Crawford & Company (Canada) Inc.