MEMPHIS, Tenn., Aug. 22, 2014 /PRNewswire/ -- Chimicles &
Tikellis LLP of Haverford, PA
today announced that W2007 Grace Acquisition I, Inc. (OTCBB: WGCBP
and WGCCP) ("W2007 Grace") and its affiliates have entered into a
memorandum of understanding ("MOU") with respect to a proposed
settlement of a class action lawsuit brought by W2007 Grace
preferred shareholders David
Johnson, Patrick Lynch,
Roberto Verthelyi and Frederick Shearin against W2007 Grace and other
defendants ("Action") and pending in the United States District
Court for the Western District of Tennessee ("Court"), Civil Action No.
2:13-cv-02777.
The plaintiffs allege that the defendants breached, or aided and
abetted the breach of, fiduciary and contractual obligations to
W2007 Grace's preferred shareholders and sought to recover damages
on behalf of preferred shareholders who held W2007 Grace Series B
and C preferred stock ("Preferred Stock") at any time from
October 25, 2007 to the present.
The defendants maintain that the Action has no merit and have
moved to dismiss the Action in its entirety. On August 20, 2014, taking into account the
litigation risks and costs and the benefits of
avoiding those risks or prolonging the costs, the
defendants entered into the MOU with the plaintiffs to resolve the
Action. For the settlement to become binding, it requires the
drafting and execution of a definitive Stipulation of Settlement
("Stipulation") and Court approval. The MOU contemplates the
following key settlement terms:
- The parties will seek certification of two settlement classes
comprised of: (1) persons who hold Preferred Stock as of
August 22, 2014 and through the date
of the closing of the merger described below; and (2) persons who
hold or held Preferred Stock and sold some or all of their
Preferred Stock on or after October 25,
2007 and suffered a loss. Both settlement classes are
subject to certain requirements and exclusions.
- W2007 Grace will be merged with and into a new company, and
holders of Preferred Stock at the time of merger will receive
$26.00 per share upon surrender of
their shares of Preferred Stock. If the Court preliminarily
approves the Stipulation, W2007 Grace will distribute a proxy
statement seeking the preferred shareholders' approval of the
merger and certain amendments to the W2007 Grace charter, which
will be described in the proxy statement. W2007 Grace will
consummate the merger only if it obtains the requisite shareholder
and Court approvals.
- W2007 Grace will pay $6.0 million
into a settlement fund which, following the deduction of certain
expenses, will be distributed in accordance with a plan of
allocation prepared by plaintiffs to persons who sold W2007 Grace
Preferred Stock on or after October 25,
2007 and suffered a recognized loss. Defendants and their
affiliates will not be eligible to receive a settlement fund
distribution. Private sales to defendant PFD Holdings, LLC are also
excluded.
- Any balance remaining in the settlement fund will be
distributed pro rata to persons who hold Preferred Stock as
of August 22, 2014 and continue to
hold their Preferred Stock at the time of the merger.
- Subject to Court approval, W2007 Grace will pay plaintiffs'
attorneys' fees and certain litigation expenses separately so as
not to diminish the settlement consideration being paid to class
members.
In addition, the Stipulation and consummation of any settlement
will be subject to customary conditions, including: that notice of
the proposed settlement will be sent to class members only if the
Court grants preliminary approval of the Stipulation; and, final
approval of the proposed settlement by the Court.
There can be no assurance that the parties will ultimately enter
into a Stipulation, or that the Court will approve the Stipulation
or the proposed settlement even if the parties were to enter into
such Stipulation. In such event, the proposed settlement and
benefits as contemplated by the MOU may be terminated.
Plaintiffs and the proposed settlement classes are represented
by Chimicles & Tikellis LLP and Hagler
Bruce & Turner, PLLC.
CONTACT INFORMATION:
CHIMICLES & TIKELLIS LLP
Nicholas E. Chimicles
Kimberly Donaldson Smith
(kds@chimicles.com)
Catherine Pratsinakis
(cp@chimicles.com)
One Haverford Centre
361 West Lancaster Avenue
Haverford, PA 19041
Telephone: (610) 642-8500/(888) 805-7848
Fax: (610) 649-3633
www.chimicles.com
For over 30 years Chimicles & Tikellis has pursued hundreds
of securities, consumer and shareholder rights cases and recovered
billions of dollars for their clients. The firm is nationally
recognized, and their litigators hold many professional honors and
distinctions.
HAGLER BRUCE & TURNER,
PLLC
Van D. Turner, Jr.
(vturner@hbtlaw.net)
2650 Thousand Oaks Boulevard, Suite 2140
Memphis, Tennessee 38118
Telephone: (901) 290-6610
Fax: (901) 522-9168
www.hbtlaw.net
Hagler Bruce & Turner
practices primarily in Tennessee
and Mississippi and concentrates
its practice on business litigation, business transactions,
government relations, municipal law, and estate planning.
SOURCE Chimicles & Tikellis LLP