Vaughan Foods Announces Settlement of Lawsuit Challenging the Reser's Merger
September 12 2011 - 1:22PM
Vaughan Foods, Inc. (OTCBB:FOOD), announced that it has reached an
agreement in principle to settle the purported class action lawsuit
challenging the proposed merger of Vaughan and Reser's Fine Foods,
Inc. ("Reser's").
As previously disclosed, Vaughan, Reser's, and Reser's
Acquisition, Inc., an Oklahoma corporation and a wholly owned
subsidiary of Reser's ("Acquisition"), entered into an Agreement
and Plan of Merger, dated July 6, 2011, (the "Merger Agreement"),
pursuant to which Reser's would acquire Vaughan for an aggregate
purchase price of $18.25 million payable to the shareholders of
Vaughan and certain holders of options and warrants to purchase
shares of Vaughan common stock, as a result of a merger
of Acquisition with and into Vaughan (the "Merger").
In conjunction with the Merger, Vaughan filed proxy material (as
amended, the "Proxy Statement") with the Securities Exchange
Commission (the "SEC") containing detailed information and relevant
documents relating to the Merger. Included in the Proxy Statement
was a brief description of a putative shareholder lawsuit, styled
as Kevin Wolters v. Herbert Grimes et al. (the "Action"), filed
against the individual members of the Board of Directors of
Vaughan, Vaughan, Reser's and Acquisition in the United States
District Court, Cleveland County, Oklahoma (the "Court"). Effective
as of September 9, 2011, the parties to the Action entered into a
Memorandum of Agreement, pursuant to which the Action would be
settled in consideration for Vaughan having made certain additional
disclosures relating to the Merger, which were included in a
Current Report on Form 8-K filed with the SEC on September 9, 2011,
which can be accessed at
http://sec.gov/Archives/edgar/data/1376556/000093041311005961/c66851_8-k.htm
and the defendants' agreement to pay plaintiff's reasonable
legal counsel's fees and disbursements in an amount to be
negotiated or, if no agreement can be reached, an amount to be
determined by the Court. The settlement is subject to the
parties agreeing on, executing and presenting to the Court within
60 days a formal Stipulation of Settlement that will dismiss the
Action with prejudice against all the defendants.
About Vaughan Foods, Inc.
Vaughan Foods is an integrated manufacturer and distributor of
value-added, refrigerated foods and is uniquely able to distribute
fresh-cut produce items along with a full array of value-added
refrigerated prepared foods multiple times per week. Vaughan sells
to both food service and retail sectors. Its products consist of
fresh-cut vegetables, fresh-cut fruits, salad kits, prepared
salads, dips, spreads, soups, sauces and side dishes.
The Vaughan Foods, Inc. logo is available at
http://www.globenewswire.com/newsroom/prs/?pkgid=4726
CONTACT: Investor Relations Contact
Vaughan Foods, Inc.
Gene Jones
Secretary, Treasurer and Chief Financial Officer
405.794.2530