Fuwei Films (Holdings) Company Ltd. Case 10/19/2007

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Company Name(s): 
Fuwei Films Company
Case Name: 
Fuwei Films (Holdings) Company Ltd. Case 10/19/2007
Case Status: 
Lawsuit Filed
Affected Securities
NASDAQ: FFHL
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/19/2007
Class Period Begin: 
12/19/2006
Class Period End: 
11/12/2007
Court of Filing: 
U. S. District Court for the Southern District of New York
Date Settled: 
04/27/2011
Settlement Amount: 
$2,150,000
Deadline to Participate in Settlement: 
03/10/2011
Summary: 

January 2011 - To all person who purchased the publicly- traded common stock of Fuwei Films (holding), Co., Ltd. during the period from December 19, 2006 though November 12, 2007, inclusive, you rights may be affected by the proposed litigation. A hearing will be held on April 27, 2011 in New York, New York (the "Settlement Hearing") for the purpose of determining: (1) whether the proposed Settlement consisting of the sum of $2,150,000, of which $200,000 will not be provided until 10 business days after the Settlement is approved by the Court or July 1, 2011, whichever date is later, should be approved by the Court as fair, reasonable, and adequate; (2) whether the proposed plan to distribute the settlement proceeds is fair, reasonable, and adequate; (3) whether the application for an award of attorneys' fees of one-third of the Settlement amount and reimbursement of expenses of not more than $75,000 should be approved; and (4) whether the Litigation should be dismissed with prejudice. Again, If you purchased common stock of Fuwei Films (Holdings), Co., Ltd. during the class period from December 19, 2006 through November 12, 2007, inclusive, your rights may be affected by the Settlement of this action.

October 2007 - According to a press release dated October 19, 2007, the complaint charges that FFHL and certain of its present and former officers, directors, and control persons violated Sections 11 and 15 of the Securities Act of 1933 by issuing a false and misleading Registration Statement and Prospectus (collectively the “Registration Statement”) in connection with the Company’s IPO.
 
According to the Complaint, on December 19, 2006 the Company commenced its IPO priced at $8.28 per share for 3,750,000 shares of Company stock. On December 22, 2006 FFHL announced the closing of its IPO and reported gross proceeds, including over-allotments, of approximately $35.6 million. The Complaint asserts that FFHL’s Registration Statement was false and misleading because the Company: (i) failed to reveal that its main operating assets were obtained through transactions that may not have been valid under Chinese law; (ii) failed to provide complete disclosures as to the circumstances of the Company’s acquisition of its main operating assets; and (iii) inaccurately stated that the likelihood of any action or recourse in connection with the Company’s acquisition of its main operating assets was remote.
 
The Complaint further alleges that on June 25, 2007 the Company announced that three of the Company’s major shareholders, one of whom is a Company director, were under investigation. On October 16, 2007 the Company announced that authorities in China had issued arrest notices for the same three individuals on suspicion of violations of Chinese laws and regulations. The Complaint asserts that these charges related to the Company’s acquisition of its main operating assets. As a result of these adverse disclosures, FFHL’s stock price dropped, damaging investors.