Merix Corporation Class Action
SEPTEMBER 2011 - According to the Notice:
What Is The Lawsuit About?
The litigation is a class action filed by Plaintiffs on behalf of persons or entities that held any Merix Corporation (“Merix”) common stock continuously from October 6, 2009 through and including February 16, 2010, the date of the closing of the merger of Merix and Viasystems Group, Inc., (“Viasystems”). Defendants were directors of Merix at the time of the Merger. Plaintiffs Consolidated Amended Complaint (“CAC”) alleges that Defendants breached their fiduciary duties of loyalty, good faith and full disclosure to the shareholders of Merix in connection with the sale of Merix to Viasystems (the “Merger”). Defendants deny any and all wrongdoing and maintain that they committed no breach of any duty owing to Merix shareholders and exercised in good faith their reasonable business judgment in recommending and approving the merger of Merix with Viasystems Group, Inc.
Who Is Included In The Settlement?
The Court directed that, for purposes of the proposed settlement, the Class includes: All persons or entities that held Merix common stock continuously from October 6, 2009 through the consummation of the merger on February 16, 2010 (the “Class”). Excluded from the Class as defined are defendants named herein and any person, firm, trust, corporation or other entity controlled by or affiliated with any Defendant and holders of Merix common stock who were also bondholders of Merix. Any person who previously elected to opt-out of the Class on or before June 25, 2011, is excluded from participating in, receiving the benefits of or objecting to the Settlement.
What Does The Settlement Provide?
In exchange for the Settlement and dismissal of the Action, Defendants, after any final approval, shall pay or cause to be paid $1,500,000 into a Settlement fund, with interest earned thereupon, to be divided among all eligible Class Members with recognized claims on a pro-rata basis, after plaintiffs’ administrative costs incurred in connection with the settlement, attorneys’ fees, expenses, costs of litigation, and all other administrative costs awarded by the Court, are paid.
Reasons for the Settlement?
Because of the risks associated with continuing to litigate and proceeding to trial, there was a danger Plaintiffs would not have prevailed on any of their claims, in which case the Class would receive nothing. The amount of damages suffered by the Class was and continues to be challenged by Defendants. Had the Action gone to trial, Defendants would have asserted that they had not breached any fiduciary duty to the Class, that the merger consideration and process was fair and that in any event, Class Members suffered no damages. In favoring settlement, Plaintiffs also considered the uncertainty of the following legal issues, among others, underlying the allegations in the litigation:
• Whether Defendants breached a duty to maximize shareholder value with respect to the Merger;
• Whether Defendants complied with or violated the duties of good faith, loyalty, and/or candor with respect to the Merger;
• Whether any breaches of fiduciary duty by Defendants with respect to the Merger caused Merix shareholders to suffer monetary damages, and the specific amounts that would compensate shareholders for such damages;
• Whether Defendants’ Proxy dated January 4, 2010, included any material misrepresentations and/or failed to disclose material information regarding the Merger;
• Whether Plaintiffs suffered damages as a result of any alleged misconduct by Defendants; and
• Whether a jury would determine that the price accepted by Defendants fell within a reasonable range of potential valuations and thus, Plaintiffs suffered no damages.
The Court did not decide in favor of Plaintiffs or Defendants. Instead, both sides agreed to a settlement. In this manner, they avoid the risks and costs of a trial and lengthly appeals, and Class Members will receive compensation. Plaintiffs and their attorneys believe the settlement is in the best interests of all Class Members. Defendants in this Action, while continuing to deny all allegations of wrongdoing and liability whatsoever, recognize the expense, risks and uncertain outcome of litigation and appeals, especially in a complex action such as this, and wish to avoid the risks and costs associated with future litigation.