NEW YORK, Jun 17, 2021--(BUSINESS WIRE)--Notice is hereby provided to all persons who held shares of SMTC Corporation ("SMTC" or the "Company") common stock in the period from and including January 3, 2021 through April 5, 2021.
The purpose of this Notice is to inform you of developments with respect to the putative class action lawsuit captioned Quach, et al. v. Bailey, et al., C.A. No. 2021-0104-KSJM (the "Action"), including the dismissal of the Action and an agreement to pay attorneys’ fees and expenses to counsel for Plaintiff in the Action.
On January 3, 2021, the Company entered into a merger agreement with certain entities affiliated with H.I.G. Capital LLC (the "Merger"). On January 21, 2021, the Company filed with the Securities and Exchange Commission ("SEC") a preliminary proxy statement in connection with the Merger (the "Preliminary Proxy Statement").
On February 5, 2021, Plaintiff in the Action, a stockholder of the Company, filed the Action, which named as defendants then-members of the Company’s Board of Directors (the "Board") and alleged, among other things, that the members of the Board violated their fiduciary duties under Delaware law by failing to provide all material information in the Preliminary Proxy Statement required for stockholders to cast an informed vote regarding the Merger. As relief, the complaint sought, among other things, an injunction against the Merger, damages, and an award of attorneys’ and experts’ fees.
Also, on February 8, 2021, Plaintiff filed a motion for expedited proceedings and a motion for a preliminary injunction. On February 18, 2021, Defendants filed their opposition to the motion for expedited proceedings.
The Company and the other defendants have denied that they violated any law or common law duty or engaged in any of the wrongful acts that were or could have been alleged in the Action, and expressly maintain that they diligently and scrupulously complied with their fiduciary and other legal duties.
After the complaint was filed, the Company determined to provide additional public disclosures regarding the Merger, including certain projection line items, to address the allegations in the Action (the "Supplemental Disclosures").
The Supplemental Disclosures were included in the definitive proxy statement filed by the Company on February 18, 2021 in connection with the Merger (the "Definitive Proxy Statement").
On April 20, 2021, the Court approved a stipulation under which the Plaintiff voluntarily dismissed the Action (the "Dismissal Order"). The Court retained jurisdiction solely for the purpose of adjudicating the anticipated application of Plaintiff’s counsel for an award of attorneys’ fees and reimbursement of expenses in connection with the Action (the "Fee and Expense Application").
Following negotiations after the entry of the Dismissal Order, the Company, while denying any and all liability, and maintaining that the Preliminary Proxy Statement contained all material information required for stockholders to cast an informed vote regarding the Merger prior to the Supplemental Disclosures included in the Definitive Proxy Statement, agreed to pay or cause to be paid $175,000 to Plaintiff’s counsel for attorneys’ fees and expenses in full satisfaction of the anticipated Fee and Expense Application. The Court has not been asked to review, and will pass no judgment on, the payment of attorneys’ fees and expenses or their reasonableness.
Attorneys for Plaintiff and Defendants may be contacted as follows:
View source version on businesswire.com: https://www.businesswire.com/news/home/20210617005883/en/
KAHN SWICK & FOTI, LLC
Tel.: (504) 455-1400
MONTEVERDE & ASSOCIATES PC
Juan E. Monteverde
Tel.: (212) 971-1341
Counsel for Plaintiff
ROPES & GRAY LLP
Martin J. Crisp
Tel.: (212) 596-9000
Counsel for Defendants