SETTLEMENT
- What is this Class Action about?
- Who are the Defendants?
- Who is a Class Member?
- Who is an Excluded Person?
- Who is an Affiliated Defendant?
- What is the Class Period?
- Who are Class Counsel?
- How did the Settlement come about?
- What is the amount of the Settlement?
- What are the Released Claims?
- Who are the Releasors and the Releasees?
- Have the Defendants admitted liability?
- What compensation will a Class Member receive under the Settlement?
- Can the Settlement be terminated?
- How can I find out more about the specific terms of the Settlement Agreement?
- Has the Court approved the Settlement Agreement?
- How has the public been notified about the Settlement?
REGISTERING A CLAIM
- Who should register a claim for compensation under the Settlement?
- How do I take part in this Settlement?
- How do I submit a claim if I do not have access to a computer with an internet connection?
- What is the Claims Bar Deadline?
- Do I have to pay to take part in this Settlement?
- Can I amend my Claim after it has been submitted to the Administrator?
OPTING OUT
CLASS COUNSEL FEES HEARING
CLAIMS ADMINISTRATION
- Who is the Administrator?
- What does the Administrator do?
- How was the Administrator appointed?
- How do I contact the Administrator?
- How will I find out about the Administrator’s evaluation of my claim?
- If I disagree with the Administrator’s calculation of my compensation from the Settlement, what do I do?
- Who is the Referee and what does the Referee do?
- What is the cost of having a Referee review the Administrator’s decision of my claim?
- When will Class Members receive compensation from the Settlement Fund?
What is the Southwestern Class Action about? [top]
In 2007, the plaintiffs commenced class actions against Southwestern Resources Corp. (“SWR”) and John G. Paterson (together with SWR, the “Defendants”) and others in the Ontario Superior Court of Justice, the Supreme Court of British Columbia and Québec Superior Court. The plaintiffs allege that the Defendants misrepresented the results of SWR’s Boka exploration activities to the Class Members.
Who are the Defendants? [top]
The Defendants are Southwestern Resources Corp. (“SWR”) and John G. Paterson, the former President, Chief Executive Officer of SWR.
Who is a Class Member? [top]
Class or Class Members means all persons, other than Excluded Persons, who acquired securities of Southwestern Resources Corp. (“SWR”) during the Class Period, provided that if the person acquired SWR securities in the period from December 3, 2002 to June 19, 2007, the person held some or all of those securities at the close of trading on the TSX on June 19, 2007, and if the person acquired SWR securities in the period from June 20 to July 18, 2007, the person held some or all of those securities at the close of trading on the TSX on July 18, 2007.
Who is an Excluded Person? [top]
"Excluded Person" means: (a) John G. Paterson (“Paterson”), Margaret Joan Paterson, wife of Paterson (“Joan”), Joan’s children and her sisters, and the heirs, executors, administrators, successors, and assigns of each of Paterson and Joan; (b) Southwestern Resources Corp. (“SWR”), Affiliated Defendants and Chubb Insurance Co. of Canada and Encon Inc. and their respective past and present directors, officers, subsidiaries, affiliates, employees, trustees, servants, consultants, underwriters, advisors, representatives, predecessors, successors and assigns; and (c) the entities in which Joan, each Defendant or any subsidiaries or Affiliated Defendants of a corporate Defendant have an interest and includes, without limitation, Global Gold Corporation.
Who is an Affiliated Defendant? [top]
“Affiliated Defendant” means: (i) Margaret Joan Paterson, wife of John G. Paterson; and (ii) an affiliate of any of the Defendants under the definition of “affiliated body corporate” under subsection 1(4) of the Ontario Business Corporations Act, R.S.O. 1990, c. B-16, as at the date of the Settlement Agreement and includes Sugna Limited and Glengarry Resource Management Inc. but excludes Global Gold Corporation.
What is the Class Period? [top]
The Class Period means the period from December 3, 2002 to and including July 18, 2007.
Who are Class Counsel? [top]
The action was litigated by the following law firms, collectively known as Class Counsel:
Harvey T. Strosberg, Q.C.
Sutts, Strosberg LLP
Barristers and Solicitors
600-251 Goyeau Street
Windsor, ON N9A 6V1
Telephone: 519.561.6296
Facsimile: 519.561.6203
Email: harvey@strosbergco.com
Monique L. Radlein
Siskinds LLP
680 Waterloo Street
London, ON N6A 3V8
Telephone: 519.672-2121
Facsimile: 519.672-6065
Email: monique.radlein@siskinds.com
Simon Hebert
Siskinds Desmeules s.e.n.c.r.l.
Les Promenades du Vieux-Québec
43 Rue, Buade, Bur 320
Québec City, QC G1R 4A2
Telephone: 418.694.2009
Facsimile: 418.694.0281
Email: simon.hebert@siskindsdesmeules.com
J.J. Camp
Camp Fiorante Matthews
Lawyers
4th floor, Randall Building
555 Georgia Street West
Vancouver, BC V6B 1Z5
Telephone: 604.331.9520
Facsimile: 604.689.7554
Email: jjccamp@cfmlawyers.ca
How did the Settlement come about? [top]
The Settlement Agreement was reached after more than eight months of arduous and protracted arm’s-length settlement negotiations, in the course of which numerous draft settlement agreements were produced and revised. The definitive Settlement Agreement was entered into on September 5, 2008, which resolved the litigation for the sum of $15,500,000, plus an additional $27,500 contributed as a result of a settlement between Southwestern Resources Corp. and Global Gold Corporation in a related litigation.
What is the amount of the settlement? [top]
The Defendants have collectively paid the sum of $15,527,500 million to settle the claims of all Class Members and the costs of the litigation and administration (the “Settlement Amount”). Of the $15,527,500, Southwestern Resources Corp. paid $8,327,500, John G. Paterson and his wife paid $7.2 million, and SWR’s insurers paid $1 million. The courts of Ontario, Québec and British Columbia have approved the Settlement as fair and reasonable and in the best interests of Class Members.
What are the Released Claims? [top]
“Released Claims” means any and all manner of claims, demands, actions, suits, causes of action, whether class, individual or otherwise in nature, whether personal or subrogated, damages whenever incurred, and liabilities of any nature whatsoever, including interest, costs, expenses, Administration Expenses (as defined in the Settlement Agreement), penalties, class counsel fees and lawyers’ fees, known or unknown, suspected or unsuspected, in law, under statute or in equity, that Releasors, or any of them, whether directly, indirectly, derivatively, or in any other capacity, ever had, now have, or hereafter can, shall, or may have as against the Releasees, relating in any way to the purchase, sale, pricing, marketing or distributing of securities of Southwestern Resources Corp. (“SWR”), or to any representations made to anyone concerning SWR, its operations or the securities of SWR, or relating to any conduct alleged (or which could have been alleged) in the Actions (as defined in the Settlement Agreement), including, without limitation, any such claims which have been asserted, would have been asserted or could have been asserted, whether in Canada or elsewhere, as a result of the purchase of securities of SWR.
Who are the Releasors and the Releasees? [top]
“Releasors” means, jointly and severally, the Plaintiffs, the Class Members (excluding those Class Members who opt out), including any person having a legal and/or beneficial interest in the securities of Southwestern Resources Corp. purchased or acquired by these Class Members, and their respective past and present directors, officers, employees, agents, trustees, servants, consultants, underwriters, advisors, representatives, heirs, executors, attorneys, administrators, guardians, estate trustees, successors and assigns, as the case may be.
“Releasees” means Margaret Joan Paterson (“Joan”), Joan's children and her sisters, John G. Paterson (“Paterson”) and Southwestern Resources Corp., Affiliated Defendants, Global Gold Corporation, Chubb Insurance Co. of Canada and Encon Inc. and their respective past and present directors, officers, employees, trustees, servants, consultants, underwriters, advisors, representatives, successors, assigns and the heirs, executors, administrators, successors and assigns of Paterson and Joan, and Global Gold Corporation and its past and present officers, directors, successors and assigns.
Have the Defendants admitted liability? [top]
The Defendants do not admit any wrongdoing or liability on their part. The settlement is a compromise of disputed claims.
What compensation will a Class Member receive under the Settlement? [top]
Class Members who submit properly completed claims and all required supporting documentation to the Administrator and who have suffered a Net Loss (as defined in the Distribution Plan) will be eligible for compensation from the Settlement Amount less any funds approved by the courts for payment of administration expenses and Class Counsel’s fees and disbursements (the “Compensation Fund”).
Class Members whose claims have been authorized by the Administrator will be paid a portion of the Compensation Fund calculated as a pro-rata share of the Compensation Fund based on his/her/its Nominal Entitlement as calculated pursuant to the calculation found at paragraph 31 of the Distribution Plan. To review the Distribution Plan, click here.
For the purposes of determining the amount an Authorized Claimant may recover pursuant to this Settlement, the Plan reflects the Plaintiffs’ damages theory, namely, that the Share value was artificially inflated by the misrepresentation that the reported results of SWR’s Boka exploration activities were accurate and could be relied upon by investors, and that several subsequent releases acted to reduce the inflation of the Share value namely: (i) on June 18, 2007, SWR issued a press release announcing a delay in release of the Boka pre-feasibility study and on June 19, 2007, SWR issued a press release announcing the sudden and immediate resignation of SWR’s President and CEO John Paterson. SWR’s Share value declined over the 10 trading days following these disclosures; and (ii) on July 19, 2007, SWR issued a press release disclosing unspecified deficiencies in SWR’s control procedures for the Boka project, and announcing the withdrawal of all previously announced results for the Boka project. SWR’s Share value experienced a significant decline over the 10 trading days following this disclosure.
Can the Settlement be terminated? [top]
Yes. The Defendants have negotiated an Opt Out Threshold into the Settlement Agreement. If the Opt Out Threshold is exceeded, that is, if Class Members holding a significant number of Southwestern Resources Corp. securities, purchased in the Class Period, opt out of the Settlement, the Defendants may exercise their discretion to terminate the Settlement Agreement.
How can I find out more about the specific terms of the Settlement Agreement? [top]
Copies of the Settlement Agreement, as well as the Distribution Protocol, judgments and Notices concerning this settlement may be downloaded from the Documents & Notices page of this website. Click here to reach the Documents & Notices page.
Has the Court approved the Settlement Agreement? [top]
The settlement has been approved by the Ontario Superior Court of Justice, the Québec Superior Court and the Supreme Court of British Columbia.
How has the public been notified about the Settlement? [top]
Class Members were first notified of this settlement during the court approved notice program, which took place in October, 2008. This notice program, which advised Class Members of the hearing dates on which the approval of the Settlement Agreement would be sought and their right to make objections, involved publishing the first notice in certain newspapers and posting the first notice on the website www.southwesternclassaction.com.
Following the approval of this Settlement Agreement, a similar notice program was established to advise Class Members of claim and opt out procedures. In addition to the notice mechanisms noted above, the second notice has been electronically transmitted to brokers for dissemination to their clients and mailed to Class Members identified by Computershare Limited and Broadridge Financial Solutions Inc. as having an interest in the securities of Southwestern Resources Corp.
Who should register a claim for compensation under the Settlement? [top]
Anyone other than the Excluded Persons who acquired securities of Southwestern Resources Corp. during the Class Period is eligible for compensation pursuant to the Settlement Agreement, so long as they held some or all of those securities at the close of trading on the TSX on June 19, 2007, or at the close of trading on the TSX on July 18, 2007, as the case may be.
How do I take part in this Settlement? [top]
To be eligible to take part in this Settlement, Class Members must submit a signed Claim Form and all required supporting documents to the Administrator not later than 5:00 p.m. Eastern time on June 1, 2009.
Please note that the deadline to register a Claim has passed.
How do I submit a claim if I do not have access to a computer with an internet connection? [top]
Class Members may commence the claim process by telephoning the Claims Administration Help Line at 1-866-669-6615.
What is the Claims Bar Deadline? [top]
“Claims Bar Deadline” means the date by which each Class Member must file a Claim Form and all required supporting documentation (“Claim Package”) with the Administrator, which has been set by the courts as 5:00 p.m. Eastern time on June 1, 2009.
The Administrator must be in receipt of the Claim Package by the Claims Bar Deadline in order for a Class Member to be eligible for compensation pursuant to this Settlement Agreement.
Do I have to pay to take part in this Settlement? [top]
There is no cost to Class Members to submit a Claim Form and receive compensation from the Settlement Fund.
Can I amend my Claim after it has been submitted to the Administrator? [top]
Once you submit your Claim Package to the Administrator, you may continue to amend your Claim until the Administrator has reviewed and accepted your Claim. After the Claim has been accepted by the Administrator, you may only amend your contact information.
Is it possible to opt out of the Settlement? [top]
The deadline to opt out of this class action has expired.
How much are Class Counsel’s Fees? [top]
The courts in Ontario, Québec and British Columbia have fixed Class Counsel fees, including taxes and disbursements in the total amount of $3,209,276.20.
Do I have to pay fees? [top]
No, you will not pay an individual fee to Class Counsel. Class Counsel’s Fees will be deducted from the $15,527,500 in settlement monies.
Who is the Administrator? [top]
Deloitte and Touche LLP has been appointed by the Court to be the Administrator.
What does the Administrator do? [top]
The Administrator is responsible for overall management of the administrative claims process including: Class Member opt out registration; Class Member claim registration; document collection; communications; help desk management; reminders; form transmission; claim management; claim evaluation; analyses; notifications; reporting; appeal procedures; processing of materials to and from the Referee; distribution analyses; Settlement Fund and audit control; and Class Member payout.
How was the Administrator appointed? [top]
The Administrator was appointed by the courts in Ontario, Québec and British Columbia upon the recommendation of Class Counsel.
How do I contact the Administrator? [top]
Click here to contact the Administrator by email, or call 1-866-669-6615, or write: Deloitte & Touche LLP, Suite 1400, 181 Bay Street, Toronto, Ontario M5J 2V1.
How will I find out about the Administrator’s evaluation of my claim? [top]
The Administrator will complete the evaluation of all claims and notify each Claimant of the results of this evaluation using the Online Claims system, unless you have filed a paper Claim Package, in which case the Administrator will advise you of the results of this evaluation by mail.
If I disagree with the Administrator’s calculation of my compensation from the Settlement, what do I do? [top]
The Distribution Plan includes a procedure for Class Members to dispute decisions of the Administrator. Class Members may bring the dispute before a Referee appointed by the Court for that purpose. To review the paragraphs 33-41 of the Distribution Plan which describes the Referee and lays out the procedure for references, click here.
Who is the Referee and what does the Referee do? [top]
Reva Devins has been appointed by the Court to serve as Referee for this claims administration. It is the Referee’s job to determine any disputes Class Members may have with the decisions of the Administrator. To review the paragraphs 33-41 of the Distribution Plan which describes the Referee and lays out the procedure for references, click here.
What is the cost of having a Referee review the Administrator’s decision of my claim? [top]
In order to initiate a review of a dispute, Class Members are required to pay CAN$150 upfront which will be applied to the cost of the reference.
If the Class Member is in any way successful on the reference, the CAN$150 deposit shall be returned to the Class Member, but if totally unsuccessful, the CAN$150 deposit shall be applied to the cost of the reference.
Payment must be made by certified cheque or money order, payable to the Administrator.
When will Class Members receive compensation from the Settlement Fund? [top]
The Administrator will make final distributions of compensation to the Class Members after all Claims have been reviewed and all disputes have been adjudicated.
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