On November 20, 2003, an Order of Dismissal was entered by the court. On August 11, 2003, an Order Granting Plaintiffs' Motion For Approval Of Proposed Notices Of Voluntary Dismissal was decided by the court. On July 22, 2003, a Stipulation and Order Shortening Time For Hearing On Plaintiffs' Motion For Approval Of Proposed Notices Of Voluntary Dismissal was entered by the court.
The original complaint asserts claims under the Securities Act of 1933 and the Securities Exchange Act of 1934. The complaint alleges that DHC was controlled by Empresas La Moderna, the largest cigarette producer in Mexico. The complaint further alleges that the conversion of the DNAP Preferred Stock into DHC Common Stock eliminated the rights and preferences of the DNAP Preferred Stockholders.
Specifically, the complaint alleges that the Aug. 13, 1996 proxy statement/prospectus that DNAP and DHC disseminated to DNAP shareholders, recommending approval of the merger, improperly failed to disclose that the real reasons for the merger were (1) to realize value for a strain of high-nicotine tobacco that DNAP had illegally developed for tobacco company Brown & Williamson, and (2) to increase the indemnity coverage of DNAP's officers and directors to insulate them from financial liability for those illegal acts.
The complaint further alleges that after the DNAP-DHC merger was consummated, DNAP pleaded guilty in January 1998 to conspiracy to violate the Tobacco Seed Export Law. The defendants named in the complaint are Empresas La Moderna, DHC, DNAP, and several officers and directors of these companies.
NOTE: The class was initially defined as the holders of $2.25 Convertible Exchangeable Preferred Stock ("Preferred Stock") of Defendant DNA Plant Technology Corporation ("DNAP") whose stock was exchanged for DNAP Holding Corporation ("DHC") common stock, as a result of the reverse triangular merger in which DNAP became a wholly owned subsidiary of DHC ("Merger").
According to a press release dated August 22, 2003, this is a notice that a lawsuit brought on your behalf, In re DNAP Securities Litigation, Case No. C-99-0048-WHA, pending in the United States District Court for the Northern District of California, is being voluntarily dismissed by the plaintiffs who filed the case. The suit, which was filed in January 1999, alleges that Bionova, DNAP's former directors, and certain Bionova affiliates misrepresented and concealed information in the September 1996 concerning activities covertly engaged in by DNAP to develop high-nicotine tobacco. The suit originally asserted claims under the Securities Act of 1933 and the Securities Exchange Act of 1934. The District Court dismissed all claims in September 2000. In September 2002, the Ninth Circuit Court of Appeals partly reversed the judgment, allowing plaintiffs to proceed with their Securities Act claims.
The above class has not yet been certified for the lawsuit. The parties have been engaging in discovery. Plaintiffs have reached a settlement of their own claims for $250,000, and seek to dismiss the case. Thirty percent of the amount, or $75,000, will be deducted for the contingent fee payable to plaintiffs' counsel, and a further $28,000 will be deducted for expenses that counsel have incurred in the case. The remaining $147,000 will go to compensate the named plaintiffs for their claimed losses of over $1.5 million from investing in DNAP preferred stock.