According to a press release dated December 10, 2009, the complaint alleges that, throughout the Class Period, defendants failed to disclose material adverse facts about the Company’s true financial condition, business and prospects. On August 16, 2007, Canadian Superior and Challenger Energy jointly issued a press release announcing that BG International Limited (“BG”) entered into a farm-in agreement (“Farm-In Agreement”) and joint operating agreement (“Joint Operating Agreement”) with Canadian Superior to participate in the exploration drilling and development of the Intrepid Block 5(c) (the “Joint Venture”). Specifically, the complaint alleges that defendants failed to disclose: (i) that the discovered reserves for Intrepid Block 5(c) were below the economic threshold for development; (ii) that Canadian Superior had notified BG of its intention to commence a corporate sale in November 2008 so that it could overcome the financial constraints that were preventing it from meeting its funding obligations under the Joint Operating Agreement; (iii) that Canadian Superior had violated the terms of the Joint Operating Agreement with BG, thus potentially endangering its interest in the Joint Venture; (iv) that Canadian Superior failed to timely pay Maersk, the drilling operator, and potentially other contractors, thereby jeopardizing the operation of the Joint Venture; and (v) as a result of the foregoing, defendants lacked a reasonable basis for their positive statements about the Company, its prospects and earnings growth.
On February 12, 2009, Canadian Superior issued a press releasing announcing the “appointment, upon the application of BG of an interim Receiver of its participating interest in Intrepid Block 5(c). Pursuant to the Court Order, the Receiver, in conjunction with BG, will operate the property and conduct the flow testing of the Endeavour well which Canadian Superior believes will validate its operations to date.” In response this announcement, shares of the Company’s stock fell $0.40 per share, or 44%, from a close of $0.90 per share on February 11, 2009, the last trading date before the announcement, to close at $0.50 per share, on extremely heavy trading volume.
On March 29, 2010, Judge Shira A. Scheindlin appointed Gino Ströker as lead plaintiff and approved Robbins Geller Rudman & Dowd LLP and Holzer Holzer & Fistel LLC as co-lead counsel. On April 30, 2010, an Amended Complaint was filed. According to the Complaint, Canadian Superior Energy, Inc., is no longer named a defendant in the action as it sought protection under the Canadian bankruptcy and reorganization laws and has since reorganized. On June 4, 2010, the defendants filed a motion to dismiss an Amended Complaint.
On August 6, 2010, the Court entered the Opinion and Order #99288 signed by Judge Shira A. Scheindlin, granting in part and denying in part the defendants’ motion to dismiss. According to the Order, any claims on behalf of potential class members who purchased Canadian Superior shares on a foreign exchange are dismissed with prejudice. All claims against Bilton and Snethun are dismissed without prejudice and with leave to amend. Finally, all claims derived from misstatements of Canadian Superior's liability under the JOA or relating to the failure to disclose accounting failures in breach of the JOA are dismissed without prejudice and with leave to amend. Any amended complaint must be filed within thirty (30) days of the date of this Order.
On March 14, 2011, Judge Shira A. Scheindlin signed the Stipulation and Order of Dismissal With Prejudice, dismissing the action against the remaining three individual defendants.
On June 28, 2011, a motion was filed, U.S. Lead Plaintiff's Notice of Motion and Unopposed Motion for Preliminary Approval of Settlement. According to the Settlement Agreement, the settlement amount is $5,200,000 and will settlement claims against the defendants in U.S. and Canadian Courts. The settlement was preliminarily approved on June 30, 2011. The final settlement hearing was set for October 4, 2011.
According to the Memorandum Opinion and Order dated November 16, 2011, plaintiffs' motion for Final Approval of Settlement and Plan of Allocation of Settlement Proceeds is granted. Co-Lead Plaintiffs' Counsel's motion for an Award of Attorneys' Fees and Expenses is granted, but not for the amounts requested. The Clerk of the Court is directed to close this motion [Docket No. 62], this case, and all related cases.