According to the complaint, Plaintiff brings this shareholder class action on behalf of the public common stockholders of Spectrum Control, Inc. (“Spectrum” or the “Company”) and on behalf of Spectrum against Spectrum’s Board of Directors (the “Board” or the “Individual Defendants”) for their breaches of fiduciary duties arising out of their attempt to sell the Company to API Technologies, Corp. (“API”) (the “Proposed Transaction”) pursuant to a materially misleading definitive proxy statement filed on Schedule 14A with the Securities and Exchange Commission ("SEC") on May 4, 2011 (the "Definitive Proxy").
In the Definitive Proxy, Defendants have announced that a special meeting of shareholders of Spectrum will be held on Friday, May 27, 2011 at 10:00a.m. Eastern time, at the Company's headquarters and have stated that the Board has unanimously determined that the "merger is advisable, fair and in the best interests of the company and its shareholders" and has recommended that Spectrum shareholders vote "FOR" the approval of the Proposed Transaction. Defendants are asking Spectrum shareholders to base their vote on the Proposed Transaction based on the information contained in the Definitive Proxy. In connection with the Definitive Proxy, however, Defendants have breached their fiduciary duty of candor by failing to disclose material information to the Spectrum shareholders necessary for them to determine whether to vote in favor of the Proposed Transaction. Defendants have also violated Section 14(a) of the Exchange Act and Rule 14a-9 promulgated thereunder, 17 C.F.R. §240.14a-9, by omitting material facts necessary to render the Definitive Proxy non-misleading.
The misrepresentations and omissions in the Definitive Proxy are material to
Plaintiff and the class he seeks to represent. Without this information, Plaintiff and the other Spectrum shareholders will be deprived of their entitlement to cast a fully informed vote should these misrepresentations and omissions not be cured prior to the May 27, 2011 vote on the Proposed Transaction.
On May 20, 2011, the Court released an order granting Plaintiff's motion requesting to seal Plaintiffs' Emergency Motion to Compel Deposition of Defendant API Technologies Corp.
On May 24, 2011, the Court granted Plaintiff's unopposed motion to stay the case pending approval of a settlement in the parallel Pennsylvania state court action, captioned Balanced Beta Fund v. Southivorth, et al., Case No. 11724-2011 (Ct. Common Pleas, Erie County).
On November 2, 2011, the Court ordered the case dismissed with prejudice.