In February 2008, Siskinds LLP filed a proposed class action (the “Action”) against Gammon Gold Inc. ("Gammon"), certain of its current and former officers and directors (the “Gammon Defendants”), and the underwriters of its April 19, 2007 prospectus (the “Underwiters”) (the “Prospectus”). The Action arises out of Gammon's April 2007 offering to the public of 10 million shares at a price of $20 per share.
The original Statement of Claim alleged that the defendants made various misrepresentations in the Prospectus relating, among other things, to the production of gold equivalent ounces at Gammon's principal mining property. On July 11, 2008, Siskinds LLP filed an amended statement of claim and expanded the action to include all investors that acquired securities of Gammon during the period October 10, 2006 to August 10, 2007 (the “Class Period”).
On March 16, 2010, the Ontario Superior Court of Justice (the “Court”) certified the Action as a class proceeding. The Court found, however, that the Plaintiff's statement of claim did not disclose a cause of action in fraudulent misrepresentation and it conditionally adjourned the Plaintiff’s motion for certification of a claim in conspiracy. The Court further declined to certify a claim on behalf of secondary market purchasers (i.e. persons who purchased Gammon shares on the TSX), declined to certify the Plaintiffs’ common law misrepresentation claim, and declined to certify a global class. The certified class was limited to persons that purchased Gammon shares from the Underwriters in Canada. The Plaintiff sought leave to appeal these findings, but was only granted leave to appeal the adjournment of his conspiracy claims.
The Plaintiff’s appeal was allowed, but certification of the Plaintiff’s conspiracy claims was returned to the motions judge, the Honourable Justice Strathy, for determination. On October 11, 2011 and January 10, 2012, the Parties appeared before Justice Strathy, who subsequently ruled that the class definition be amended to include all persons and entities, other than Excluded Persons, who acquired securities of Gammon Gold during the period from October 10, 2006 to August 10, 2007 (the “Class”). The Honourable Justice Strathy further ruled that the cause of action in conspiracy be certified on behalf of both primary and secondary market purchasers. The Gammon Defendants have sought leave to appeal these findings.
On October 5, 2012, the parties reached an agreement to settle the action in the amount of $13.25 million (the “Settlement Agreement”). You may view a copy of the Settlement Agreement here: [Settlement Agreement].
The Settlement Agreement and Plan of Allocation were approved by the Court by order issued December 4, 2012.
The claim deadline has now passed and all claims have been paid.