LDK Solar Co., Ltd. (LDK), a manufacturer of multicrystalline solar wafers, said Wednesday that it reached an agreement to settle the securities class action lawsuit pending in the U.S. District Court of Northern California. As part of the settlement terms, LDK Solar and its insurance carrier will pay a total of $16 million, or about 5% of the alleged damages, to compensate the class members and to cover all legal and administrative expenses.
Under the terms of the agreement, all of the claims in the securities class action lawsuit will be dismissed with prejudice, and all of the defendants will receive a complete release of all the claims alleged in the case, the company said.
The proposed settlement agreement was submitted to the court on February 16, and the court granted preliminary approval of the settlement on February 17. The company pointed out that the settlement is not final until the class receives notice of the settlement and the court grants final approval of the settlement terms.
According to the company, the settlement agreement expressly states that it does not include any finding that any defendant committed any wrongful act. The defendants continue to maintain that the allegations in the case have no merit at all. LDK Solar elected to settle the case to avoid legal expenses, uncertainties and distraction of management.
Xiaofeng Peng, Chairman and CEO of LDK Solar commented, "After more than a two year-period of litigation, LDK Solar believes the settlement is in the best interest of the company and its shareholders. The resolution of this matter puts the litigation behind us and reduces the company's ongoing legal expenses."
LDK closed Thuesday's regular trading session at $6.43, up $0.21, on a volume of 2.5 million shares.
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