Telestone Technologies Securities Litigation

Case No. 2:15-cv-00703-JMV-MF
United States District Court District Of New Jersey

Important Dates

February 13, 2018 - Deadline to Receive Requests for Exclusion

February 13, 2018 - Deadline to Receive Objections

February 21, 2018 - Deadline to File Claim Form (Postmarked by this Date)

March 6, 2018 at 10:30 a.m. - Fairness Hearing

NOTICE OF PENDENCY OF CLASS ACTION: Please be advised that your rights may be affected by the above-captioned securities class action (the “Action”) pending in the United States District Court for the District of New Jersey (the “Court”), if, during the period between March 31, 2010 and April 16, 2013, inclusive (the “Class Period”), you purchased the common stock of Telestone Technologies Corporation (“Telestone” or the “Company”) and were damaged thereby.1

NOTICE OF SETTLEMENT: Please also be advised that the Court-appointed Lead Plaintiff, Bin Qu (“Lead Plaintiff”), on behalf of himself and the Settlement Class (as defined in FAQ 3), have reached a proposed partial settlement of the Action for $1,250,000 with Defendant Mazars CPA Limited (“Mazars CPA”) that, if approved, will resolve all claims in the Action against Mazars CPA (the “Settlement”).

PLEASE READ THE NOTICE CAREFULLY. The Notice explains important rights you may have, including the possible receipt of cash from the Settlement. If you are a member of the Settlement Class, your legal rights will be affected whether or not you act.

If you have any questions about the Notice, the proposed Settlement, or your eligibility to participate in the Settlement, please DO NOT contact Mazars CPA, any other Defendants in the Action, or their counsel. All questions should be directed to Lead Counsel or the Claims Administrator (see FAQ 13).

Description of the Action and the Settlement Class:

The Notice relates to a proposed Settlement of claims in a pending securities class action brought by investors alleging, among other things, that defendants Mazars CPA Limited (“Mazars CPA” or “Settling Defendant”), Daqing Han and Xiaoli Yu (collectively, the “Defendants”)2 violated the federal securities laws by making false and misleading statements regarding Telestone. A more detailed description of the Action is set forth in FAQ 2. The proposed Settlement, if approved by the Court, will settle claims of the Settlement Class, as defined in FAQ 3, as against Mazars CPA only.3

Statement of the Settlement Class’s Recovery:

Subject to Court approval, Lead Plaintiff, on behalf of himself and the Settlement Class, has agreed to settle the Action in exchange for a settlement payment of $1,250,000 in cash (the “Settlement Amount”) to be deposited into an escrow account. The Net Settlement Fund (i.e., the Settlement Amount plus any and all interest earned thereon (the “Settlement Fund”) less (a) any Taxes, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys’ fees awarded by the Court) will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class. The proposed plan of allocation (the “Plan of Allocation”) is set forth in FAQ 8.

Estimate of Average Amount of Recovery Per Share:

Based on Lead Plaintiff’s damages expert’s estimates of the number of shares of Telestone common stock purchased during the Class period that may have been affected by the conduct at issue in the Action and assuming that all Settlement Class Members elect to participate in the Settlement, the estimated average recovery (before the deduction of any Court-approved fees, expenses and costs as described herein) per eligible security is $0.108. Settlement Class Members should note, however, that the foregoing average recovery per share is only an estimate. Some Settlement Class Members may recover more or less than this estimated amount depending on, among other factors, the number of shares of Telestone common stock they purchased, when and at what prices they purchased/acquired or sold their Telestone common stock, and the total number of valid Claim Forms submitted. Distributions to Settlement Class Members will be made based on the Plan of Allocation set forth herein (see FAQ 8) or such other plan of allocation as may be ordered by the Court.

Average Amount of Damages Per Share:

The Settling Parties do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiff were to prevail in the Action. Among other things, Mazars CPA does not agree with the assertion that they violated the federal securities laws or that any damages were suffered by any members of the Settlement Class as a result of their conduct.

Attorneys’ Fees and Expenses Sought:

Lead Counsel, which have been prosecuting the Action on a wholly contingent basis since its inception in 2015, have not received any payment of attorneys’ fees for their representation of the Settlement Class and have advanced the funds to pay expenses necessarily incurred to prosecute this Action. Court-appointed Lead Counsel, Glancy Prongay & Murray LLP and Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., will apply to the Court for an award of attorneys’ fees in an amount not to exceed 33 1/3% of the Settlement Fund. In addition, Lead Counsel will apply for reimbursement of Litigation Expenses paid or incurred in connection with the institution, prosecution and resolution of the claims against the Defendants, in an amount not to exceed $65,000, which may include an application for reimbursement of the reasonable costs and expenses incurred by Lead Plaintiff directly related to his representation of the Settlement Class. Any fees and expenses awarded by the Court will be paid from the Settlement Fund. Settlement Class Members are not personally liable for any such fees or expenses. Estimates of the average cost per affected share of Telestone common stock, if the Court approves Lead Counsel’s fee and expense application, is $0.042 per eligible security.

Identification of Attorneys’ Representatives:

Lead Plaintiff and the Settlement Class are represented by Casey E. Sadler, Esq. of Glancy Prongay & Murray LLP, 1925 Century Park East, Suite 2100, Los Angeles, California 90067, 1-888-773-9224, www.glancylaw.com or settlements@glancylaw.com; and Donald A. Ecklund, Esq., of Carella, Byrne, Cecchi, Olstein, Brody & Agnello, P.C., 5 Becker Farm Road, Roseland, New Jersey 07068, 1-973-994-1700, decklund@carellabyrne.com.

Reasons for the Settlement:

Lead Plaintiff’s principal reason for entering into the Settlement is the significant immediate cash benefit for the Settlement Class without the risk or the delays inherent in further litigation. Moreover, the cash benefit provided under the Settlement must be considered against the significant risk that a smaller recovery – or indeed no recovery at all – might be achieved after contested motions, a trial of the Action and the likely appeals that would follow a trial. This process could be expected to last several years. Mazars CPA, which denies all allegations of wrongdoing or liability whatsoever, is entering into the Settlement solely to eliminate the uncertainty, burden and expense of further protracted litigation.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:

SUBMIT A CLAIM FORM POSTMARKED NO LATER THAN FEBRUARY 21, 2018.

This is the only way to be eligible to receive a payment from the Settlement Fund. If you are a Settlement Class Member and you remain in the Settlement Class, you will be bound by the Settlement as approved by the Court and you will give up any Released Plaintiff’s Claims (defined in FAQ 6) that you have against Mazars CPA and the other Mazars CPA Releasees (defined in FAQ 6), so it is in your interest to submit a Claim Form.

EXCLUDE YOURSELF FROM THE SETTLEMENT CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION SO THAT IT IS RECEIVED NO LATER THAN FEBRUARY 13, 2018.

If you exclude yourself from the Settlement Class, you will not be eligible to receive any payment from the Settlement Fund. This is the only option that allows you ever to be part of any other lawsuit against Mazars CPA or the other Mazars CPA Releasees concerning the Released Plaintiff’s Claims.

OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION SO THAT IT IS RECEIVED NO LATER THAN FEBRUARY 13, 2018.

If you do not like the proposed Settlement, the proposed Plan of Allocation, or the request for attorneys’ fees and reimbursement of Litigation Expenses, you may write to the Court and explain why you do not like them. You cannot object to the Settlement, the Plan of Allocation or the fee and expense request unless you are a Settlement Class Member and do not exclude yourself from the Settlement Class.

GO TO A HEARING ON MARCH 6, 2018 AT 10:30AM., AND FILE A NOTICE OF INTENTION TO APPEAR SO THAT IT IS RECEIVED NO LATER THAN FEBRUARY 13, 2018.

Filing a written objection and notice of intention to appear by February 13, 2018 allows you to speak in Court, at the discretion of the Court, about the fairness of the proposed Settlement, the Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of Litigation Expenses. If you submit a written objection, you may (but you do not have to) attend the hearing and, at the discretion of the Court, speak to the Court about your objection.

DO NOTHING.

If you are a member of the Settlement Class and you do not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Settlement Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.



Footnotes:

  • 1. All capitalized terms used in the Notice that are not otherwise defined herein shall have the meanings ascribed to them in the Stipulation and Agreement of Settlement dated February 8, 2017 (the “Stipulation”). [Return to Text]

  • 2. Defendants Daqing Han and Xiaoli Yu are collectively referred to herein as the “Individual Defendants.” [Return to Text]

  • 3. The Settlement does not resolve any claims asserted against the Individual Defendants. [Return to Text]

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