In June of 2008, Siskinds LLP filed a proposed class action against Orsu Metals Corporation, formerly known as European Minerals Corporation ("EPM"), and certain of EPM's senior officers and/or directors. The action arises out of EPM's March 31, 2008 press release disclosing, among other things, that EPM would be delaying the release of its 2007 annual consolidated financial statements, in part as a result of EPM's review of its accounting for derivatives to ensure compliance with GAAP. EPM acknowledged that this review would result in the restatement of EPM's Financial Statements Q1, Financial Statements Q2, and Financial Statements Q3 of 2007. On April 11, 2008, EPM restated its financial statements for the first three quarters of 2007 to properly account for a forward sales contract of gold to be produced from its Varvarinskoye project. The restatements resulted in significant changes to EPM's net earnings and earnings per share for those periods. The trading price of EPM's securities declined during the ten days following the date on which the misrepresentations were disclosed.
The statement of claim alleges that EPM's financial statements, released during the period from and including May 16, 2007 to and including April 11, 2008 (the "class period"), were materially false and/or misleading as a result of incorrect accounting for the forward sales contract. The alleged result of the incorrect accounting was that EPM's financial statements significantly understated its liabilities and overstated its earnings during the class period. The class action was brought on behalf of all persons who acquired EPM securities during the class period.
On November 26, 2009, the parties to the class action executed an agreement settling the class action for $2.2 million. The settlement is a compromise of disputed claims and is not an admission of liability, wrongdoing or fault on the part of any of the Defendants, all of whom have denied and continue to deny the allegations against them. You may view a copy of the Settlement Agreement here: [English][Français]
By Order issued by the Ontario Superior Court of Justice, dated February 18, 2010, the Court has approved the Settlement Agreement reached between the parties. The court has also approved a notice which provides information on how Class Members may file a claim under the Settlement Agreement. You may see a copy of the Notice here: [English] [Français]. You may also access the Claim Form here: [English] [Français]. The claims deadline has now passed. Cheques were mailed to all eligible claimants in December 2011.