NEW YORK, Nov. 18, 2016 /PRNewswire/ -- On April 29, 2016, a shareholder of Multi-Fineline Electronix, Inc. ("MFLEX") filed a class action in the United States District Court for the Central District of California (the "Court") against MFLEX's board of directors (the "Board") alleging violations of Sections 14(a) and 20(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and against Suzhou Dongshan Precision Manufacturing Co., Ltd. and Dragon Electronix Merger Sub Inc. (collectively, "DSBJ") for aiding and abetting the Board's violations. The class action alleges that Exchange Act violations arose out of the Board's failure to disclose certain information relating to DSBJ's acquisition of MFLEX for $23.95 per share, announced on February 4, 2016 (the "Merger"). The class action, among other things, sought to enjoin the Merger and sought additional disclosure of facts relating to the Merger in advance of the shareholder vote on the Merger.
On June 8, 2016, as part of a tentative settlement of the class action, MFLEX provided supplemental disclosures addressing the plaintiff's claims to MFLEX shareholders in a Form 8-K filed with the U.S. Securities Exchange Commission. MFLEX and the Board denied and expressly disclaimed any disclosure violations or liability in connection with the tentative settlement. These supplemental disclosures pertained to MFLEX's financial projections, the voting agreement and indemnification agreement entered into with UEL, MFLEX's largest shareholder, and the MFLEX Board's financial advisor's fairness opinion.
On November 17, 2016, the Court entered an order dismissing the shareholder action with prejudice as to the named plaintiff and an additional shareholder who joined in the plaintiff's claim, and without prejudice as to any absent members of the putative class. In connection with the dismissal, defendants agreed to pay plaintiff's attorneys' fees and expenses in the amount of $150,000, in order to eliminate any risk associated with the plaintiff's anticipated fee petition. This fee will be paid by MFLEX and has not been in any way approved or ruled upon by the Court.
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SOURCE Levi & Korsinsky, LLP