NEW YORK, June 14, 2016 /PRNewswire/ -- Notice is hereby provided to all persons who held shares of the common stock of MCG Capital Corporation ("MCGC") on or after April 28, 2015.
The purpose of this notice is to inform you about developments with respect to the litigation in the Court of Chancery of the State of Delaware (the "Court") captioned In re MCG Capital Corporation Stockholders Litigation, Consol. C.A. No. 10992- VCS (the "Consolidated Action"), previously described in the proxy statements referenced herein, including the dismissal of the Consolidated Action and an agreement to pay a total of $100,000 in full satisfaction of plaintiffs' counsels' attorneys' fees and expenses in the Consolidated Action ("Plaintiffs").
Plaintiffs commenced the Consolidated Action on behalf of themselves and a putative class of MCGC stockholders to challenge the transactions contemplated by the merger agreement between MCGC and PennantPark Floating Rate Capital, Ltd. ("PennantPark"), pursuant to which MCGC stockholders received $4.521 in PennantPark shares and $0.226 in cash for each share of MCGC stock they owned upon consummation of the merger (the "Merger" or the "Transaction").
On May 18, 2015, PennantPark filed a Registration Statement with the United States Securities and Exchange Commission (the "SEC") on Form N-14 8C including a Joint Proxy Statement of MCGC and PennantPark and a Prospectus of PennantPark (the "Preliminary Proxy Statement") that, among other things, described the background of the Transaction, the fairness opinion issued in connection with the Transaction, and certain financial information produced by MCGC's management.
Plaintiffs' operative complaint, filed on June 10, 2015, identified items that Plaintiffs alleged should have been disclosed to MCGC's stockholders, the purported absence of which they alleged deprived MCGC's stockholders of the ability to make a fully informed decision whether to vote their shares in support of the Transaction.
Beginning in late June and continuing throughout July 2015, defendants produced and Plaintiffs' reviewed over 24,000 pages of documents related to the Merger on an expedited basis. During this time, the parties also engaged in negotiations regarding a potential settlement. On July 30, 2015, the parties executed a Memorandum of Understanding that provided for, among other things, a proposed settlement of the Consolidated Action.
Pursuant to that Memorandum, on July 31, 2015, MCGC filed a Current Report on Form 8-K, which supplemented the Preliminary Proxy Statement to include certain additional information. The Current Report is accessible on the SEC's website at: http://www.sec.gov/Archives/edgar/data/1141299/000114129915000088/a8- kstockholderlitigation.htm
On August 14, 2015, MCGC stockholders voted to approve the Merger. The Merger was completed on August 18, 2015.
Thereafter, Plaintiffs filed with the Court a Stipulation and Proposed Order Concerning Plaintiffs' Voluntary Dismissal of the Action and Plaintiffs' Counsel's Anticipated Application for an Award of Attorneys' Fees and Expenses, which the Court granted.
As a result of negotiations that occurred after the dismissal of the Consolidated Action, MCGC has agreed to pay Plaintiffs' counsel a fee of $100,000 in full satisfaction of Plaintiffs' counsel's claim for attorneys' fees and expenses in the Consolidated Action. The parties to the litigation have agreed that payment will be made within ten (10) days of final dismissal and closure of the Consolidated Action. The Court has not been asked to review, and will pass no judgment on, the payment or amount of the $100,000 agreed-upon fee or its reasonableness.
Plaintiffs' counsel are Kahn Swick & Foti, LLC and Levi & Korsinsky, LLP.
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SOURCE Kahn Swick & Foti, LLC