GT Solar International, Inc. (NASDAQ: SOLR), a global provider of polysilicon production technology, and sapphire and silicon crystalline growth systems and materials for the solar, LED and other specialty markets, announced that it has reached an agreement in principle to settle two putative securities class-action lawsuits related to the Company’s initial public offering on July 24, 2008.
“We believe that this settlement will provide GT Solar with certainty on the federal and state securities lawsuits, will eliminate the uncertainties and further expense associated with those litigations, and will eliminate an unnecessary drain on management time.”
The terms of the proposed settlement, which includes no admission of liability or wrongdoing by the Company or by any other defendant, provide for a full and complete release of all claims that were or could have been brought against all defendants in both the federal and state securities actions. The Company will pay $10.5 million into a settlement fund. Of this amount, the Company will contribute $1 million and the Company’s liability insurers will contribute the remaining $9.5 million. The Company’s contribution represents its contractual indemnification obligation to its underwriters. Both the terms of the proposed settlement and the plan of distribution for the settlement fund are subject to further documentation and Court approval.
“This settlement, once approved by the federal and state courts, will resolve these matters in a way that is in the best interests of GT Solar’s shareholders,” said Tom Gutierrez, GT Solar’s president and CEO. “We believe that this settlement will provide GT Solar with certainty on the federal and state securities lawsuits, will eliminate the uncertainties and further expense associated with those litigations, and will eliminate an unnecessary drain on management time.”
The actions to be resolved by this settlement include a consolidated federal securities case pending in the United States District Court for the District of New Hampshire, and a state securities case pending in the Superior Court of Hillsborough County, New Hampshire. In addition to GT Solar, both the federal and the state securities lawsuits also name as defendants certain of the Company’s current and former directors and officers, together with the underwriters of the IPO and certain private equity funds that had invested in the Company prior to the IPO.
A shareholder derivative action pending in New Hampshire state court is not part of the proposed settlement of the securities cases. The derivative action is premised on the same purported misconduct alleged in the federal and state securities cases. The Company and other defendants intend to continue to defend that action vigorously.