Assisted Living Concepts Inc
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Assisted Living Concepts Inc Securities Settlement
The lawsuit was settled for addition disclosures in the proxy statement mailed to shareholders. The following is a summary of the proceedings in this lawsuit: ‘ALC operates a chain of over 200 assisted living facilities for senior adults. As an assisted living center, ALC cares for the elderly and those that cannot care for themselves by providing its residents with housing and assistance with daily living, such as eating, bathing, dressing, and medication management. On February 26, 2013, ALC and TPG announced that ALC and affiliates of TPG had entered into an Agreement and Plan of Merger, dated as of February 25, 2013 (the Merger Agreement), pursuant to which an affiliate of TPG, Aid Merger Sub, LLC (Merger Sub), will merge with and into ALC (the Merger), with ALC surviving the Merger as a wholly-owned subsidiary of an affiliate of TPG, Aid Holdings, LLC (Parent) (in its entirety, the Proposed Acquisition). On February 28, 2013, Plaintiff Guy Somers, on behalf of himself and a purported class of Company stockholders, filed an amended complaint (the ‘Amended Complaint’) in a pre-existing shareholder derivative action in the Eighth Judicial District of the State of Nevada in and for Clark County (the Eighth Judicial District), captioned Somers v. Bebo et al., Case No. A-12-674054-C (the Somers Action), adding purported class action claims for breach of fiduciary duties in connection with the Merger against certain of the Company directors and aiding and abetting breaches of fiduciary duty claims against TPG, Parent and Merger Sub (together with ALC, the Defendants). The Amended Complaint alleged that Defendants agreed to sell the Company via an unfair process and at an unfair price in an attempt to extinguish the claims in the pending shareholder derivative action in an all-cash transaction that did not maximize the consideration for ALC shareholders and deprived them of the benefit of ALC’s improving operations and bright future. On April 11, 2013, Plaintiff Guy Somers filed a Second Amended Complaint in the Somers action, adding allegations that the Definitive Proxy was materially misleading and incomplete, in violation of the Individual Defendants fiduciary duties. Specifically, the Second Amended Complaint alleged that Defendants provided materially misleading and incomplete information concerning, among other things: (i) the process leading to the sale of the Company; and (ii) the financial analyses performed by Citigroup Global Markets, Inc. (‘Citigroup’), the Special Committee’s financial advisor. Subsequently, counsel for Plaintiffs and Defendants in the Actions engaged in arm’s-length negotiations concerning a possible settlement of the Actions based on Plaintiffs’ request for additional disclosures to ALC shareholders in connection with the Proposed Acquisition. The Settlement reflects the results of the Parties negotiations and the terms of the MOU. An agreement-in-principle was only reached after arm’s-length negotiations between the Parties who were all represented by counsel with extensive experience and expertise in shareholder class action litigation. During the negotiations, all Parties had a clear view of the strengths and weaknesses of their respective claims and defenses. Counsel for the Parties have concluded that the terms contained in this Stipulation are fair and adequate to both the Company and the Settlement Class, and that it is reasonable to pursue a settlement of the Actions based upon the procedures, the substantial benefits and the protections outlined herein.’