Berry Petroleum Company

Berry Petroleum Company

Berry Petroleum Company Securities Settlement

The lawsuit was settled for additional disclosures in the proxy statement. The following is a summary of the proceedings in this lawsuit: ‘On February 20, 2013, Berry, a Delaware corporation, LlNN Ener~:,’Y, LLC (‘LlNN’), LinnCo, LLC (‘LitmCo’), Linn Acquisition Company, LLC (‘Linn Co Merger Sub’) (a wholly owned subsidiary of LinnCo ), Bacchus HoldCo, Inc. (‘HoldCo’) (a direct wholly owned subsidiary of Berry), and Bacchus Merger Sub, Inc. (‘Bacchus Merger Sub’) (a direct wholly owned subsidiary of HoldCo) entered into a definitive merger agreement (‘Merger Agreement’) for LlNN and LinnCo to acquire Berry in an all-stock merger (the ‘Proposed Transaction’) with a total equity value of approximately $4.3 billion, it1cluding the assumption of debt. Under the terms of the Proposed Transaction, Berry shareholders would receive 1.25 LitmCo common shares for each share of Berry common stock that they own immediately prior to the merger. On March 22, 2013, LlNN and LinnCo filed a Registration Statement on Form S-4 with the Securities and Exchange Commission (‘SEC’), concerning the Proposed Transaction (the ‘S-4’), which has been amended subsequently. On Aprill2, 2013, Plaintiff DavidS. Hall, a Berry common stockholder, filed a putative class action complaint in the Delaware Action, challenging the Proposed Transaction on behalf of the public stockholders of Berry against Defendants, which action was assigned to Vice Chancellor Glasscock. The complaint in the Delaware Action alleges that, among other things, the members of Berry’s board of directors (the ‘Board’) breached their fiduciary duties owed to the public stockholders of Berry in connection with the Proposed Transaction and that HoldCo, Bacchus Merger Sub, LinnCo, LinnCo Merger Sub, and LlNN aided and abetted those alleged breaches. On April 22, 2013, Plaintiff served his First Request for Production of Documents on Defendants. A similar action challenging the Proposed Transaction, captioned Nancy P. Assad Trust v. Beny Petroleum Co. eta!., No. 2013-CV-031365 (the ‘Colorado Action’), was filed in the District Court of Colorado for the City m1d Cowlty of Denver (the ‘Colorado Court’). In addition, a similar action challenging the Proposed Transaction that was filed before the Colorado Action and that was pendit1g in the United States District Court for the District of Colorado (Denver), captioned Nancy P. Assad Trust. George Assad, Trustee v. Beny Petroleum Co. et al., No. 13-cv-00544-PAB, was dismissed without prejudice for lack of subject matter jurisdiction. On May 9, 2013, Defendants filed in this Court and in the Colorado Court a Motion to Proceed in One Jurisdiction, Stay Litigation in the Other Jurisdiction, m1d Orgm1ize Counsel for the Putative Class. On May 20, 2013, the Court informed the parties to the Delaware Action that it had conferred with the Colorado Court, and that the Delaware Action would proceed on an expedited basis and that the Colorado Court would stay the Colorado Action. On May 21, 2013, the Colorado Court stayed and admmistratively closed the Colorado Action ill favor of the Delaware Action. On May 24, 2013, Plaintiff moved for expedited proceedmgs, which motion the Court granted on May 28, 2013. On May 30, 2013, the Court in the Delaware Action entered a Case Scheduling Order (the ‘Case Scheduling Order’) providing for expedited discovery, a briefing schedule for Plaintiffs motion for a preliminary injunction, and a hearing date for that motion of June 24, 2013 at 10:00 am. The Case Scheduling Order was subsequently amended pursuant to the parties’ requests to extend the briefmg schedule for Plaintiff’s motion for a preliminary injunction and to reschedule the hearing date for that motion. The parties engaged in expedited fact discovery, including the (i) taking of depositions by counsel for Plaintiff of (a) Berry’s Chief Executive Officer, who was also a director of Berry, (b) the Chairman of Berry’s Board, and (c) a Co-Head of Americas M&A at Credit Suisse, Berry’s fmancial advisor, and (ii) production of over 16,000 pages of non-public documents concerning, among other things, the process leading up to the Proposed Transaction and the valuation of Berry, including emails and other electronic documents, Berry Board minutes, Berry Board presentations, and Credit Suisse’s financial analyses. On June 6, 2013, Plaintiff sent a demand letter to Defendants’ Counsel seeking: (i) an increase to the exchange ratio for the Proposed Transaction and (ii) supplemental disclosures to the S-4; On November 3, 2013 and November 13, 2013, the Merger Agreement was amended to provide, among other things, that Berry stockholders would receive 1.68 LinnCo common shares (increased from 1.25 LinnCo common shares) for each share of Berry common stock that they owned immediately prior to the merger in connection with the Proposed Transaction. On November 15, 2013, Berry filed a Defmitive Proxy Statement (‘Defmitive Proxy’) on Schedule 14A with the SEC concerning the Proposed Transaction, which among other things, provided notice of a December 16, 2013 special meeting of Berry’s stockholders of record as of November 14, 2013 to vote on a proposal to adopt the Merger Agreement (the ‘Stockholder Vote’). Following negotiations, the parties to the Delaware Action entered into a Memorandum of Understanding (the ‘MOU’) on December 6, 2013, memorializing their agreement-in-principle for the settlement of the Delaware Action.’

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