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On August 16, 2004, Chimicles & Tikellis LLP filed a complaint alleging violations of the federal securities laws and breaches of fiduciary duty by CNL Hotels & Resorts Inc. (f/k/a CNL Hospitality Properties, Inc.) ("CNL"), CNL Hospitality Corp., and certain of CNL's affiliates, officers and directors. Defendants are involved in the ownership and operation of leisure properties.
SETTLEMENT INFORMATION
Click here for information about Cash Settlement Fund
SETTLEMENT APPROVED
The Court held the Settlement Fairness Hearing on July 26, 2006. On August 1, 2006, the Court approved the Settlement, the Plan of Allocation and an Award of Attorneys Fees and Expenses. The Court entered the Final Judgment, included here for your review. The Court also stated that Plaintiffs' Counsel pursued this complex case diligently, competently and professionally, and noted that a successful result was achieved, especially in regard to the Proxy Class.
On April 3, 2006, the parties executed a Stipulation of Settlement (the Stipulation), which is subject to Court approval. The settlement has been preliminarily approved and the Court will hold a hearing on July 26, 2006 to determine whether the proposed Settlement should be finally approved by the Court as fair, reasonable, and adequate, and to consider the fee and expense application of plaintiffs counsel.
The Following Settlement Documents are Available for You to Review (click on links):
Final Judgment
Summary Notice
Class Notice:
Notice of Pendency and Proposed Settlement of Class Action
Example Investment Data Form (IDF)
Proof of Claim (POC)
Plan of Allocation
Stipulation of Settlement
Order Granting Preliminary Approval of Class Action Settlement
Motion for Approval of Settlement
Memorandum of Law in Support of Settlement
Declaration in Support of Settlement
The Settlement will resolve federal securities law and state law claims that were filed against CHR and other individual and entity defendants (Settling Defendants) in August, 2004. The Action was filed on behalf of: (a) CHR shareholders entitled to vote on the proposals presented in CHRs proxy statement dated June 21, 2004 (Proxy Class); and (b) CHR shareholders who acquired CHR shares pursuant to or by means of CHRs public offerings, registration statements and/or prospectuses between August 16, 2001 and August 16, 2004 (Purchaser Class).
The Proxy Class claims are settled by (a) CHRs entering into an Amended Merger Agreement, subject to shareholder approval, which significantly reduces the amount that CHR will pay to acquire its Advisor, CNL Hospitality Corp., compared to the Original Merger Agreement approved by CHR stockholders pursuant to the June 2004 Proxy; (b) CHRs entering into certain Advisor Fee Reduction Agreements, which significantly reduces certain historic, current, and future advisory fees that CHR pays its Advisor before the Merger; and (c) the adoption of certain corporate governance provisions by the CHR Board of Directors. Those Settling Defendants who were directors of CHR during the negotiation and execution of the Amended Merger Agreement and the Advisor Fee Reduction Agreements (the New Agreements) have acknowledged that this Action was among the material factors taken into account in connection with the terms of the New Agreements. Plaintiffs believe that the net amount that CHR will pay in merger consideration and for advisory fees as a result of the New Agreements will be approximately $200,000,000 less than CHR would have paid under the terms of the Original Merger Agreement and the prior advisory fee structure had the Original Merger Agreement become effective on a timely basis.
The Purchaser Class claims are settled by Settling Defendants payment of $35,000,000, payable in three annual installments (January 2007 to January 2009). These monies, after payment of fees and expenses, will be distributed pursuant to a Plan of Allocation to all eligible members of the Purchaser Class.
When will I receive my payment as a member of the Purchaser Class?
See Page 9, Question 31 of Class Notice.
If you are a member only of the Proxy Class, you are not entitled to a payment from the Cash Settlement Fund.
The Settlement provides that the Cash Settlement Fund shall be funded by CHR in three annual installments beginning January 2007 (or the Effective Date of this Settlement, whichever is later) and ending in January 2009. Due to the costs associated with making multiple distributions to the Purchaser Class, Co-Lead Counsel may determine to make either one or more distributions of the Net Settlement Fund. Therefore, if Co-Lead Counsel determines that it is appropriate to make multiple payments to the Purchaser Class you should not expect to receive a payment before February 2008. If Co-Lead Counsel determines that it is more cost effective and appropriate to make a single payment to members of the Purchaser Class, you should not expect a payment before February 2009.
If You Have Questions about the Terms of the Settlement Please Contact:
Nicholas E. Chimicles
Kimberly M. Donaldson
CHIMICLES & TIKELLIS LLP
361 West Lancaster Avenue
Haverford, PA 19041
Telephone: 610-642-8500
Toll Free: 866-399-2487
Email: CNLHotelsSettlement@Chimicles.com
If You Have Questions about the Notice, Distributions, Investment Data Form or Proof of Claim, Please Contact:
The Claims Administrator by:
- Calling (877) 318-6652, toll-free
- Writing to:
In re CNL Hotels & Resorts, Inc. Securities Litigation
c/o Complete Claim Solutions, Inc.
P.O Box 24706
West Palm Beach, Florida 33416
- Emailing: CNLINFO@CompleteClaimSolutions.com
If You Want to Provide Us With Your Email Address for Future Communications, Please Send an Email, with Your Request to
CNLHotelsSettlement@Chimicles.com
PLEASE READ THE CLASS NOTICE IN ITS ENTIRETY FOR A COMPLETE DESCRIPTION OF THE TERMS OF THE SETTLEMENT AND FOR INFORMATION AND INSTRUCTIONS THAT MAY AFFECT YOUR LEGAL RIGHTS
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