A Chinese private educational services company recently announced that it reached a securities class action settlement with its shareholders.
Law firms Grant and Eisenhofer, P.A., and Faruqi and Faruqi, LLP, noted jointly that New Oriental Education and Technology Group, Inc., reached the pending agreement with its shareholders. The lawsuit included all shareholders who acquired interests in the education company during the class period between Aug. 19, 2011 and July 17, 2012.
In order for the settlement to be finalized, it will have to be approved in the U.S. District Court for the Southern District of New York. This will occur on Sept. 19, 2014, and Judge John Koeltl will oversee the process. The hearing will decide a number of issues, including whether the $4.5 million for the American Depositary Shares class is acceptable, as well as the $250,000 for the options class. The court will also seek to determine the best way to pay out these fees, as well as how attorneys and lead plaintiffs will be awarded.
The court has the ability to dismiss the charges against the company, so that once the settlement goes through, the leaders at New Oriental Education and Technology Group will be no longer liable for the allegations.
Shareholders who acquired interests during the aforementioned class period may need to take action if they are interested in being involved with the settlement. The proposed settlement of class action and proof of claim and release forms can be acquired through the claims administrator.
The proof of claim and release form needs to be sent by Nov. 5, 2014. Those who do not do this will not be able to collect.
Lawsuit filed in 2012
Law office Holzer Holzer and Fistel noted that it filed a class action lawsuit against New Oriental Education and Technology Group back in 2012 due to allegations of false statements to shareholders.
This lawsuit was filed in the same court, but had a class period between July 21, 2009 and July 17, 2012. The allegations in the case included the company failing to inform its shareholders that a number of its facilities were not operated by the company, but instead used by franchisees. Additional issues included the company overstating financial results and consolidating earnings in a manner that was not considered to be correct.