Welcome to the ShengdaTech Securities Litigation Website

This website has been established to provide general information regarding the proposed settlement of the consolidated action entitled In re ShengdaTech, Inc. Securities Litigation, Master No. 1:11-cv-01918-LGS (the "Action") pending in the United States District Court for the Southern District of New York before the Honorable Lorna G. Schofield. The capitalized terms used on this website and not defined herein shall have the same meanings ascribed to them in the Amended Stipulation and Agreement of Settlement dated June 10, 2015. Your rights may be affected by this settlement if you purchased ShengdaTech, Inc. ("ShengdaTech" or the "Company") common stock between May 6, 2008 and March 15, 2011, inclusive.

As described in the Amended Notice of Pendency and Proposed Settlement of Class Action (the "Notice"), beginning March 18, 2011, four putative class action complaints were filed in the Southern District of New York and assigned to the Honorable Thomas P. Griesa. On December 6, 2011, Judge Greisa consolidated the four actions under the caption: In re ShengdaTech, Inc. Securities Litigation.

The Lead Plaintiffs allege in their Third Consolidated Amended Class Action Complaint ("TAC") that KPMG, a Hong Kong partnership ("KPMG HK" or the "Settling Defendant") (i) acted recklessly in conducting its audit of the Company’s 2008 and 2009 financial statements; (ii) violated its obligations under Generally Accepted Accounting Standards; (iii) failed to investigate certain red flags that should have notified it of ShengdaTech’s true business operations; and (iv) as a result, ShengdaTech’s common stock traded at artificially inflated prices. The TAC asserts claims against the Settling Defendant under Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.

The Settling Defendant has denied and continues to deny each and all of the claims and contentions alleged in the Action. The issues on which the parties disagree include: (1) whether the statements made or facts allegedly omitted were false, material, or otherwise actionable under the federal securities laws; (2) the extent to which the various matters that Lead Plaintiffs alleged were materially false or misleading influenced (if at all) the trading price of ShengdaTech common stock; (3) the extent to which the various allegedly adverse material facts that Lead Plaintiffs alleged were omitted influenced (if at all) the trading price of ShengdaTech common stock; (4) the extent to which external factors, such as general market conditions, influenced the trading price of ShengdaTech common stock; (5) the effect of various market forces influencing the trading price of ShengdaTech common stock; (6) the amount by which the price of ShengdaTech common stock was allegedly artificially inflated (if at all); and (7) the appropriate economic model for determining the amount by which the price of ShengdaTech common stock was allegedly artificially inflated (if at all). Lead Plaintiffs and the Settling Defendant do not agree on the average amount of damages per share that would be recoverable if Lead Plaintiffs were to have prevailed on each claim asserted. The Settling Defendant denies that it has violated federal securities or other laws.

On September 10, 2014, the Settling Parties participated in a full-day mediation session with David Geronemus, Esq., a respected mediator, who has extensive experience mediating complex class action litigations such as this Action. After a full day of mediation, the Settling Parties executed a Settlement Term Sheet. After further negotiations, on March 27, 2015, the parties executed a Stipulation and Agreement of Settlement which was further amended on June 10, 2015.

Per the terms of the proposed settlement, the sum of One Million Nine Hundred Thousand Dollars ($1,900,000.00) has been transferred to the Escrow Agent. The principal amount of $1,900,000.00, plus any accrued interest, constitutes the Settlement Fund. A portion of the settlement proceeds will be used for certain administrative expenses, including costs of printing and mailing the Notice and Proof of Claim and Release form, the cost of publishing a newspaper notice, payment of any taxes assessed against the Settlement Fund, escrow fees, and costs associated with the processing of claims submitted. In addition, a portion of the Settlement Fund may be awarded by the Court to Lead Counsel as attorneys’ fees and for expenses in litigating the case. The balance of the Settlement Fund will be distributed to Class Members who submit valid and timely Proof of Claim and Release forms according to the Plan of Distribution described in the Notice. 

In addition to the $1.9 million settlement proceeds from the settlement set forth in the Notice, Lead Plaintiffs also obtained an additional $250,000 in ShengdaTech’s bankruptcy proceeding. A brief summary of those proceedings is described in the Amended Notice of Partial Class Action Settlement (the "Bankruptcy Notice").

The Court appointed the law firm of Robbins Geller Rudman & Dowd LLP to represent you and other Class Members. These lawyers are called Lead Counsel. These lawyers will apply to the Court for payment from the Settlement Fund; you will not otherwise be charged for their work.  If you want to be represented by your own lawyer, you may hire one at your own expense.

Although the information in this website is intended to assist you, it does not replace the information contained in the Amended Notice of Pendency and Proposed Settlement of Class Action and Amended Stipulation and Agreement of Settlement, both of which can be found and downloaded by clicking on the Case Documents tab above. We recommend that you read the Notice, Bankruptcy Notice and other relevant case documents carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT

DEADLINES