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Sino-Forest ex-auditor to pay $117-million settlement

2013-03-20 19:04 ET - News Release

Mr. A. Dimitri Lascaris of Siskinds reports

SISKINDS LLP AND KOSKIE MINSKY LLP ANNOUNCE COURT APPROVAL OF $117 MILLION SETTLEMENT WITH ERNST & YOUNG LLP IN SINO-FOREST CLASS ACTION

The Ontario Superior Court of Justice has approved a $117-million settlement with Ernst & Young LLP in the Sino-Forest Corp. class action. Ernst & Young was Sino-Forest's auditor from Aug. 16, 2007, until its resignation on April 4, 2012. The agreement provides for Ernst & Young to pay $117-million in settlement of all claims arising from its dealings with Sino-Forest.

The settlement is the largest settlement by an auditor in Canadian history, by a large margin, and is one of the largest ever auditor settlements worldwide.

In approving the settlement, the Ontario Superior Court of Justice stated in its decision released today, "The Ernst & Young settlement is fair and reasonable," and it "provides substantial benefits to relevant stakeholders."

The manner of allocation of the settlement proceeds to class members will be determined by the court at a later date.

The class action alleges that Sino-Forest, certain of its directors and officers, auditors, and underwriters misled investors concerning the business and accounting at the collapsed timber trader. The plaintiffs include the trustees of the Labourers' Pension Fund of Central and Eastern Canada and the trustees of the International Union of Operating Engineers Local 793 pension plan for operating engineers in Ontario.

The Siskinds securities class actions team has offices in London, Toronto, Montreal and Quebec City. The team, composed of 15 lawyers admitted to practice in Ontario, Quebec, New York, and the states of Queensland and Victoria in Australia, acts exclusively for investors. Siskinds's securities class actions team is complemented by lawyers in Siskinds's affiliate, Siskinds, Desmeules, based in Quebec City.

Koskie Minsky LLP, based in Toronto, is one of Canada's leading firms in the areas of class actions, trade union labour law, employment law, civil litigation, and pension and benefits. Its class actions team, led by Kirk Baert, has been a leader in class actions since 1992 and has prosecuted many of the leading cases in the area.

The litigation continues against Allen T.Y. Chan, W. Judson Martin, Kai Kit Poon, David J. Horsley, William E. Ardell, James P. Bowland, James M.E. Hyde, Edmund Mak, Simon Murray, Peter Wang, Garry J. West, BDO Ltd., Credit Suisse Securities (Canada) Inc., TD Securities Inc., Dundee Securities Corp., RBC Dominion Securities Inc., Scotia Capital Inc., CIBC World Markets Inc., Merrill Lynch Canada Inc., Canaccord Financial Ltd., Maison Placements Canada Inc., Credit Suisse Securities (USA) LLC and Merrill Lynch, Pierce, Fenner & Smith Inc.

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