FalconStor Software to Settle Class Action Suit
FalconStor Software, Inc. (Nasdaq: FALC), a market leader in disk-based data protection, today announced that it had reached a settlement in principle of the class action lawsuit pending against the Company.
Pursuant to a Memorandum of Understanding signed by counsel for the class plaintiffs and by counsel for all defendants, FalconStor will pay $5 million to settle the action. This amount includes damages, plaintiffs' attorneys' fees, and costs of administration of the settlement. The Company expects to pay this settlement with a combination of cash on hand and insurance proceeds.
"The agreement to settle the class action lawsuit represents another significant step forward for our Company and our shareholders. As a result, we have emerged as a stronger company, better equipped than ever to continue the technological innovation for which we are known and to increase shareholder value," said Jim McNiel, president and chief executive officer of FalconStor. "The improper acts of a few individuals that resulted in the government investigations and the class action lawsuit were contrary to our core values and ethical policies. Over the last two years, we have taken aggressive measures to improve and to strengthen our business processes and compliance programs."
In accordance with the Memorandum of Understanding, a stipulation of settlement and a joint motion for preliminary approval of the settlement will be submitted to the court for its approval no later than March 11, 2013. Final settlement of the class action lawsuit is subject to certain coonditions and to approval by the court.
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