Notice of Settlement to Shareholders
Press Release | 11/30/2020
UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA
In re Taronis Technologies, Inc. Shareholder Derivative Litigation Case No. CV-19-04547-PHX-GMS
LEAD CASE
Consolidated with
Case No. CV-19-05233-PHX-GMS
NOTICE OF SHAREHOLDER
DERIVATIVE ACTION, PROPOSED
SETTLEMENT AND SETTLEMENT
HEARING
Judge: G. Murray Snow Courtroom: Room 601
TO: ALL PERSONS WHO OWNED TARONIS TECHNOLOGIES, INC., NOW KNOWN AS BBHC, INC. (“BBHC”), COMMON STOCK AS OF OCTOBER 5, 2020.
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY. IT CONTAINS IMPORTANT INFORMATION ABOUT YOUR LEGAL RIGHTS. THIS NOTICE RELATES TO A PROPOSED SETTLEMENT OF SHAREHOLDER DERIVATIVE ACTIONS AND CLAIMS ASSERTED ON BEHALF OF BBHC (THE “ACTIONS”).
IF THE COURT APPROVES THE SETTLEMENT AND DISMISSAL OF THE ACTIONS, SHAREHOLDERS OF BBHC AND BBHC WILL BE FOREVER BARRED FROM CONTESTING THE APPROVAL OF THE PROPOSED SETTLEMENT AND FROM PURSUING THE RELEASED CLAIMS.
THESE ACTIONS ARE NOT “CLASS ACTIONS.” THUS, THERE IS NO COMMON FUND UPON WHICH YOU CAN MAKE A CLAIM FOR A MONETARY PAYMENT.
Phoenix, AZ, Nov. 30, 2020 (GLOBE NEWSWIRE) -- On October 5, 2020, BBHC, Inc., formerly known as Taronis Technologies, Inc. (“BBHC”), in its capacity as a nominal defendant, entered into a Stipulation of Settlement (the “Stipulation”) in the above-captioned shareholder derivative actions1 filed in the U.S. District Court for the District of Arizona, styled In re Taronis Technologies, Inc. Shareholder Derivative Litigation, Case No. CV-19-04547-PHX-GMS (D. Ariz.) (“Derivative Actions”), against certain current and former directors and officers of BBHC, and against BBHC as a nominal defendant. The Stipulation executed by counsel for the Settling Parties on October 5, 2020 and the
1 A derivative claim is a claim brought by a shareholder on behalf of a company, rather than on behalf of himself or herself or the other shareholders of the company. The recovery sought in a derivative action is for the benefit of the company rather than directly for individual shareholders. settlement contemplated therein (the “Settlement”), including dismissal of all claims with prejudice in the Derivative Actions, is subject to approval by the U.S. District Court for the District of Arizona (the “Court”). The proposed Settlement requires BBHC to adopt certain additional corporate governance reforms, as outlined in Exhibit A to the Stipulation, and provides for a Fee and Expense Award to Plaintiffs’ Counsel in the amount of $350,000, subject to Court approval.
This notice is a summary of the Settlement only and does not describe all of the details of the Stipulation. For full details of the matters discussed in this notice, please see the full Stipulation by visiting BBHC’s website at http://www.taronistech.com, or contact Plaintiffs’ Counsel at the address listed below. All capitalized terms used in this notice, unless otherwise defined herein, are defined as set forth in the Stipulation.
Summary
The Derivative Actions alleged that the Defendants willfully or recklessly made and/or caused the Company to make false or misleading representations to the effect that the Company had entered into a contract with the City of San Diego for the sale of the Company’s metal cutting fuel. As a result of the foregoing, the Plaintiffs alleged that Defendants had breached their fiduciary duties to the Company and to its shareholders. Defendants deny each and every claim and contention alleged by Plaintiffs and also expressly deny all charges of wrongdoing or liability arising out of the allegations in the Actions
Once the Derivative Actions were consolidated on April 13, 2020, the Parties thereafter engaged in preliminary settlement negotiations presided over telephonically by Michelle Yoshida, Esq. of Phillips ADR. Prior to the scheduled August 5, 2020 Zoom mediation date, the Parties were able to reach agreement on the substantive terms of the settlement of the Derivative Actions. The Parties memorialized their agreement as to the substantive terms of the proposed settlement in a Settlement Term Sheet on July 24, 2020. Thereafter, the Parties commenced negotiations as to a proposed Fee and Expense Award to Plaintiffs’ Counsel under the auspices of Mediator Yoshida. These fee and expense negotiations broke down at the Zoom mediation held on August 5, 2020, but continued thereafter telephonically. Eventually, the Mediator made a double-blind proposal to both Parties in an effort to break the impasse. Both Parties agreed to the Mediator’s proposal on August 26, 2020 and settled upon a proposed Fee and Expense Award of $350,000. The Stipulation was thereafter prepared by the Parties and executed by them on October 5, 2020.
On November 20, 2020, the Court entered an order preliminarily approving the Stipulation and the Settlement contemplated therein and providing for notice of the Settlement (the “Preliminary Approval Order”). The Preliminary Approval Order further provides that the Court will hold a hearing (“Final Hearing”), on March 5, 2021 at 9:30 a.m. before the Honorable G. Murray Snow in Courtroom 601 of the United States District Court for the District of Arizona, Sandra Day O’Connor United States Courthouse, 401 West Washington Street, Phoenix, AZ 85003, pursuant to Federal Rule of Civil Procedure 23.1, to among other things: (i) determine whether the proposed Settlement is fair, reasonable and adequate and in the best interests of BBHC and its shareholders; (ii) consider any objections to the Settlement submitted in accordance with the Notice; (iii) determine whether a Final Judgment substantially in the form attached as Exhibit C to the Stipulation should be entered dismissing all claims in the Derivative Actions with prejudice and releasing the Released Claims against the Released Persons; (iv) consider the payment to Plaintiffs’ Counsel of attorneys’ fees and for the reimbursement of expenses as requested in the Fee and Expense Award; (v) consider the payment to Plaintiffs of Service Awards in an amount not to exceed $2,000 each, which will be funded from the Fee and Expense Award; and (vi) consider any other matters that may properly be brought before the Court in connection with the Settlement.
The Court may, in its discretion, change the date and/or time of the Final Hearing without further notice to you. The Court also has reserved the right to hold the Final Hearing telephonically without further notice to you. If you intend to attend the Final Hearing, please consult the Court’s calendar and/or BBHC’s website at http://www.taronistech.com for any change in date, time or format of the Final Hearing.
Any BBHC Shareholder who wishes to object to the fairness, reasonableness, or adequacy of the Settlement as set forth in the attached Stipulation, or to the proposed Fee and Expense Award and Service Awards, may file an objection. An objector must file with the Court a written statement of his, her or its objection(s): (a) clearly indicating that objector’s name, mailing address, daytime telephone number, and e-mail address (if any); (b) stating that the objector is objecting to the proposed Settlement and/or proposed Fee and Expense Award and Service Awards; (c) specifying the reason(s), if any, for each such objection made, including any legal support and/or evidence that such objector wishes to bring to the Court’s attention or introduce in support of such objection; and (d) identifying and supplying documentation showing how many shares of BBHC common stock the objector owned as of October 5, 2020, when the objector purchased or otherwise acquired such shares, and proof that the objector still owns such BBHC shares.
The objector must file such objections and supporting documentation with the Clerk of the Court, U.S. District Court, District of Arizona, Sandra Day O’Connor United States Courthouse, 401 West Washington Street, Phoenix, AZ 85003, not later than twenty-one (21) days prior to the Final Hearing, and, by the same date, copies of all such papers must also be received by each of the following persons:
Counsel for Plaintiff Falcone:
Thomas J. McKenna
GAINEY McKENNA & EGLESTON
501 Fifth Avenue, 19th Floor New York, NY 10017
Counsel for Plaintiff Manley:
Timothy Brown
THE BROWN LAW FIRM, P.C.
240 Townsend Square Oyster Bay, New York 11771
Counsel for Defendants and BBHC:
Lisa Bugni
KING & SPALDING LLP
50 California Street, Suite 3300 San Francisco, California 94111
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