Sino-Forest: class plaintiffs reach C$117 million deal with auditor

By Caroline Salls

Pittsburgh, Dec. 28 - The plaintiffs in a class action lawsuit filed against Sino-Forest Corp. have entered into a settlement with auditor Ernst & Young, under which the auditor would pay C$117 million to a settlement trust, according to a news release.

In exchange for the payment, the lawsuit will be dismissed against Ernst & Young, and there will be an order forever barring claims against it in relation to Sino-Forest, including any claims that could be advanced through an opt-out process under class proceedings or similar legislation.

The company said that class counsel intends to seek court approval of a plan of allocation that distributes the settlement funds.

The settlement is subject to court approval. A hearing is scheduled for Feb. 4 before the Ontario Superior Court of Justice.

If the settlement is approved at that hearing, a further hearing will be scheduled for approval of the plan for allocating the settlement payment.

In addition, if the settlement motion is granted, there may be additional hearings at later dates in the Québec Superior Court and the U.S. Bankruptcy Court for the Southern District of New York seeking recognition and implementation of the order.

According to the release, class actions were filed in July 2011 and July 2011 against Sino-Forest, its senior officers and directors, its underwriters, a consulting company and its auditors, including Ernst & Young.

The actions alleged that the public filings of Sino-Forest contained false and misleading statements about its assets, business and transactions.

The class actions have been vigorously contested, the release said.

Toronto-based Sino-Forest is a commercial forest plantation operator in China.

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