FalconStor Software to Settle Class Action Suit
(Benzinga Lightning Feed Via Acquire Media NewsEdge) 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
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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