Southern China Livestock Inc.
The parties in this case have reached a settlement, which has been approved by the court. Please visit the website of the Claims Administrator for further details:www.SouthernChinaLivestockSettlement.ca.
Notice of the settlement approved by the Ontario Superior Court of Justice is provided below.
Nature of the Claim
On October 31, 2012, a claim was commenced against the Canadian accounting firm of Schwartz Levitsky Feldman LLP.
The claim alleges that Schwartz Levitsky Feldman LLP was negligent in failing to exercise the care, skill and diligence of a reasonably competent auditor of a public company, and that it breached its duty of care to investors by providing an unqualified “clean” audit opinion in respect of the Chinese operations of Southern China Livestock Inc., when, in fact, the financial statements were not a fair presentation of the business. Excalibur’s claim on behalf of the proposed class of investors is that none of the investors would have invested in the company but for their reliance on the clean audit report negligently prepared by Schwartz Levitsky Feldman LLP.
This claim is advanced on behalf of a proposed class of investors who purchased investment units in a U.S. company called Expedite 4, Inc. through a private placement financing in 2010. In total, investors paid USD $7,594,965 for investment units in Expedite 4, Inc., and the units are now worthless. Expedite 4, Inc. is now known as Southern China Livestock Inc.
The claim was certified as a class action by the Ontario Court of Appeal in 2016. The class is defined as:
all persons or entities who purchased investment units (“Units”) of Expedite 4, Inc. between March 29, 2010 and December 23, 2010, and who continued to hold any of the shares or warrants comprising the Units as of December 23, 2010, other than Excluded Parties where the Excluded Parties are:
(i) Schwartz Levitsky Feldman LLP (the Defendant), including its partners, employees, successors and assigns;
(ii) the officers, directors, employees, agents, legal representatives, subsidiaries, affiliates, predecessors, successors and assigns of Expedite 4, Inc., Southern China Livestock International Inc., or Southern China Livestock Inc., and any entity in which any of the foregoing have or had any legal or de facto controlling interest; and
(iii) Rodman & Renshaw LLC and Newbridge Securities Corporation (together the “Placement Agents”), including their officers, directors, senior management employees, predecessors, successors and assigns.
Notice of Settlement Approval
Why am I Getting this notice?
You have been identified as a potential Class Member. Class Members are all investors who purchased units of Expedite 4, Inc., later known as Southern China Livestock (“SCL”), between March 29, 2010 and December 23, 2010 and still held their units as of December 23, 2010.
A notice was sent to you on April 8, 2020 describing a proposed settlement of this class action.
On May 4, 2020, the Ontario Superior Court of Justice approved the settlement.
This notice explains how Class Members can receive compensation from the settlement. Class Members must submit claims for compensation no later than June 10, 2020, at www.SouthernChinaLivestockSettlement.ca.
What is this class action about?
Excalibur Special Opportunities LP (“Excalibur”) brought an action in the Ontario Superior Court of Justice against SCL’s auditor, Schwartz Levitsky Feldman LLP (“SLF”). The claim alleges negligence against SLF relating to its audit opinions that were included in SCL’s private placement memorandum.
The court appointed Excalibur as representative plaintiff on behalf of the Class of investors, and Paliare Roland Rosenberg Rothstein LLP as Class Counsel in December 2016.
What is happening in this class action now?
The Ontario Superior Court of Justice approved a settlement of the class action on May 4, 2020. A copy of the court’s decision approving the settlement is available at www.SouthernChinaLivestockSettlement.ca.
The period is now opening for Class Members to submit claims for compensation. The deadline to submit a claim for compensation is June 10, 2020.
What are the terms of the settlement?
Under the settlement, SLF has made a payment of $4,200,000.00 CAD to establish a Settlement Fund, and will be contributing up to $60,000.00 CAD towards the costs of administering the settlement.
The Ontario Superior Court of Justice approved payment of fees, disbursements, and taxes of Class Counsel, and an honorarium to Excalibur out of the Settlement Fund. It is also anticipated that a small portion of the costs of administering the settlement will be paid out of the Settlement Fund.
After payment of those amounts, the remainder of the Settlement Fund will be distributed to Class Members who submit claims for compensation. The amount each Class Member receives will be based upon the size of their investment in SCL. The formula for Class Members’ compensation is set out in the settlement agreement and in the Court’s decision approving the settlement.
A copy of the settlement agreement, the decision of the Ontario Superior Court of Justice approving the settlement, and other related documentation is available online at www.SouthernChinaLivestockSettlement.ca.
I am a class member, or I represent a class member. What do i need to do?
The claims process is now open. Class members must submit a claim to receive compensation from the settlement at www.SoutherChinaLivestockSettlement.ca. Class Members must submit claims for compensation no later than June 10, 2020.
When and how can i get compensation from the settlement?
Class Members may submit claims for compensation from the settlement on the claims administrator’s website: www.SouthernChinaLivestockSettlement.ca. The claim form is available on the CLAIMS tab of the website.
To obtain compensation, Class Members must provide information to confirm their identities and the amount of their investments in SCL.
The deadline to submit claims for compensation is June 10, 2020.
Class Members who submit valid claims can expect to receive compensation by August 10, 2020.
Class Members should ensure that the claims administrator has updated contact information for them to mail cheques.
How can I get more information?
Questions for the Claims Administrator should be directed to:
Epiq Class Action Services Canada Inc.
Southern China Livestock Settlement
P.O. Box 507 STN B
Ottawa ON K1P 5P6
Questions for Class Counsel should be directed to:
Paliare Roland Rosenberg Rothstein LLP
Southern China Livestock Settlement
155 Wellington St West 35th Floor
Toronto ON M5V 3H1
Last Updated May 2020
- Leave to Appeal to the Supreme Court denied June 8, 2017
- Appeal granted and class action certified December 6, 2016
- Motion for Leave to Appeal to Court of Appeal granted November 15, 2016
- Appeal Denied June 15, 2015
- Certification Denied July 8, 2014
- Certification Motion argued June 26-27, 2014
- Reply delivered October 1, 2013
- Statement of Defence delivered September 13, 2013
- Statement of Claim issued October 31, 2012
- Leave to maintain action pursuant to s. 28 of the Limited Partnership Act granted June 4, 2013.
Reasons for Settlement Approval (Justice Perell), May 4, 2020
Notice of Certification
Court of Appeal Order, December 6, 2016
Reasons for Decision of Court of Appeal, December 6, 2016
Reasons for Decision from the appeal to Divisional Court dated June 15, 2015
Reasons for Decision re Certification, (Justice Perell) dated July 8, 2014
SCL - Statement of Defence
Excalibur, SLF - Reply
Statement of Claim