Benzinga | Dec 7, 2020 06:59AM EST

China Automotive Systems Announces Hearing on February 5, 2021 on Proposal to Settle Stockholder Derivative Lawsuit

China Automotive Systems, Inc. (NASDAQ:CAAS) ("CAAS" or the "Company"), a leading power steering components and systems supplier in China, today announced that a settlement hearing will be held on February 5, 2021 at 11:00 a.m. EST at the Court of Chancery in the Leonard L. Williams Justice Center, 500 North King Street, Wilmington, DE 19801.

The purpose of the hearing is to determine among other things, (i) whether the proposed Stipulation of Settlement ("Settlement") should be approved as fair, reasonable, and adequate; (ii) whether the Action should be dismissed with prejudice and the releases specified and described in the Settlement (and in the Long-Form Notice) should be granted; and (iii) whether Plaintiffs' Counsel's application for an award of attorneys' fees and reimbursement of litigation expenses should be approved.

If the Settlement is approved by the Court, no further action is required by current CAAS stockholders. Because the Settlement is non-monetary, CAAS stockholders do not have to submit a claim form or take any other action in connection with the Settlement. Management expects the impact of the suit on the Company's consolidated financial statements to be immaterial.

Any objections to the proposed Settlement and/or Plaintiffs' Counsel's application for an award of attorneys' fees and reimbursement of litigation expenses, must be filed with the Register in Chancery and delivered to Plaintiffs' Counsel and Defendants' counsel and received no later than January 26, 2021, in accordance with the instructions set forth in the Long-Form Notice.

Plaintiffs' Counsel is Eric L. Zagar, Esq., Kessler Topaz Meltzer & Check, LLP, 280 King of Prussia Road, Radnor, PA 19087. Defendants' counsel is c/o Winston & Strawn LLP, 42nd Floor, Bank of China Tower, 1 Garden Road, Central, Hong Kong.

On January 7, 2019, three purported stockholders of the Company filed a stockholder derivative complaint on behalf of the Company against the Company's directors Hanlin Chen, Qizhou Wu and Guangxun Xu and former directors Arthur Wong and Robert Tung in the Delaware Court of Chancery. The complaint alleged that the directors had (a) breached their fiduciary duties by approving and paying excessive compensation to the non-employee directors of the Company, Arthur Wong, Guangxun Xu and Robert Tung, and (b) failed to make full and accurate disclosure of all material information with respect to director qualification and director compensation paid in 2017 in the Company's annual proxy statement on Schedule 14A filed on October 10, 2018. The directors have engaged their own counsel to answer this complaint. The directors of the Company will continue to answer this complaint.

Postcards have been mailed to all shareholders regarding this hearing and each shareholder has the right to attend this hearing. Copies of the Settlement and the Long-Form Notice are available for review at the "News Release" section of www.caasauto.com.