Court-Appointed Counsel to the Plaintiffs in Sino-Forest Securities Class Action Comment on the Approval by the Ontario Superior

Court-Appointed Counsel to the Plaintiffs in Sino-Forest Securities Class 
Action Comment on the Approval by the Ontario Superior Court of Justice of a 
Plan of Arrangement in the Sino-Forest Insolvency Proceeding 
TORONTO, Dec. 10, 2012 /CNW/ - Today, the Ontario Superior Court of Justice 
approved a plan of arrangement in the proceeding commenced in March 2012 by 
Sino-Forest Corporation ("Sino-Forest") under the Companies' Creditors 
Arrangement Act (the "Insolvency Proceeding"). 
The Court approved the plan of arrangement at the behest of numerous 
stakeholders. A group of institutional and individual Sino-Forest 
shareholders who are represented by the law firms of Koskie Minsky LLP and 
Siskinds LLP, and who collectively held in excess of 10% of Sino-Forest's 
outstanding shares (the "Koskie-Siskinds Group"), did not oppose approval of 
the plan. 
As explained more fully below, the Koskie-Siskinds Group has prosecuted the 
class action and has participated extensively in the Insolvency Proceeding, at 
all times with the objective of ensuring that their interests and those of 
their fellow class members are protected. The Koskie-Siskinds Group includes 
the Labourers' Pension Fund of Central and Eastern Canada, the International 
Union of Operating Engineers, and Davis Selected Advisers LP, the second 
largest shareholder of Sino-Forest. 
At the same time as it approved the plan of arrangement, the Court denied an 
adjournment request of three institutional shareholders of Sino-Forest who 
collectively held less than one-tenth of the shares held by the 
Koskie-Siskinds Group. These institutional investors are Comité Syndical 
National de Retraite Bâtirente Inc., Northwest & Ethical Investments L.P. and 
Trimark Investments, and they are represented by the law firm of Kim Orr LLP 
(the "Kim Orr Group"). 
Background to the Insolvency Proceeding 
In December 2011, the Ontario Superior Court of Justice heard a motion for 
carriage of securities class actions that had been brought against Sino-Forest 
in the wake of a release by Muddy Water LLP of a research report alleging that 
Sino-Forest was a massive fraud. The defendants in the class actions include 
Sino-Forest's senior officers and directors, its then current and former 
auditors, Ernst & Young LLP and BDO LLP, and eleven financial institutions who 
collectively underwrote well over $1 billion in securities offerings of 
Sino-Forest, including Credit Suisse Securities (USA) LLC, Merrill Lynch 
Pierce Fenner & Smith Incorporated, TD Securities Inc. and RBC Dominion 
Securities Inc. 
The carriage motion was fought by three contestants, including the 
Koskie-Siskinds Group and the Kim Orr Group. In January 2012, the Ontario 
Superior Court of Justice granted carriage of the class action to the 
Koskie-Siskinds Group and ranked the Kim Orr Group last of the three groups 
which had competed for carriage. 
The Koskie-Siskinds Group is assisted by Siskinds, Desmeules, Siskinds's 
Québec-based affiliate. 
In early March 2012, the Koskie-Siskinds Group served upon the defendants in 
the class action the plaintiffs' motions for certification under the Class 
Proceedings Act, 1992 (the "Certification Motion") and for leave to commence 
an action under Part XXIII.1 of the Ontario Securities Act (the "Leave 
Motion"). The Koskie-Siskinds' motion materials were based upon their 
extensive investigation into the affairs of Sino-Forest, and included the 
affidavits of Hong Kong-based investigators specializing in financial fraud, 
accounting experts, legal experts from China and Suriname, and a financial 
economist. More than $1.2 million have been spent to date in disbursements 
Shortly after the Koskie-Siskinds Group served their Certification and Leave 
Motions, they entered into an agreement with certain of the defendants in the 
class action, the purpose of which was to toll the claims of all class 
members, including the Kim Orr Group, under Part XXIII.1 of the Ontario 
Securities Act. 
On March 26, 2012, the Ontario Superior Court of Justice issued a decision on 
a scheduling motion brought by the Koskie-Siskinds Group in the class 
action. Over the objections of the defendants in the class action, the Court 
expedited the schedule for the hearing of the Certification and Leave Motions 
to November 2012, and ordered those defendants who filed materials in 
opposition to the Leave Motion to file statements of defence prior to 
adjudication of the Certification and Leave Motions. 
Several days later, on March 30, 2012, Sino-Forest commenced the Insolvency 
On September 25, 2012, the Ontario Superior Court of Justice approved of a 
settlement with the defendant, Pöyry (Beijing) Consulting Company Limited, 
which gave the Koskie-Siskinds Group access to non-public information that was 
relevant to the claims asserted in the class action. The Québec Superior 
Court also approved that settlement on November 9, 2012. 
The Insolvency Proceeding 
Promptly following the commencement of the Insolvency Proceeding, the 
Koskie-Siskinds Group retained leading insolvency counsel from the law firm of 
Paliare Roland Rosenberg Rothstein LLP ("PRRR") to assist in the protection of 
the class members' interests in that proceeding. 
Over the next eight months, the Koskie-Siskinds Group, aided by PRRR, took 
numerous steps to protect the interests of all class members, including the 
Kim Orr Group, in the Insolvency Proceeding. 
Among other things, the Koskie-Siskinds Group: 

          a)      attended the initial hearing on short notice, and
                  made submissions (which were accepted by the
                  court) that the sale process order should be subject
                  to a comeback clause;
          b)      attended at the comeback date, and returned a motion
                  on that date that clearly set forth a number of
                  issues with respect to the Insolvency Proceeding, and
                  reserved all rights with respect to those issues
                  throughout that proceeding;
          c)      obtained an order increasing the powers of the
                  Monitor to administer Sino-Forest, which took away
                  powers from entrenched management and the then
                  existing board, protecting the assets of the company
                  for all stakeholders;
          d)      negotiated tolling agreements to prevent the erosion
                  of the class members' rights  through the passage of
                  time while the Insolvency Proceeding unfolded;
          e)      obtained representative standing in the Insolvency
                  Proceeding for the purpose of the claims procedure
                  approved by the court, and filed a proof of claim on
                  behalf of the Class to prevent the Class' claims from
                  being barred;
          f)      compelled production of non-public documents by
                  Sino-Forest so as to permit the Class Action
                  Plaintiffs to negotiate with other stakeholders in
                  the Insolvency Proceeding on an informed basis;
          g)      examined all applicable insurance policies and
                  indemnity agreements and assessed the capacity to pay
                  of various defendants, including Ernst & Young;
          h)      compelled the attendance of Sino-Forest's CEO at a
                  cross-examination and tested his evidence in the
                  Insolvency Proceeding;
          i)      engaged in multiple formal and informal, group and
                  individual mediation and negotiation sessions with
                  other stakeholders regarding the class members'
                  claims, including a Court-ordered 2-day mediation in
                  September presided over by the Honourable Justice
          j)      attended each and every hearing in the case to ensure
                  that the class members' interests were properly
                  represented; and,
          k)      negotiated the terms of the plan of arrangement with
                  Sino-Forest and with other stakeholders, brought a
                  motion challenging various features of the plan,
                  preserved the class members' right to seek the right
                  to vote on the plan, and expressly reserved all of
                  the Class Action Plaintiffs' rights in connection
                  with that motion pending the presentation of the plan
                  for sanction by the court to ensure that the plan was
                  in the best interests of the Class.

Although the Kim Orr Group has acknowledged that it monitored the Insolvency 
Proceeding closely, the Kim Orr Group took no steps within the Insolvency 
Proceeding to protect the interests of the class members.

The Settlement Agreement between Ernst & Young LLP and the Koskie-Siskinds 

On December 3, 2012, the Koskie-Siskinds Group announced a settlement with 
Ernst & Young LLP on behalf of all class members. The proposed agreement 
provides for Ernst & Young to pay C$117 million in settlement of all claims 
arising from its dealings with Sino-Forest. As is the case with all class 
action settlements, the settlement is conditional upon Court approval.

Counsel to the Koskie-Siskinds Group believe that the proposed settlement with 
Ernst & Young is the largest auditor settlement in Canadian history, and that 
this settlement is more than twice as large as the next largest auditor 
settlement. The proposed settlement with Ernst & Young also constitutes the 
5(th) largest settlement with an auditor in a securities class action, 
world-wide. On any reasonable basis, the agreement with Ernst & Young is a 
strong result for class members.

Accordingly, upon learning of the settlement, counsel to the Kim Orr Group 
congratulated counsel to the Koskie-Siskinds Group on the settlement, and at 
the hearing for an order approving of the plan of arrangement held on December 
7, 2012, a lawyer from Kim Orr LLP described the settlement in open court as 
"a very big settlement."

The plan of arrangement approved today creates a framework for the 
implementation of the Ernst & Young settlement and possible future settlements 
with other defendants in the class action. No party has yet moved for 
approval of the Ernst & Young settlement and, prior to any motion for its 
approval being heard, notice will be issued to members of the putative class 
as to the terms of the settlement and the means whereby class members may 
oppose approval of the settlement, should they be inclined to do so. When 
the agreement is presented for approval, all parties, including the Kim Orr 
Group, will be able to present their views.

The proposed settlement is not only supported by the members of the 
Koskie-Siskinds Group, but also by Paulson & Co., which was the largest 
shareholder of Sino-Forest at the time that the Muddy Waters report was issued.

About Siskinds LLP and Koskie Minsky LLP

In both 2010 and 2011, Securities Class Action Services, a unit of 
Institutional Shareholder Services (ISS), named Siskinds LLP the top Canadian 
law firm in its annual global ranking of the world's 50 leading securities 
class action law firms. Siskinds was co-lead counsel in the Imax Securities 
Litigation, the first securities class action in which leave was granted to 
commence an action under Part XXIII.1 of the Ontario Securities Act, and 
Siskinds has been lead or co-lead counsel in all Ontario securities class 
actions in which such leave was granted. Siskinds was also the first law 
firm to secure certification of a class proceeding under the Class Proceedings 
Act, 1992.

Koskie Minsky LLP is a 45-lawyer firm in Toronto specializing in class 
actions, pension and benefits, trade union labour law, employment law, civil 
litigation and construction law. Its class action group consists of 10 lawyers 
who specialize in cases relating to institutional abuse, securities fraud, 
pension fund mismanagement, consumer protection and employment issues. It has 
been involved in many of the leading cases across Canada and has recovered 
more than 4 billion dollars for its class action clients.

Media contacts:A. Dimitri Lascaris (519) 660-7844

Kirk Baert (416) 595-2117

SOURCE: Koskie Minsky LLP and Siskinds LLP

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CO: Siskinds LLP
ST: Ontario

-0- Dec/11/2012 01:08 GMT

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