Sino-Forest Corporation Notice of Proposed Settlement With

Sino-Forest Corporation Notice of Proposed Settlement With Ernst &
Young LLP 
TORONTO, ONTARIO and LONDON, ONTARIO and QUEBEC CITY, QUEBEC --
(Marketwire) -- 12/28/12 --  
TO: Everyone, including non-Canadians, who acquired Sino-Forest
Corporation ("Sino-Forest") securities (including shares and/or
notes) in the primary or secondary market in any jurisdiction between
March 31, 2006 and August 26, 2011 (the "E&Y Settlement Class") and
to everyone, including non-Canadians, who has, had, could have had or
may have a claim of any kind against Ernst & Young LLP, Ernst & Young
Global Limited or any of its member firms and any person or entity
affiliated or connected thereto ("Ernst & Young"), in relation to
Sino-Forest, Ernst & Young's audits of Sino-Forest's financial
statements and any other work performed by Ernst & Young related to
Sino-Forest. 
Background of Sino-Forest Class Action and CCAA Proceeding 
In June and July of 2011, class actions were commenced in the Ontario
Superior Court of Justice (the "Ontario Proceeding") and the Quebec
Superior Court (the "Quebec Proceeding") (collectively, the
"Proceedings") by certain plaintiffs (the "Plaintiffs") against
Sino-Forest, its senior officers and directors, its underwriters, a
consulting company, and its auditors, including Ernst & Young. In
January 2012, a proposed class action was commenced against
Sino-Forest and other defendants in the Southern District of New York
(the "US Action"). The actions alleged that the public filings of
Sino-Forest contained false and misleading statements about
Sino-Forest's assets, business, and transactions.  
Since that time, the litigation has been vigorously contested. On
March 30, 2012, Sino-Forest obtained creditor protection under the
Companies' Creditors Arrangement Act (the "CCAA"), within which
proceeding the Ontario Superior Court ordered a stay of proceedings
against the company and other parties, including Ernst & Young (the
"CCAA Proceeding"). Orders and other materials relevant to the CCAA
Proceeding can be found at the CCAA Monitor's website at
http://cfcanada.fticonsulting.com/sfc/ (the "Monitor's Website").  
On December 10, 2012, a Plan of Arrangement was approved by the court
in the CCAA Proceeding. As part of this Plan of Arrangement, the
court approved a framework by whi
ch the Plaintiffs may enter into
settlement agreements with any of the third-party defendants to the
Proceedings. The Plan expressly contemplates the Ernst & Young
Settlement (as defined in the Plan), approval of which is now sought. 
Who Acts For the E&Y Settlement Class 
Koskie Minsky LLP, Siskinds LLP, and Siskinds Desmeules, sencrl
("Class Counsel") represent the E&Y Settlement Class in the
Proceedings. If you want to be represented by another lawyer, you may
hire one to appear in court for you at your own expense.  
You will not have to directly pay any fees and expenses to Class
Counsel. However, if this action succeeds or there is a monetary
settlement, Class Counsel will seek to have their fees and expenses
paid from any money obtained for the class or paid separately by the
defendants.  
Proposed Settlement with Ernst & Young 
The Plaintiffs have entered into a proposed settlement with Ernst &
Young (the "Settlement Agreement"). If the settlement is approved, it
will be final and binding and there will be no ability to pursue a
claim (if any) against Ernst & Young through an opt-out process under
class proceedings or similar legislation. The proposed settlement
would settle, extinguish and bar all claims, globally, against Ernst
& Young in relation to Sino-Forest including the allegations in the
Proceedings. Ernst & Young does not admit to any wrongdoing or
liability. The terms of the proposed settlement do not involve the
resolution of any claims against Sino-Forest or any of the other
defendants. For an update on CCAA orders affecting Sino-Forest,
please see the CCAA Monitor's website:
http://cfcanada.fticonsulting.com/sfc/. A complete copy of the
Settlement Agreement and other information about these proceedings is
available at: www.kmlaw.ca/sinoforestclassaction and
www.classaction.ca (the "Class Action Websites"). 
The proposed settlement, if approved and its conditions fulfilled,
provides that Ernst & Young will pay CAD$117,000,000.00 to a
Settlement Trust to be administered in accordance with orders of the
court. It is the intention of Class Counsel to seek the court's
approval of a plan of allocation that distributes the settlement
funds, net of counsel fees and other administrative costs and
expenses, to members of the E&Y Settlement Class.  
In return, the action will be dismissed against Ernst & Young, and
there will be an order forever barring claims against it in relation
to Sino-Forest including any allegations relating to the Proceedings,
including claims (if any) that could be advanced through an opt-out
process under class proceedings or similar legislation. In
considering whether or how they are affected by the proposed
settlement, members of the E&Y Settlement Class and anyone else with
claims against Ernst & Young in relation to Sino-Forest should
consider the effect of the orders made and steps taken in the
Sino-Forest CCAA Proceedings. More information on the Sino-Forest
CCAA Proceedings can be found on the Monitor's Website.  
The settlement agreement with Ernst & Young is subject to court
approval, as discussed below.  
Hearings to Approve Settlement on February 4, 2013 in Toronto,
Ontario and Subsequent Hearings in Ontario, Quebec and the United
States. 
On February 4, 2013 at 10:00 a.m. (Eastern Time), there will be a
settlement approval hearing before the Ontario Superior Court of
Justice. The hearing will be heard at the Canada Life Building, 330
University Avenue, 8th Floor, Toronto, Ontario. The exact courtroom
number will be available on a notice board on the 8th Floor. 
If the settlement approval motion which is being heard by the Ontario
Superior Court of Justice on February 4, 2013 (the "Settlement
Approval Motion") is granted, then there will be a further hearing at
a later date before the Ontario Superior Court of Justice (the
"Ontario Allocation/Fee Motion") at which Class Counsel will seek
that Court's approval of (1) the plan for allocating the net Ernst &
Young settlement fund among the members of the E&Y Settlement Class;
and (2) the fees and expense reimbursement requests of Class Counsel. 
In addition, if the Settlement Approval Motion is granted, then there
may be additional hearings at later dates in the Quebec Superior
Court (the "Quebec Motion") and in the United States Bankruptcy Court
for the Southern District of New York (the "US Motion") at which
recognition and implementation of the Settlement Approval Motion and
the Ernst & Young Settlement may be sought. 
If the Settlement Approval Motion is granted, then a further notice
will be disseminated to members of the E&Y Settlement Class advising
them of the time and place of the Ontario Allocation/Fee Motion and
any Quebec Motion and/or US Motion.  
Members of the E&Y Settlement Class, and everyone, including
non-Canadians, who has, had, could have had or may have a claim of
any kind against Ernst & Young, in relation to Sino-Forest, Ernst &
Young's audits of Sino-Forest's financial statements and any other
work performed by Ernst & Young related to Sino-Forest, may attend at
the hearing of the Settlement Approval Motion and ask to make
submissions regarding the proposed settlement with Ernst & Young.  
Persons intending to object to the Ernst & Young Settlement Agreement
are required to: (a) deliver a Notice of Objection, substantially in
the form that can be found on the Monitor's Website and the Class
Action Websites, and, if this Notice is received by mail, enclosed
with this Notice (the "Notice of Objection"), to the Monitor, by
regular mail, courier or email transmission, to the coordinates
indicated on the Notice of Objection, so that it is received by no
later than 5:00 p.m. (Eastern Time) on January 18, 2013; and (b)
comply with the litigation timetable set forth below. Copies of the
Notices of Objection sent to the Monitor will be filed with the
court.  
Litigation Timetable 
By order of the Ontario Superior Court of Justice, persons intending
to participate in the Settlement Approval Motion must comply with the
following timetable: 


 
1.  Motion materials are to be delivered no later than January 11, 2013. 
    
2.  Responding motion materials are to be delivered by January 18, 2013. 
    
3.  Cross-examinations on affidavits (if any) are to be conducted on January
    24 and 25, 2013. 
    
4.  Written Submissions are to be exchanged on January 30, 2013.

 
Further Information 
If you would like additional information or to object to the Ernst &
Young Settlement Agreement, please contact Koskie Minsky LLP,
Siskinds LLP, or Siskinds Desmeules LLP at the addresses below: 


 
Koskie Minsky LLP                                                           
20 Queen St. West, Suite 900, Box 52, Toronto, ON, M5H 3R3                  
Re: Sino-Forest Class Action                                                
Tel: 1.866.474.1739 (within North America)                                  
Tel: 416.595.2158 (outside North America)                                   
Email: sinoforestclassaction@kmlaw.ca                                       
                                                                            
Siskinds LLP                                                                
680 Waterloo Street, P.O. Box 2520 London, ON N6A 3V8                       
Re: Sino-Forest Class Action                                                
Tel: 1.800.461.6166 x 2380 (within North America)                           
Tel: 519.672.2251 x 2380 (outside North America)                            
Email: nicole.young@siskinds.com                                            
                                                                            
Siskinds Desmeules, sencrl                                                  
43 Rue Buade, Bureau 320, Quebec City, Quebec, G1R 4A2                      
Re: Sino-Forest Class Action                                                
Tel: 418.694.2009                                                           
Email: simon.hebert@siskindsdesmeules.com                                   

 
Interpretation 
If there is a conflict between the provisions of this notice and the
Settlement Agreement, the terms of the Settlement Agreement will
prevail. 
Please do not direct inquiries about this notice to the Court. All
inquiries should be directed to Class Counsel. 
DISTRIBUTION OF THIS NOTICE HAS BEEN AUTHORIZED BY THE ONTARIO
SUPERIOR COURT OF JUSTICE 
Contacts:
Koskie Minsky LLP
Re: Sino-Forest Class Action
1.866.474.1739 (within North America)
416.595.2158 (outside North America)
sinoforestclassaction@kmlaw.ca
Contacts:
Siskinds LLP
Re: Sino-Forest Class Action
1.800.461.6166 x 2380 (within North America)
519.672.2251 x 2380 (outside North America)
nicole.young@siskinds.com
Contacts:
Siskinds Desmeules, sencrl
Re: Sino-Forest Class Action
418.694.2009
simon.hebert@siskindsdesmeules.com
 
 
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