NOTICE OF (I) PENDENCY OF CLASS ACTION AND PROPOSED SETTLEMENT; (II) SETTLEMENT FAIRNESS HEARING; AND (III) MOTION FOR AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF LITIGATION EXPENSES
NOTICE OF PENDENCY OF CLASS ACTION: Please be advised that your rights may be affected by the abovecaptioned securities class action (the “Action”) pending in the United States District Court for the Central District of California (the “Court”), if, during the period between April 10, 2015 and May 17, 2019, inclusive (the “Settlement Class Period”), you purchased or otherwise acquired the American Depositary Shares (also referred to as American Depositary Receipts) (“ADRs”) of ChinaCache International Holdings Ltd. (“ChinaCache” or the “Company”) and were allegedly damaged thereby (the “Settlement Class”).1
NOTICE OF SETTLEMENT: Please also be advised that the Court-appointed Lead Plaintiff The ChinaCache Investor Group (consisting of Plaintiffs Jingwen Zhang and Bingyang Cheng (“Plaintiff”)), on behalf of itself and the Settlement Class (as defined in ¶ 19 of the Notice), has reached a proposed settlement of the Action for $1,800,000 in cash that, if approved, will resolve all claims in the Action (the “Settlement”).
PLEASE READ THE NOTICE CAREFULLY. The Notice explains important rights you may have, including the possible receipt of cash from the Settlement. If you are a member of the Settlement Class, your legal rights will be affected whether or not you act.
If you have any questions about the Notice, the proposed Settlement, or your eligibility to participate in the Settlement, please DO NOT contact ChinaCache, any other defendants in the Action, or their counsel. All questions should be directed to Lead Counsel or the Claims Administrator (see ¶ 79 in the Notice).
- Description of the Action and the Settlement Class: The Notice relates to a proposed Settlement of claims in a pending securities class action brought by investors alleging, among other things, that defendants ChinaCache, Song Wang, Guangsheng Meng, Fengye Gao and Jing An (collectively, the “Defendants”)2 violated the federal securities laws by making false and misleading statements regarding ChinaCache. As discussed in the Notice, Defendants deny these allegations and any wrongdoing. A more detailed description of the Action is set forth in ¶¶11-18 in the Notice. The proposed Settlement, if approved by the Court, will settle claims of the Settlement Class, as defined in ¶ 19 in the Notice.
- Statement of the Settlement Class’s Recovery: Subject to Court approval, Plaintiff, on behalf of itself and the Settlement Class, has agreed to settle the Action in exchange for a settlement payment of $1,800,000 in cash (the “Settlement Amount”) to be deposited into an Escrow Account. The Net Settlement Fund (i.e., the Settlement Amount plus any and all interest earned thereon (the “Settlement Fund”) less (a) any Taxes, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys’ fees awarded by the Court) will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class. The proposed plan of allocation (the “Plan of Allocation”) is set forth on pages 9 -13 in the Notice.
- Estimate of Average Amount of Recovery Per Share: Based on Plaintiff’s damages expert’s estimates of the number of ChinaCache ADRs purchased during the Settlement Class Period that may have been affected by the conduct at issue in the Action, and assuming that all Settlement Class Members elect to participate in the Settlement, the estimated average recovery (before the deduction of any Court-approved fees, expenses and costs as described herein) per eligible share is $0.09. Settlement Class Members should note, however, that the foregoing average recovery per share is only an estimate. Some Settlement Class Members may recover more or less than this estimated amount depending on, among other factors, when and at what prices they purchased/acquired or sold shares of ChinaCache ADRs, and the total number of valid Claim Forms submitted. Distributions to Settlement Class Members will be made based on the Plan of Allocation set forth in the Notice (see pages 9 -13 in the Notice) or such other plan of allocation as may be ordered by the Court.
- Average Amount of Damages Per Share: The Parties do not agree on the average amount of damages per share that would be recoverable if Plaintiff were to prevail in the Action. Among other things, Defendants do not agree with the assertion that they violated the federal securities laws or that any damages were suffered by any members of the Settlement Class as a result of their conduct.
- Attorneys’ Fees and Expenses Sought: Plaintiff’s Counsel, which have been prosecuting the Action on a wholly contingent basis since its inception in 2019, have not received any payment of attorneys’ fees for their representation of the Settlement Class and have advanced the funds to pay expenses necessarily incurred to prosecute this Action. Court-appointed Lead Counsel, Pomerantz LLP, will apply to the Court for an award of attorneys’ fees for all Plaintiff’s Counsel (including The Rosen Law Firm, P.A. and the HAO Law Firm) in an amount not to exceed 33.3% of the Settlement Fund plus interest.3 In addition, Lead Counsel will apply for reimbursement of Litigation Expenses paid or incurred in connection with the institution, prosecution and resolution of the claims against the Defendants plus interest, in an amount not to exceed $120,000, which may include an application for reimbursement of the reasonable costs and expenses incurred by Plaintiff directly related to its representation of the Settlement Class. Any fees and expenses awarded by the Court will be paid from the Settlement Fund. Settlement Class Members are not personally liable for any such fees or expenses. The estimated average cost per affected share of ChinaCache ADRs, if the Court approves Lead Counsel’s fee and expense application, is $0.04 per eligible share.
- Identification of Attorneys’ Representatives: Plaintiff and the Settlement Class are represented by Jeremy A. Lieberman, Esq. of Pomerantz LLP, 600 Third Avenue, 20th Floor, New York, NY 10016, 212-661-1100. The Settling Defendants are represented by Michael B. Carlinsky, Esq. of Quinn Emanuel Urquhart & Sullivan, LLP, 51 Madison Avenue, 22nd Floor New York, New York 10010.
- Reasons for the Settlement: Plaintiff’s principal reason for entering into the Settlement is the substantial immediate cash benefit for the Settlement Class without the risk or the delays inherent in further litigation. Moreover, the substantial cash benefit provided under the Settlement must be considered against the significant risk that a smaller recovery – or indeed no recovery at all – might be achieved after contested motions, a trial of the Action and the likely appeals that would follow a trial. This process could be expected to last several years. Settling Defendants, who deny all allegations of wrongdoing or liability whatsoever, are entering into the Settlement solely to eliminate the uncertainty, burden and expense of further protracted litigation.
1 All capitalized terms used in the Notice that are not otherwise defined in the Notice shall have the meanings ascribed to them in the Stipulation and Agreement of Settlement dated December 15, 2020 (the “Stipulation”), which is available at www.chinacachesettlement.com.
2 Defendants Song Wang, Guangsheng Meng, Fengye Gao and Jing An are collectively referred to herein as the “Individual Defendants.”
3 Lead Counsel intends to share part of any attorneys’ fees awarded by the Court with The Rosen Law Firm, P.A. and the HAO Law Firm in accordance with their level of contribution to the initiation, prosecution, and resolution
of the Action.
YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:
SUBMIT A CLAIM FORM BY MAIL POSTMARKED NO LATER THAN SEPTEMBER 21, 2021 OR ELECTRONICALLY BY 11:59 P.M. EST ON SEPTEMBER 21, 2021
This is the only way to be eligible to receive a payment from the Settlement Fund. If you are a Settlement Class Member and you
remain in the Settlement Class, you will be bound by the Settlement as approved by the Court and you will give up any Released Plaintiff’s Claims (defined in ¶ 28 in the Notice) that you have against Defendants and Settling Defendants’ Releasees (defined in ¶ 29 in the Notice), so it is in your interest to submit a Claim Form.
EXCLUDE YOURSELF FROM THE SETTLEMENT CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION SO THAT IT IS RECEIVED NO LATER THAN AUGUST 6, 2021.
If you exclude yourself from the Settlement Class, you will not be
eligible to receive any payment from the Settlement Fund. This is the only option that allows you ever to be part of any other lawsuit against any of the Defendants or Settling Defendants’ Releasees concerning the Released Plaintiff’s Claims.
OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION SO THAT IT IS RECEIVED NO LATER THAN AUGUST 6, 2021.
If you do not like the proposed Settlement, the proposed Plan of
Allocation, or the request for attorneys’ fees and reimbursement of Litigation Expenses, you may write to the Court and explain why you do not like them. You cannot object to the Settlement, the Plan of Allocation or the fee and expense request unless you are a Settlement Class Member and do not exclude yourself from the Settlement Class.
GO TO A HEARING ON AUGUST 27, 2021 AT 9:00 A.M., AND FILE A NOTICE OF INTENTION TO APPEAR SO THAT IT IS RECEIVED NO LATER THAN AUGUST 6, 2021.
Filing a written objection and notice of intention to appear by August 6, 2021 allows you to speak in Court, at the discretion of the Court, about the fairness of the proposed Settlement, the Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of Litigation Expenses. If you submit a written objection, you may (but you do not have to) attend the hearing and, at the discretion of the Court, speak to the Court about your objection.
If you are a member of the Settlement Class and you do not submit a valid Claim Form, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Settlement Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.