OPTrust Announces Historic Settlement of Nortel Securities Class ActionPosted: February 8, 2006
TORONTO, Ontario - February 8, 2006 - The OPSEU Pension Trust ("OPTrust") is pleased to announce the conditional settlement of a major U.S. securities class action against Nortel Networks. OPTrust was appointed by United States District Judge Richard M. Berman as sole Lead Plaintiff in this action, which is pending in Federal Court in the Southern District of New York (In Re Nortel Networks Corp. Securities Litigation, 01-CIV-1855)
Under the settlement, Nortel will pay financial compensation of approximately US$2.4 billion (based on current share prices), consisting of U.S.$575 million in cash and approximately 628 million common shares. Compensation will be shared equally between the members of the OPTrust class, which covers the class period October 24, 2000 to February 15, 2001, and the members of a subsequent class covered by a second securities class action for the period April 24, 2003 to April 27, 2004 (the "Nortel II litigation").
As a major institutional investor in Canada, OPTrust has a longstanding commitment to shareholder rights and the proper functioning of the securities markets in which it invests.
"OPTrust has worked hard for many years to bring this case to its successful conclusion, and, with this conditional settlement, has secured an historically significant financial recovery for class members," said Heather Gavin, Chief Administrative Officer of the OPSEU Pension Trust. "It is very important that institutional owners live up to their obligations as shareholders, and we believe that the OPSEU Pension Trust has fulfilled this important responsibility in regard to this litigation."
The settlement is conditional on, among other things, corporate governance reforms to be agreed between the plaintiffs and Nortel, and the negotiation of further settlement payments from insurance carriers. The settlement is also subject to court approval and to applicable regulatory approvals.
Senior Judge Robert W. Sweet of the Southern District of New York successfully mediated the intense discussions leading to these arrangements. The mediation was initiated following Judge Sweet's appointment by Judges Berman and Preska, and took several months of protracted discussions (including an intensive two day session this week involving the top management of Nortel and senior representatives from OPTrust and other plaintiffs) to culminate in the conditional settlement announced today. Judge Sweet will continue to work with the parties to resolve outstanding issues.
OPTrust manages one of Canada's largest pension funds and administers the OPSEU Pension Plan, with more than $10 billion in assets under management.
Murray Gold (416) 595-2085, or Brigitte S. Rudman (212) 631-8680