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Sino-Forest Corporation
This class action concerns allegations that the public filings of Sino-Forest Corporation (“Sino-Forest”) contained false and/or misleading statements about its business and affairs. It is alleged that Sino-Forest falsely maintained that its financial statements complied with Canadian generally accepted accounting principles (GAAP) and it materially overstated the size and value of its forestry assets, including its holdings in China’s Yunnan province, and its revenue from the sale of those assets. The plaintiffs claim $6.5 billion on behalf of class members.
On June 2, 2011, Muddy Waters Research released a report alleging fraud and that Sino-Forest “massively exaggerates its assets”. Muddy Waters Research claimed to have “smoking gun evidence” of an example of Sino-Forest overstating forestry assets.
On August 26, 2011, the Ontario Securities Commission issued a temporary cease trade order against Sino-Forest, which prohibits all trading in the securities of Sino-Forest in Ontario. The order was initially effective for 15 days, but it has been extended and is currently effective to April 16, 2012.
On November 10, 2011, the Globe and Mail reported that the RCMP had launched a criminal investigation into whether executives of Sino-Forest defrauded Canadian investors.
On March 30, 2012, Sino-Forest Corporation sought and was granted protection from its creditors pursuant to the federal Companies’ Creditors Arrangement Act (CCAA). This is insolvency legislation and the initial order provides for a stay of legal proceedings against the company.
Sino-Forest’s shares were delisted from the TSX on May 9, 2012.
The action applies to anyone who purchased Sino securities between March 19, 2007 and June 2, 2011 (the “Class Period”) on the Toronto Stock Exchange or other secondary market in Canada. This includes securities purchased over-the-counter, and anyone who purchased Sino securities during the Class Period who reside in Canada or were a resident of Canada at the time of purchase and who acquired Sino securities outside of Canada. In addition, this includes anyone who purchased Sino securities during the Class Period by distribution in Canada in an Offering, or anyone who is a resident of Canada or who was a resident of Canada at the time of purchase and acquired Sino securities by offering outside of Canada.
Please note: the class definition excludes anyone
(a) who is a resident or who was domiciled in the Province of Quebec at the time they purchased Sino securities, and who are not precluded from participating in a class action by virtue of Article 999 of the Quebec Code of Civil Procedure, RSQ, c C-25; and
(b) who purchased a note during the Class Period and who sold the note during the Class Period.
If you are interested in receiving email updates about this class action please complete the Class Action Information Form.
Koskie Minsky LLP and Siskinds LLP represent the plaintiffs in this action.
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Latest Developments
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August 25, 2017
The motion for judgment against Kai Kit Poon was granted.
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June 26, 2017
A motion for judgment against Kai Kit Poon is scheduled to be heard on August 24, 2017.
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April 5, 2017
Regional Senior Justice Morawetz granted the order approving the relief requested by the Plaintiffs. A copy of the order is available here.
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March 2, 2017
A hearing has been scheduled to approve various relief sought by the plaintiff and class counsel to approve the claims filing procedure and deadline to participate in the BDO and Directors Settlements. More information about the hearing is available here.
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December 8, 2016
Certain class members are entitled to opt out of the Directors settlement. Please find enclosed the Opt Out Notice and Opt Out Form, which describe who is entitled to opt out.
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November 16, 2016
The motions to approve the Directors and BDO Limited settlements and plans of allocation were approved.
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November 5, 2016
The motions to approve the BDO and Directors settlements, plans of allocation for the BDO, Directors, and Horsley settlements, and class counsel fees is scheduled to be heard on November 16, 2016. The relevant motion records and facta are available under the documents tab.
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September 27, 2016
The class action plaintiffs have entered into a proposed settlement with BDO Limited and are seeking court approval of the proposed settlement, class counsel fees, and ancillary relief. Please find enclosed a copy of the Settlement Agreement, the Notice and the Notice of Objection.
The plaintiffs have also entered into a settlement with the directors, subject to court approval. A notice providing further information regarding the settlement approval hearing, proposed counsel fees and the plan of allocation and how to object can be view here: Notice and Notice of Objection.
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July 28, 2016
The plaintiffs have entered into a proposed settlement agreement with BDO Limited. The settlement approval materials will be posted shortly.
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March 29, 2016
The motion to approve the settlement with the Independent Directors was approved. Copies of the orders approving the settlement and class counsel fees are available here and here.
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March 21, 2016
Please find enclosed copies of the plaintiffs’ motion record, factum, and book of authorities for the motion for approval of the settlement with the independent directors and the plaintiffs’ motion record, factum, and book of authorities for the motion for fee approval arising from the motion for approval of the settlement with the independent directors.
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February 22, 2016
The class action plaintiffs have entered into a settlement with the independent directors. A copy of the settlement agreement is available here. A copy of the notice of the hearing to approve the settlement and class counsel’s fees is available here.
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November 9, 2015
The motion for enforcement and recognition of the order approving the Dealers settlement will be heard before Judge Glenn of the United States Bankruptcy Court on November 23, 2015. A copy of the motion to recognize and enforce the order is available here. The declaration in support of the motion is available here. A copy of the notice is available here.
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October 30, 2015
Justice Morawetz approved the settlement with the Underwriters, class counsel fees, and the claims and distribution protocol. A hearing to recognize the settlement in the United States Bankruptcy Court is scheduled for November 24, 2015.
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June 24, 2015
Justice Morawetz did not approve the settlement with the Underwriters. A copy of his reasons are available here.
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June 5, 2015
The US recognition and enforcement hearing for the motion to approve the underwriter settlement has been adjourned. A copy of the notice of adjournment is available here.
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April 13, 2015
To view the plaintiffs’ motion record for fee approval returnable May 11, 2015, click here.
To view the plaintiffs’ motion record for settlement approval returnable May 11, 2015, click here.
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February 25, 2015
The hearing to approve the underwriter settlement, the plan of allocation and distribution, class counsel fees, payment to the administrator, and to permit late claims in the Ernst & Young settlement is scheduled for May 11, 2015. A copy of the court approved notice and the notice of objection are available here.
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January 29, 2015
Justice Morawetz approved the notice of the underwriter settlement approval hearing. A copy of the order is available here.
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January 26, 2015
The plaintiffs entered into a settlement agreement with the underwriters for $32.5 million, subject to court approvals. A copy of the settlement agreement can be found here.
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January 20, 2015
Justice Perell has certified the action and has granted leave to proceed with claims made pursuant to Part XXIII.1 of the Ontario Securities Act. To review the reasons for decision please click here.
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January 12, 2015
The motion for leave and certification was heard today. The majority of the relief sought by the plaintiffs was not opposed or consented to by the defendants. Sino-Forest opposed certain claims advanced by former noteholders. Justice Perell reserved his decision on this issue.
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July 31, 2014
The settlement with David Horsley was approved. Please find the order approving the settlement here.
Class counsel’s fee and disbursement request was approved. Please find the order approving class counsel’s fees and disbursements here.
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July 17, 2014
To view the plaintiffs’ book of authorities for fee approval returnable July 24, 2014, click here.
To view the plaintiffs’ factum for fee approval returnable July 24, 2014, click here.
To view the plaintiffs’ factum for settlement approval returnable July 24, 2014, click here.
To view the plaintiffs’ motion record for fee approval returnable July 24, 2014, click here.
To view the plaintiffs’ motion record for settlement approval returnable July 24, 2014, click here.
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June 13, 2014
The plaintiffs obtained a settlement of $4.2 million from David H. Horsley, subject to court approvals. The notice of court approval is available here. The notice of objection is available here.
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March 13, 2014
Leave to appeal the Ernst & Young settlement to the Supreme Court of Canada was denied.
http://scc-csc.lexum.com/scc-csc/news/en/item/4542/index.do
The administration of the Ernst & Young settlement will continue as planned.
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January 10, 2014
The orders approving (a) counsel fees; (b) the distribution protocol; and (c) awarding an honorarium have been issued and entered. These orders can be found in the documents section of this website.
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December 27, 2013
On December 27th the court approved class counsel fees and the claims and distribution protocol, with reasons to follow. To view the endorsements, please click here.
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December 9, 2013
To view the Supplementary Motion Record of the Plaintiffs (Claims and Distribution Protocol Approval, returnable December 13, 2013), please click here.
To view the Book of Authorities of the Plaintiffs (Motion for Fee Approval, returnable December 13, 2013), please click here.
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November 28, 2013
To view the plaintiffs motion record for fee approval returnable December 13, 2013 please click here.
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November 26, 2013
The order approving the Ernst & Young Settlement in the Ontario Superior Court was recognized and given full force and effect by the United States Bankruptcy Court, Southern District of New York. A copy of the order is available here.
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November 4, 2013
The Notice of Claims Filing Deadline and Hearing to Approve the Claims and Distribution Protocol and Counsel Fees can be viewed here. Additional information about the Ernst & Young settlement or proposed Claims and Distribution Protocol is available on the Ernst & Young Settlement page of the Sino-Forest class action website:
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September 23, 2013
The objectors to the Ernst & Young Settlement have sought leave to appeal the settlement to the Supreme Court of Canada. The class action plaintiffs’ response is due October 23, 2013. A copy of the objectors argument is available here.
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September 20, 2013
The following timetable has been put in place for approval of the plan of distribution and class counsel fees for the Ernst & Young settlement:
October 16, 2013 Service of materials in support of the motion approving the notice plan October 23, 2013 Motion to approve notice to class of proposed allocation and fees at 11:00 a.m., 330 University Avenue, 8th floor December 13, 2013 Motion to approve allocation and fees -
September 19, 2013
The schedule for the certification and leave motion in this action has been amended as follows:
October 7, 2013 Defendants to deliver responding records, without prejudice to BDO delivering supplemental material by January 10, 2014 November 7, 2013 Plaintiffs to deliver reply records, if any, without prejudice to the plaintiffs right to reply to BDO by January 31, 2014 March 4, 2014 Cross-examinations to be completed March 31, 2014 Plaintiffs to deliver factum April 17, 2014 Defendants to deliver factum May 22 – 30, 2014 Hearing of motions for leave under the Securities Act and for certification -
June 28, 2013
The class action plaintiffs’ motion to quash was successful. The Court of Appeal held that the objectors’ appeal of the Ernst & Young settlement could not proceed.
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June 26, 2013
Leave to appeal the Ernst & Young settlement was denied by the Court of Appeal. A copy of the decision is available here. The Sino-Forest security holders who had sought leave to appeal the Ernst & Young settlement had also sought to appeal the settlement directly to the Court of Appeal. A motion to quash that appeal will be heard by the Court of Appeal on June 28, 2013.
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April 9, 2013
A copy of the notice of motion seeking leave to appeal the Ernst & Young settlement is available here.
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April 9, 2013
Certain class members have sought leave to appeal the Ernst & Young settlement.
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March 20, 2013
The Ernst & Young Settlement was approved. A copy of Justice Morawetz’s decision is available here.
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February 5, 2013
The motion to approve the Ernst & Young Settlement was heard yesterday. Justice Morawetz of the Superior Court of Justice heard the motion, and reserved his decision.
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February 1, 2013
Further materials regarding the Ernst & Young Settlement Approval Motion can be found here.
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December 21, 2012
Notice of Proposed Settlement with Ernst & Young LLP
The Plaintiffs have entered into a proposed settlement with Ernst & Young (the “Settlement Agreement”). A copy of the Settlement Agreement can be viewed here.
The proposed Settlement Agreement is subject to court approval. To learn more about the proposed Settlement Agreement, including information as to how you can object or otherwise make submissions to the court regarding the settlement, please view the Notice of Proposed Settlement here.
Anyone wishing to object to the Settlement Agreement must follow the instructions in the Notice of Proposed Settlement and fill out the following Notice of Objection here.
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December 19, 2012
The motion to approve the Ernst & Young settlement, which has been re-scheduled for February 4, 2013, will proceed according to the following schedule:
January 11, 2013 Delivery of motion materials by the plaintiffs January 18, 2013 Delivery of responding motion materials January 24 and 25, 2013 Cross-examinations (if any) January 30, 2013 Delivery of facta February 4, 2013
Motion Date -
December 13, 2012
On December 13, 2012, Justice Morawetz released his endorsement scheduling the motion to approve the Ernst & Young settlement on January 4, 2013. A copy of Justice Morawetz’s endorsement is available here.
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December 12, 2012
On December 12, 2012, Justice Morawetz released his reasons granting the motion sanctioning the Plan of Compromise and Arrangement. A copy of Justice Morawetz’s reasons is available here.
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December 12, 2012
On December 12, 2012, the Plan Sanction Order was issued by the court. A copy of the Plan Sanction order is available here.
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December 10, 2012
On December 10, 2012, Justice Morawetz endorsed the motion sanctioning the Plan of Compromise and Arrangement. A copy of Justice Morawetz’s endorsement is available here.
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December 10, 2012
On December 10, 2012, Justice Morawetz denied the motion to adjourn the sanctioning of the Plan of Compromise and Arrangement. A copy of Justice Morawetz’s endorsement is available here.
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December 7, 2012
On December 7, 2012, Sino-Forest Corporation appeared before Justice Morawetz seeking an order sanctioning the Plan of Compromise and Arrangement. The plaintiffs agreed not to oppose the Plan.
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December 3, 2012
A meeting to consider the Sino-Forest’s Amended Plan of Compromise and Reorganization dated December 3, 2012 was held at 10:00 a.m. on December 3, 2012. The creditors voted on and approved, by the required majorities, the Plan of Compromise and Reorganization of Sino-Forest pursuant to the Companies’ Creditors Arrangement Act (Canada) and the Canada Business Corporations Act dated December 3, 2012.
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December 3, 2012
The plaintiffs obtain settlement of $117 million from Ernst & Young LLP, subject to court approvals. The settlement is the largest settlement by an auditor in Canadian history and is one of the largest auditor settlements worldwide.
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November 9, 2012
The Settlement Agreement with Pöyry (Beijing) Consulting Company Limited was approved by the Quebec court. To view the court approved notice for both the Ontario and Quebec class actions, click here.
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September 25, 2012
The settlement agreement with Pöyry (Beijing) Consulting Company Limited was approved by the court.
To view the reasons for the approval of the settlement, click here.
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July 13, 2012
There is a tentative settlement with the Pöyry (Beijing) Consulting Company Limited (“Pöyry”). The tentative settlement only settles claims against Pöyry in both the Ontario and Quebec class actions. The settlement does not involve the resolution of any claims against Sino-Forest Corporation or any of the other defendants in the class actions.
There will be court hearings in Ontario and Quebec to consider whether to approve the tentative settlement as follows:
Ontario: September 21, 2012 at 10:00 a.m. at Osgoode Hall, 130 Queen Street West, Toronto, Ontario, Canada
Quebec: October 30 and 31, 2012 at 9:30 a.m. at 300 Boulevard Jean-Lesage, Quebec City, Quebec, Canada
To view the notice of tentative settlement with Pöyry please click here.
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May 14, 2012
The plaintiffs have been granted permission to proceed with two motions in the class action, despite the insolvency proceedings. On May 17, 2012, the court will hear plaintiffs have a motion to approve the CFI litigation funding agreement (mentioned in previous updates). The court will also hear the plaintiffs’ motion to approve a notice relating to a tentative settlement with Pöyry (Beijing) Consulting Company Limited. The notice would explain that there will be a hearing before the court to consider whether to approve the settlement, which interested persons could attend. The hearing will likely be in the Fall. The notice, if approved, will be posted in a latest development.
The other major development relates to the Sino-Forest insolvency proceeding. Today, the court approved a procedure for claims against Sino-Forest and its directors and officers. Significantly, the order provides that the plaintiffs are authorized to file one proof of claim in respect of the substance of the matters in this class action. It states that members of the class may rely on that one proof of claim and are not required to file individual proofs of claim for the claims forming the subject matter of this class action.
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April 12, 2012
On March 30, 2012 Sino Forest Corporation obtained creditor protection under the CCAA. The initial order provided for an interim stay of proceedings against Sino Forest. The plaintiffs in this class action have two motions pending before the court that they intend to have heard despite the stay of proceedings. On April 20, 2012, class counsel will appear in the insolvency court to ask the court to lift the stay and permit the plaintiffs’ motions.
The first motion, mentioned in our latest update of March 6, 2012, is for approval of the CFI litigation funding agreement. The second motion is for certification for settlement purposes against only Pöyry (Beijing) Consulting Company Limited. This proposed certification arises from a tentative settlement with Poyry. The tentative settlement is limited to Poyry and does not affect the class action against the other defendants, which will continue.
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March 27, 2012
Justice Perell released reasons on March 26, 2012 refusing to allow the defendants to bring preliminary motions in advance of the plaintiffs’ motions for certification and leave to bring statutory claims in November 2012. His Honour agreed with class counsel that allowing the defendants’ motions to proceed in advance would lead to inevitable delays and would be unfair. Justice Perell ordered that the defendants’ motions should be heard at the same time as certification and leave. A copy of His Honour’s reasons is available here.
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March 6, 2012
The court has scheduled four motions in this action, all of which will take place in 2012:
- On March 22, 2012, the court will hear a motion to determine whether the defendants are required to deliver a statement of defence before the certification motion and for the defendants to produce information about available insurance.
- On April 17, 2012, the court will hear a motion to determine whether to approve a funding agreement between the plaintiffs and Claims Funding International (CFI). The funding agreement essentially provides that CFI will indemnify the plaintiffs for any costs awards made against them in the action.
- On November 21-30, 2012, the court will hear motions for certification and for leave under the Ontario Securities Act. A certification motion is necessary for every class action in Ontario and involves the court’s consideration of whether, from a procedural prospective, the case is appropriate to continue as a class action. The motion for leave involves a preliminary review of the merits of this action for the purposes of advancing certain claims that are provided for in the Ontario Securities Act.
There will be updates following the results of each motion.
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February 3, 2012
The plaintiffs have filed an amended notice of action and statement of claim. It includes BDO Limited, Banc of America LLC and Credit Suisse Securities (USA) LLC as defendants and expands the allegations on behalf of noteholders. A copy of these documents can be found here.
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January 20, 2012
Koskie Minsky LLP and Siskinds LLP are appointed as class counsel in this class action and the plaintiffs are granted leave to file a Fresh As Amended Statement of Claim. The Fresh As Amended Statement of Claim adds additional claims on behalf of noteholders, such that this class action would apply to persons who acquired Sino-Forest shares or notes in Canada between March 2007 and June 2, 2011. The Fresh As Amended Statement of Claim also adds Robert Wong, David Grant and Sjunde AP-Fonden as plaintiffs and BDO Limited, Credit Suisse Securities (USA) LLC and Banc of America Securities LLC as defendants. The court’s order can be viewed here.
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January 7, 2012
The Honourable Justice Perell grants carriage to Koskie Minsky LLP and Siskinds LLP in the Labourers v. Sino Forest class action. To view the reasons for decision, please click here.
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September 20, 2011
The statement of claim has been served on most of the Defendants. The parties are arranging a case conference in order to address preliminary matters and to set a schedule for this proceeding.
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July 21, 2011
This action has been expanded to include claims against the underwriters for Sino-Forest’s June 2009 and December 2009 prospectus offerings. A new notice of action was issued on July 20, 2011 and can be viewed under the “Documents” tab at the right of this page.
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June 20, 2011
The Notice of Action was issued. Please refer to the “Documents” tab at the right of this page to view this document.
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August 25, 2017
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Documents
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Motions
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Outstanding
- August 24, 2012 Motion Record of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012) - Part 1
- August 24, 2012 Motion Record of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012) - Part 2
- August 24, 2012 Motion Record of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012) - Part 3
- August 24, 2012 Factum of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012)
- August 24, 2012 Book of Authorities of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012) - Part 1
- August 24, 2012 Book of Authorities of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012) - Part 2
- August 24, 2012 Compendium of Ad Hoc Committee of Purchasers of the Applicant's Securities (returnable August 28, 2012)
- May 11, 2012 Compendium of Ad Hoc Committee of Purchasers of the Applicant's Securities (Motions Returnable May 14, 2012)
- April 26, 2012 Motion Record of the Plaintiffs (Motion for Certification returnable November 21-30, 2012)
- April 26, 2012 Motion Record (Motion Returnable May 8, 2012)
- April 12, 2012 Motion Record of the Plaintiffs (Motion for Leave - Part XXIII.1 of the Securities Act)
- April 11, 2012 Motion Record of Ad Hoc Committee of Purchasers of the Applicant's Securities (Returnable April 13, 2012)
- April 11, 2012 Motion Record of the Plaintiffs (Certification for Settlement Purposes and Notice of Fairness Hearing)
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Completed
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Motions
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FAQS
What is a class action?
A class action is a lawsuit which provides a method for a large group of people with common claims to join together to advance one large claim. Class actions are a more efficient and cost-effective way for groups of people with common claims to gain access to the legal system and seek justice.What does certification mean?
In order for an action to proceed as a class action, the court must determine whether it is appropriate for the case to be treated as a class action. Some of the factors the courts consider are the extent to which the claims of the class members are common, and whether a class action is preferable to other methods (such as individual actions) of advancing the issues. The decision as to whether a class action should be certified takes place at a certification hearing and is decided by a judge. If certified, a representative plaintiff will advance the action on behalf of all of the class members.
How do I know if I am a Class Member?
The certification order will always contain a description of who is a class member. We post the certification orders in our actions so that you can review them. You do not need to “sign up” to become involved in a class action. If you are included in the class description, you are automatically a class member who will be affected by the outcome of the class action unless you decide to “opt out”.
Are Class Members notified of the certification of the class proceeding?
Yes. After the claim has been certified, the court will authorize notice to be given to the members of the class.
Can I opt out of a class action and pursue independent legal action?
Yes. When a class action is certified, class members are always given an opportunity to opt out of the action. A deadline is imposed for opting out. If you do not opt out by the given deadline, class members will be bound by the outcome of the class action, whether it is successful or unsuccessful. If you opt out, you will not receive any benefit if the action is successful.
Will there be any cost to class members for legal fees?
Typically, class actions are handled on a contingency fee basis, which means that the class action lawyers will be paid only if the class action is successful at trial or settled. In that case, class counsel fees may be paid by the defendants or out of the settlement or judgment proceeds as approved by the court. In addition, the plaintiff may seek funding assistance from the Class Proceeding Fund which, if funding is granted, may provide funding for disbursements.
I still have questions…
Please feel to contact us by using the contact information on this site.
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Contacts
Phone: 416-581-1528
Email: contactus@kmlaw.ca
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