SANTA ANA–Semiconductor maker Broadcom Corp. has settled a stockholder class-action lawsuit that originated after the company merged with Avago in 2015.

Joshua S. Devore, a partner in the Washington, D.C.-based law firm Cohen Milstein Sellers and Toll said the settlement provides for a series of representations to be made by Broadcom Limited and filed with the SEC.

“We will ask that the court award attorneys' fees and reimbursement of expenses that will be paid by defendants,” Devore told the Northern California Record.

A hearing is scheduled for 1:30 p.m. on Feb. 27 in the U.S. District Court for the Central District of California before Judge James Selna.

“At that time, the court will approve the settlement, and rule on a request for legal fees and expenses,” Devore said. “It consists of two pieces: supplemental disclosures that have already been made and a second set of representations that the new company will make.”

Devore noted that the case has been winding its way through court since the merger in 2015.  On Nov. 16, 2015, the court appointed the Iron Workers Fund and Oklahoma Firefighters as lead plaintiffs in the action.

Terms of the merger agreement called for Avago to pay $37 billion for all of Broadcom’s common stock.

“Under the merger agreement, shareholders could elect to receive either a combination of cash and ordinary shares in the newly formed company or a restricted equity security,” Devore said. “The equity security would not be transferable or saleable for a period of one to two years after closing.”

Devore noted that the cash and ordinary share consideration is subject to proration such that shareholders, regardless of what they elect, will likely receive approximately 54 percent cash and 46 percent ordinary shares.

In 2016, Cohen Milstein Sellers and Toll was appointed lead counsel by Selna on behalf of the Iron Workers Mid-America Pension Plan and Oklahoma Firefighters Pension and Retirement System, and the proposed class of Broadcom shareholders who were challenging the merger.

“The class-action complaint alleged that the joint proxy statement issued by the merging companies was false and misleading, and omitted material information,” Devore said. “It also noted that Broadcom’s board of directors breached their fiduciary duties to shareholders.”

Some board members were alleged to have aided in the breach, according to filings with the court.

Broadcom’s stock transfer agent, Computershare Shareholder Services, provided Kurtzman Carson Consultants LLC (KCC) with a list of 828 unique names and addresses of record holders during the class period.

According to Devore, KCC was appointed by the court to serve as settlement administrator in connection with the proposed settlement.

“In December, KCC mailed copies of the postcard summary notice to each of the 828 record holders,” Devore noted.

In total, the notice was initially sent to 1,917 potential class members.

As of Jan. 20, 2017, Devote noted that KCC has received 109,793 names and addresses of potential class members (after duplicate mailing records were removed) from individuals, brokers, dealers, banks and other nominees requesting notices to be mailed to such persons.

Also, KCC has received requests from brokers and other nominees for 113,017 postcard summary notices to be sent to such brokers and nominees so that they could forward them to their customers. All such requests were promptly fulfilled.

Devore noted that as of Jan. 20, KCC has mailed 224,823 postcard summary notices. KCC has not received any options from the settlement class.

Cohen Milstein Sellers and Toll was assisted in the case by Wolf Haldenstein Adler Freeman & Herz LLP, a national law firm with offices in San Diego, New York and Chicago; WeissLaw, a firm with offices in New York and California; and Westerman Law Corp., based in Los Angeles.

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