OKLAHOMA CITY, Nov. 16, 2012 /PRNewswire/ -- Avalon
Correctional Services, Inc. (CITY.PK) and Donald and Tiffany Smith announce that they and
The Ravenswood Investment Company, L.P. and Ravenswood Investments
III, L.P. have entered into a definitive settlement of the
derivative lawsuit titled Ravenswood Investment Company, L.P.
and Ravenswood Investments III, L.P. v. Avalon Correctional
Services, Inc., Tiffany Smith and
Donald E. Smith, 09-CV-00070-R
(W.D. Okla.).
Under the terms of the settlement, Avalon will submit an offer
to purchase the common shares of Avalon held by all of Avalon's
non-management minority shareholders for $4.05 in cash plus the pro rata portion of the
remaining amount of a fee and expense pool, if any, that is not
used to pay any fees and expenses that may be awarded by the Court
(an amount between $0 and $0.30 per
share inclusive) and, subject to certain exceptions, a callable
three-year, non-voting new preferred share of Avalon with a
$1.75 face amount and an annual
dividend of 7%, paid quarterly.
The settlement which will resolve all claims in the litigation
is not an admission of wrongdoing or liability by any of the
defendants. The settlement is subject to the approval of the
United States District Court for the Western District of
Oklahoma following notice to all
shareholders and a hearing as well as certain other
conditions. A motion for such Court approval was filed on
November 16, 2012 and it is
anticipated that any Avalon shareholders who object to the
settlement will have the opportunity to be heard. It is
further anticipated that the approval process will take between 90
to 120 days although it could be longer. If approved, the
offer to purchase will be made and shareholders will have 90 days
in which to accept the offer.
Given the potential cost and burden of continued litigation,
Avalon believes that settling this lawsuit is in the best interest
of all Avalon stakeholders. The Company is pleased to resolve
this matter and put the Ravenswood derivative litigation behind
it.
The purpose of this press release is to make a general public
announcement concerning the settlement and does not contain all of
the terms and conditions of the settlement. The definitive
settlement documents are attached to the motion filed in the
litigation pending in the Western District of Oklahoma on November
16, 2012. This communication shall not constitute an
offer to sell or buy or the solicitation of an offer to sell or buy
any securities.
SOURCE Avalon Correctional Services, Inc.