Class Action Filed Against Timminco Limited
On May 14, 2009 Kim Orr Barristers filed a $520 million class action on behalf of investors of Timminco Limited ("Timminco"), a company listed on the Toronto Stock Exchange under the symbol TIM. In addition to Timminco, certain officers and directors of the company are also named as defendants, including Chief Executive Officer and Chairman of the Board of Directors Dr. Heinz C. Schimmelbusch for knowingly misleading investors about Timminco's growth and profit potential.
Beginning in early 2008, Timminco and Schimmelbusch made continuous representations in the company's public disclosure regarding its ability to convert metallurgical-grade silicon into solar-grade silicon in a cost-efficient manner for sale to the solar industry.
Following criticism by certain analysts and the media, Timminco released a report by Photon Consulting in May 2008 that made positive statements about Timminco and its growth and profit potential. Timminco's stock price rose sharply in early to mid 2008 following these statements.
In August 2008, Timminco admitted that its solar-grade silicon production
process was flawed. The Photon Report was subsequently withdrawn by Timminco because "some of the material factors or assumptions originally used to develop the forward-looking information in the Photon Report, including in
respect of revenues, production line volumes and costs, may no longer be
valid." The stock price subsequently collapsed as a result. Photon Consulting
LLC is also named as a defendant in the class action.
The Statement of Claim in the class action alleges that the defendants
knew or ought to have known that the representations regarding the company's
ability to produce low-cost, high-quality silicone in commercial quantities
were false or misleading. The Plaintiff will also seek leave of the court to
bring a class action pursuant to the Civil Liability for Secondary Market
Disclosure provisions of the Securities Act (Bill 198).
The class action is being brought on behalf of all investors who acquired Timminco's shares between March 17, 2008 up to and including November 11, 2008.
On October 20, 2009, Justice Perell awarded carriage of the Timminco class action to Kim Orr Barristers. Please click here to view the carriage decision.
On January 3, 2012, Timminco Limited ("Timminco") (TSX:TIM) announced that, after consideration of the available alternatives, its Board of Directors has determined that it is in the best interests of the stakeholders of Timminco and its wholly-owned subsidiary, Becancour Silicon Inc. ("Becancour Silicon" and, together with Timminco, the "Company") for the Company to commence proceedings under the Companies' Creditors Arrangement Act (the "CCAA"). Please click here to view the entire press release.
Further updates will be provided as new information arises. Should you have any questions about this class action please contact Victoria Paris at (416) 596-1414 or vp@kimorr.ca