China Integrated Settlement

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Brown v. China Integrated Energy, Inc., et al.,

Case No. CV 11-02559-BRO (PLAx)

UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

IF YOU PURCHASED OR ACQUIRED CHINA INTEGRATED ENERGY, INC. STOCK FROM MARCH 31, 2010 TO APRIL 21, 2011, YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTION SETTLEMENT.

A federal court authorized this Notice. This is not a solicitation from a lawyer. Your legal rights are affected whether or not you act. Please read this Notice carefully.

SUMMARY OF KEY PROVISIONS AND REASONS FOR SETTLEMENT

This Notice advises you of a proposed settlement consisting of $2.1 million in cash to resolve the class action lawsuit against Defendants China Integrated Energy, Inc. (“China Integrated” or the “Company”), Xincheng Gao, Gaihong Li, Junrong Guo, Albert C. Pu, Larry Goldman, and Christopher Wenbing Wang (collectively, “Defendants”). This Settlement is a final resolution of the claims brought on behalf of the Class against China Integrated and the other related defendants. This action was certified by the Court on February 17, 2015, to proceed as a class action on behalf of the Class of certain purchaser and acquirors of China Integrated common stock.

This settlement is separate from the previously announced partial settlement of this action with Defendant Sherb & Co. LLP (“Sherb”), the outside auditor of China Integrated during the relevant period. If you already have submitted a claim form in connection with the Sherb settlement, you do not need to file another Proof of Claim Form. Instead, you must complete and submit the Release Form (included with this Notice, or available at the website below).

Security and Time Period: China Integrated Energy, Inc. (stock symbol: CBEH) securities purchased or acquired from March 31, 2010 to April 21, 2011, inclusive (“Settlement Class Period”).

Settlement Fund: $2.1 million in cash, plus any interest earned. Your recovery will depend on the number of shares of China Integrated stock purchased during the Settlement Class Period, and the timing of your purchases and any sales. It will also depend on the number of valid claim forms that members of the Class submit and the amount of such claims. Based on the information currently available to Plaintiffs and the analysis performed by their damages consultants, it is estimated that if Class Members submit claims for 100% of the shares eligible for distribution under the Plan of Allocation (described below), the estimated average distribution per share of common stock will be approximately $0.08 per share before deduction of Court-approved fees and expenses, including the cost of notifying Members of the Settlement Class and settlement administration and any attorneys’ expenses awarded by the Court to counsel for the Plaintiffs. Historically, actual claims rates are less than 100%, which result in higher distributions per share. A Settlement Class Member’s actual recovery will be a pro rata share of the Net Settlement Fund determined by that claimant’s recognized claim as compared to the total recognized claims of all Settlement Class Members who submit valid Proof of Claim and Release forms (“Proofs of Claim”).

Reasons for Settlement: This case has been litigated since March 2011. The Settlement provides the Settlement Class with a benefit now, in lieu of engaging in years of further litigation – including summary judgment motions, a contested trial and likely appeals – with the risk of no recovery at all, after years of continued litigation.


Important Documents


    Settlement Notice

Proof of Claim & Release

Release Form

Stipulation & Agreement of Settlement

Preliminary Approval Order


Important Dates


May 27, 2016 - Request for Exclusion from the Settlement Class must be mailed to Angeion as specified in the Notice, and postmarked by this date.

June 1, 2016 - Claim Form must be mailed to the administrator and postmarked by this date.

June 20, 2016 - Objection Letter must be mailed to the Court and Class Counsel as specified in the Notice, and received by this date.

July 11, 2016 at 1:30 PM - Fairness Hearing. 


Banks, Brokers and Institutions Only

Step 1: Download the instructions and file layout HERE. Save it as an excel spreadsheet.

Brokers Only - Request Notices for your Clients

The Court has ordered that if you hold or held any China Integrated stock purchased or acquired between March 31, 2010 and April 21, 2011, inclusive, as nominee for a beneficial owner, then, within ten (10) days after you receive this Notice, you must either: (1) send a copy of this Notice by first class mail to all such Persons; or (2) provide a list of the names and addresses of such Persons to the Claims Administrator (send email to ChinaIntegrated@AngeionGroup.com or see Answer to Question 24 for additional contact information).

If you choose to mail the Notice and Claim Form yourself, you may obtain from the Claims Administrator (without cost to you) as many additional copies of these documents as you will need to complete the mailing. If you do not intend to comply with the provision of this section you are requested to notify the Claims Administrator of that fact.

Regardless of whether you choose to complete the mailing yourself or elect to have the mailing performed for you, you may obtain reimbursement for reasonable administrative costs actually incurred in connection with forwarding the Notice and which would not have been incurred but for the obligation to forward the Notice, upon submission of appropriate documentation to the Claims Administrator.



If the Case Had Not Settled: The Settlement must be compared to the risk of no recovery after contested motions, trial and likely appeals. A trial is a risky proposition, and Plaintiffs would not necessarily have prevailed. The claims in this case involve numerous complex legal and factual issues, many of which would require expert testimony. Among the many key issues about which the two sides do not agree are: (1) whether Defendants violated the securities laws or otherwise engaged in any wrongdoing; (2) whether the facts alleged by Plaintiffs were material, false, misleading or otherwise actionable under the securities laws; (3) whether the various facts alleged by Plaintiffs influenced the trading prices of China Integrated stock during the relevant period; (4) the method for determining whether the price of China Integrated stock was artificially inflated during the relevant period; (5) the amount (if any) of such inflation; and (6) the amount of damages (if any) that could be recovered at trial.

Attorneys’ Fees and Expenses: The Court-appointed Lead Counsel have not yet received any payment for their work incurred in investigating the facts, conducting this litigation and negotiating the Settlement on behalf of the Plaintiffs and the Class. The Court has only reimbursed Lead Counsel in the amount of $100,000 for incurred and paid legal expenses from the Sherb settlement. Lead Counsel intends to apply for an award of attorneys’ fees not to exceed 25% of the total settlement funds, and reimbursement of additional expenses in the amount not to exceed $375,000. The request for litigation expenses may include a request for reimbursement of the costs and expenses of Plaintiffs in accordance with 15 U.S.C. § 78u-4(a)(4) and incentive award up to $10,000 each for representing the Settlement Class. If the above amount is requested and approved by the Court, the estimated average cost per eligible share of common stock will be approximately $.03 per share, if claims are submitted for 100% of the eligible shares of China Integrated common stock.

Dismissal and Releases: If the proposed Settlement is approved, the Court will enter a Judgment and Order of Dismissal with Prejudice as to Defendant Sherb (the “Judgment”). The Judgment will dismiss the Released Claims (as defined in the Stipulation of Settlement) with prejudice as to the Released Persons, which include Sherb and its Related Parties. The Judgment will provide that all Class Members shall be deemed to have released and forever discharged all Released Claims against Defendants.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT
Submit a Claim

The only way to receive a payment.

Exclude Yourself

Get no payment. This is the only option that allows you to participate in another lawsuit against the Defendants relating to the class claims being released in this case.

Object

Write to the Court about why you don’t like the Settlement.

Go to a Hearing

Ask to speak in Court about the fairness of the Settlement.

Do Nothing

Get no payment. Give up rights.


These rights and options – and the deadlines to exercise them – are explained in the Notice.

The Court presiding over this case must decide whether to approve the Settlement. Payments will be made only if the Court approves the Settlement and the time for any appeals has lapsed, or, if there are any appeals, after the appeals are resolved. Please be patient.

FOR MORE INFORMATION PLEASE CONTACT THE SETTLEMENT ADMINISTRATOR AT 877-300-3441 or email  chinaintegrated@angeiongroup.com. PLEASE DO NOT CONTACT THE COURT.