Host America Corporation (OTC BB:CAFE) has been granted preliminary approval of a settlement of a class action lawsuit against Host America and certain of its past and present directors and officers, which was pending in United States District Court for the District of Connecticut as In re Host America Corp. Securities Litigation, Case No. 3:05-cv-01250 (VLB). The suit arose out of allegations stemming from a press release issued by the Company on July 12, 2005.
The settlement, previously disclosed in Host America's current report on Form 8-K on June 19, 2007, provides for the dismissal of all claims against the Host America's defendants with prejudice. In exchange, Host America has agreed to pay the Class $2,450,000, of which $1,700,000 will be funded by defendants' insurer. The settlement remains subject to additional requirements, including notice to Class members and final approval by the Court. A hearing on final approval of the settlement is scheduled for January 28, 2008. There can be no assurance that the settlement will become final. The parties' request for preliminary approval of a related shareholders derivative suit remains pending in the Federal District Court.
The Company and the other Host America defendants have steadfastly maintained that the claims raised in the class action and derivative litigation are without merit, and have vigorously contested those claims. As part of the settlement, the Host America defendants continue to deny any liability or wrongdoing.
"Host America is focused on the future and it is important that we put this unfortunate chapter behind us so we can concentrate on our continuing prospects for growth," said David J. Murphy, President and Chief Executive Officer of Host America. "We have agreed to settle this lawsuit so that we may move forward focusing on our core energy management business. This settlement is a milestone in that direction."
About Host America Corporation
Host America Corporation, through its subsidiaries, provides energy management conservation products and services and food service management in the United States. Its main focus is energy conservation, which includes a proprietary digital microprocessor for reducing energy consumption on lighting systems, and the installation and design of electrical systems, energy management systems, telecommunication networks, control panels, lighting systems, and alarm systems. Host America was founded in 1986, and is based in Hamden, Connecticut.
Forward Looking Statements
All information in this news release consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The statements contained in this release, which are not historical facts and that relate to future plans or projected results of Host and its subsidiaries, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, These forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected, anticipated or implied. These risks and uncertainties can include the risks associated with Host's entry into new commercial food and/or energy markets that require the company to develop demand for its products, its ability to access the capital markets, litigation, regulatory investigations and many other risks described in Host's Securities and Exchange Commission filings. The most significant of these uncertainties are described in Host America's 2007 Annual Report on Form 10-K all of which any reader of this release is encouraged to study (including all amendments to those reports) and exhibits to those reports, and include (but are not limited to) the following: the costs, difficulties, and uncertainties related to the implementation of the early stage energy management division, organizational changes and the integration of acquired businesses; the potential loss of one or more key customer or supplier relationships or changes to the terms of those relationships; difficulties and uncertainties related to transitions in senior management; the results, consequences, effects or timing of any inquiry or investigation by or settlement discussions with any regulatory authority or any legal and administrative proceedings; the impact of previously announced restatements; difficulties or delays or increased costs in implementing Host America's overall prospective business plan; and general economic and market conditions. Host America undertakes no obligation to update or revise any forward-looking statement. Readers of this release are cautioned not to put undue reliance on forward-looking statements.
