Former OCZ Technology committee objects to class action settlement

By Kali Hays

New York, March 11 - The official committee of unsecured creditors for ZCO Liquidating Corp., formerly known as OCZ Technology Group, Inc., objected to the company's motion for approval of a class action securities litigation settlement, according to a March 10 filing with the U.S. Bankruptcy Court for the District of Delaware.

Specifically, the committee said that the proposed $7.5 million settlement is "inappropriate," as the committee has had "neither adequate time nor resources to conduct a fulsome investigation of the facts and circumstances surrounding these companion litigations and the propriety of the settlements," the filing stated.

The committee also cited the fact that the company's bankruptcy sales did not provide enough to satisfy the shareholder claims or provide for a distribution to unsecured creditors. The committee said the settlement would "deplete, for the sole benefit of the shareholders, the debtors' limited directors and officers insurance policies - one of the few remaining sources of potential recovery for creditors."

As previously reported, OCZ shareholders filed nine class action complaints in October 2013 alleging violations of the Securities Exchange Act of 1934 by OCZ and two officers/directors.

OCZ, a Sunnyvale, Calif.-based producer of computer memory and components, filed for bankruptcy on Dec. 2. The Chapter 11 case number is 13-13126.

© 2015 Prospect News.
All content on this website is protected by copyright law in the U.S. and elsewhere. For the use of the person downloading only.
Redistribution and copying are prohibited by law without written permission in advance from Prospect News.
Redistribution or copying includes e-mailing, printing multiple copies or any other form of reproduction.