In Re Globe Specialty Metals, Inc. Stockholders Litigation

A distribution in the In re Globe Specialty Metals, Inc. Stockholders Litigation occurred on September 29, 2016.

If you are a broker, custodian, or Nominee, or you held shares for the beneficial interest of another, and you received an award, then, per order of the Court, you are to distribute those funds to the beneficial holders of Eligible Shares according to the instructions included with the award.

If you held Eligible Shares for your own account and you were not sent an award directly from the Settlement Administrator, then, as ordered by the Court, any award that you may be due may have been sent to your broker, custodian, or nominee, who is to allocate the award to the beneficial holders. If you are such a beneficial owner, please contact your broker for questions about any award you may be due.


Overview of the Litigation

On February 23, 2015, Globe Specialty Metals, Inc. (“Globe”) and Grupo FerroAtlántica, S.A.U. (“FerroAtlántica”)–a company which is wholly owned by Grupo Villar Mir, S.A.U. (“Grupo VM”)–announced they had entered into a definitive Business Combination Agreement, pursuant to which the two companies will combine in an all-stock transaction (the “Transaction”) under a new holding company named VeloNewco, which will be renamed Ferroglobe.

Following announcement of the Transaction, four class action complaints were filed in the Court of Chancery on behalf of Globe stockholders challenging the Transaction (the “Actions”). The Action alleged that defendants Jeff Bradley, Alan Kestenbaum, Stuart Eizenstat, Frank Lavin, Donald Barger, Jr., Alan Schriber, Bruce Crockett (collectively, the “Individual Defendants”) breached their fiduciary duties to Globe’s stockholders in connection with the Transaction because, among other things, they allegedly failed to engage in an adequate decision-making process as members of the Globe board of directors and their decision to recommend a stockholder vote in favor of the Transaction was unreasonable. The Actions also alleged that defendants Globe, Grupo VM, FerroAtlántica, Ferroglobe (now known as VeloNewco Limited (“VeloNewco”)), and Gordon Merger Sub, Inc. (“Merger Sub”) aided and abetted these purported breaches of fiduciary duty. The Actions sought, among other things, an order enjoining or rescinding the Transaction and damages.

On May 4, 2015, the Court of Chancery consolidated the Actions under the caption In Re Globe Specialty Metals, Inc. Stockholders Litigation, C.A. No. 10865-VCG (the “Litigation”), and appointed Prickett, Jones & Elliott, P.A., Kessler Topaz Meltzer & Check, LLP, Bernstein Litowitz Berger & Grossmann LLP, and Robbins Geller Rudman & Dowd LLP as co-lead counsel (collectively, “Lead Counsel”).

On June 15, 2015, Plaintiffs filed a consolidated amended complaint (the “Consolidated Complaint”) in the Litigation. The Consolidated Complaint named as defendants Globe, the Individual Defendants, FerroAtlántica, Grupo VM, Ferroglobe, and Merger Sub, and included claims for purported breaches of fiduciary duties by the Individual Defendants in connection with the Transaction.

Settlement of the Litigation

Plaintiffs City of Providence, International Union of Operating Engineers Local 478 Pension Fund, Edward Fraser, and Michael Cirillo (collectively, “Plaintiffs”), on behalf of themselves and the Settlement Class (defined below), have reached a settlement of the Litigation (the “Settlement”) that provides for a cash payment of $32.5 million (the “Cash Payment”) and various corporate benefits for the benefit of the Settlement Class, in addition to certain supplemental information provided to the Globe board of directors and stockholders prior to the Settlement as a consequence of the Litigation.

On February 10, 2016, the Settlement Hearing was held before the Court. On February 15, 2016, the Court entered the Final Order and Judgment Approving Class Action Settlement (the “Judgment”). The Judgment finally approved the Settlement, finally certified the Settlement Class for Settlement purposes only, and awarded attorneys’ fees and litigation expenses to Plaintiffs’ Counsel.

If you are a member of the Settlement Class, you may be eligible for a payment from the Settlement. The Settlement Class finally certified by the Court for Settlement purposes consists of:

All record and beneficial holders of common stock of Globe who held such stock at any time during the Class Period and who were allegedly damaged as a result of Defendants’ conduct alleged in the Consolidated Complaint, excluding the “Excluded Stockholders.” The “Excluded Stockholders” consist of the Defendants; subsidiaries and controlled affiliates of Globe; any corporations, limited liability companies, partnerships, trusts or other entities of which any Defendant is a primary beneficiary or in which any Defendant holds a material equity interest between the date hereof and the Effective Date of the Settlement; and the Immediate Family Members of any Individual Defendant (other than with respect to “Designated Family Member Shares” (defined below)).

Pursuant to the terms of the Settlement, the Cash Payment will be distributed on a pro rata basis to Eligible Class Members and to holders of the Designated Family Member Shares. “Eligible Class Members” are Class Members whose shares of Globe common stock are exchanged for shares of Ferroglobe common stock in the Transaction, which closed on or about December 23, 2015. “Designated Family Member Shares” are shares of Globe common stock that were owned and controlled by, or held for the benefit of, the Immediate Family Members of the Individual Defendants prior to the execution of the Business Combination Agreement, as identified on Exhibit D to the Stipulation.

Please note: Eligible Class Members do not need to submit a claim form in order to receive a payment from the Settlement. See ¶ 36 of the Settlement Notice for further discussion. If you are not an Eligible Class Members you will not receive a payment from the Settlement, regardless of whether you received a copy of the Settlement Notice.