Legal Claims Settled

Legal Claims Settled

AUCKLAND, 22 March 2001 – The legal proceedings sought by Fletcher Challenge Limited (now Fletcher Challenge Forests Limited) against Mr Paul Hyslop and others have been settled.

The proceedings arose out of an inadvertent release by Fletcher Challenge in April 1999 of a draft announcement of a proposed merger of Fletcher Challenge Paper and Fletcher Challenge Canada.

The defendants denied liability for the claim, but agreed to settle the proceedings by making an ex gratia payment to Fletcher Challenge of $75,000. Under this settlement the defendants have accounted for all of the profits made on the transactions and made a contribution towards Fletcher Challenge’s costs.

The High Court has made directions confirming the parties’ proposal that half of the settlement amount will be held in trust for six months from 22 February 2002, the date of the settlement agreement. These funds will be available for distribution to any former Fletcher Challenge Paper shareholders who can satisfy the Court that they have a claim in respect of the share transactions involved in the proceedings.

All parties are pleased that this matter has been resolved.

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