Steel Connect, Inc. Resolves Class and Derivative Action, Approves Settlement Distribution

Steel Connect, Inc. recently announced developments following the approval of a Settlement in a class and derivative action. The company, registered as Steel Connect, Inc. (NASDAQ: STCN), was involved in a legal matter styled Reith v. Lichtenstein, et al., 2018-0277-MTZ (Del. Ch.), where plaintiff Donald Reith brought claims against certain directors and stockholders. On December 13, 2024, the Court approved the Settlement, allowing for the resolution of the Reith Litigation.

As part of the Settlement, defendants are obliged to ensure their directors’ and officers’ insurance carriers pay $6,000,000 to Steel Connect. Upon distribution of the Reith Net Litigation Proceeds to the common stockholders, excluding certain waived shares, each shareholder anticipates receiving around $1.15 per share held.

The Settlement also mandates certain amendments to the Stockholders’ Agreement and corporate governance policies, including enhancing board committee independence and related party transaction reviews. The Stockholders’ Agreement is set to terminate upon the conclusion of a Short-Form Merger if initiated by Steel Partners.

In the event of the Short-Form Merger, a Contingent Value Rights Agreement (CVR Agreement) will be established for holders of Common Stock, granting them a contingent value right known as a Reith CVR. These Reith CVRs, not being transferable, signify a contractual right to potential Reith Net Litigation Proceeds.

Forward-Looking Statements in the Current Report on Form 8-K highlight uncertainties related to the distribution process and the impact of the Short-Form Merger, emphasizing the importance of annual reports and future filings.

The company’s commitment to transparent reporting is evident in the required financial statement exhibits and adherence to SEC regulations. Ryan O’Herrin, the Chief Financial Officer of Steel Connect, signed off on the report on December 16, 2024.

Please note that the above details are derived from the 8-K SEC Filing submitted by Steel Connect, Inc and are intended for informational purposes only. Investors are advised to stay updated with official news releases and regulatory filings.

This article was generated by an automated content engine and was reviewed by a human editor prior to publication. For additional information, read Steel Connect’s 8K filing here.

Steel Connect Company Profile

Steel Connect, Inc, together with its subsidiaries, provides supply chain services in the United States, Mainland China, Netherlands, and internationally. It offers product configuration and packaging, kitting, and assembly of components and parts into finished goods; and value-added processes, such as product testing, radio frequency identification tagging, product or service activation, language settings, personalization and engraving, multi-channel packaging, and packaging design services.