***IMPORTANT CASE UPDATE***

On December 5, 2022, residual distribution checks were mailed to Authorized Claimants who cashed their initial payment and were eligible to receive an additional payment under the Plan of Allocation. Please address any questions regarding your payment to the Claims Administrator.

If you are a Class Member, your legal rights will be affected by this Settlement whether you act or do not act.

Please read the Notice carefully

IF YOU PURCHASED OR OTHERWISE ACQUIRED COMMON STOCK OF FIFTH STREET FINANCE CORP. (“FSC”) DURING THE PERIOD FROM JULY 7, 2014 THROUGH FEBRUARY 6, 2015, AND WERE DAMAGED THERBY, YOU MAY BE ENTITLED TO A PAYMENT FROM A CLASS ACTION SETTLEMENT.

The Fairness Hearing

The Court held a final Fairness Hearing on February 16, 2017, and approved the Settlement, proposed Plan of Allocation and the motion requesting attorneys' fees and expenses. A copy of the order can be accessed on the Court Documents section.

What is this case about?

FSC is a publicly traded Connecticut-based business-development company. Starting in October 2015, three class actions were filed by purchasers of FSC common stock alleging violations of the federal securities laws.  On February 1, 2016, the Court appointed the Lead Plaintiff and Lead Counsel.

On April 1, 2016, Lead Plaintiff filed an amended complaint (the “Complaint”) asserting claims under the Securities Exchange Act of 1934.  The Complaint contends that, during the Class Period, Defendants made materially false statements and/or omitted material facts about FSC’s financial condition.  Plaintiff alleges that Defendants engaged in a scheme to inflate FSC’s assets and investment income in order to increase the revenue of FSC’s investment adviser, Fifth Street Asset Management Inc. (“FSAM”), before FSAM’s initial public offering at the end of October 2014.  After that offering, FSC wrote down the value of certain assets, suspended its dividend for February 2015, and reduced its future dividends.  The Complaint contends that these alleged misstatements and omissions inflated the price of FSC’s common stock during the Class Period.

Defendants moved to dismiss the Complaint on May 31, 2016.  The parties then engaged in settlement discussions – with the assistance of a mediator (a retired California Superior Court Judge) – and were able to reach the proposed Settlement described here.

The Settlement Benefits

The Settlement provides $14,050,000 in cash for the benefit of the Class. The Settlement Amount and any interest it earns constitute the “Settlement Fund.”  The “Net Settlement Fund” is the Settlement Fund after deduction of Court-approved attorneys’ fees and litigation expenses, Notice and Administrative Expenses, Tax Expenses, and any other fees or expenses approved by the Court.  The Net Settlement Fund will be distributed to Authorized Claimants – i.e., members of the Class who timely submit valid Claim Forms that show Recognized Claims pursuant to the Plan of Allocation and are approved by the Court.

The Net Settlement Fund will not be distributed unless and until the Court has approved the proposed Settlement and the Plan of Allocation (or some other allocation plan) and the Court’s approval becomes “final” (meaning that the time to appeal the Order granting approval has expired, or, if the Order is appealed, that the appeal is decided without causing a material change in the Order or that the Order is upheld on appeal and is no longer subject to any further type of appellate review).  The Plan of Allocation is separate from the Settlement, so any decision by the Court concerning the Plan of Allocation will not affect the validity or finality of the Settlement.  The Court may approve the Plan of Allocation with or without modifications agreed to among the parties, or another plan of allocation, without further notice to Class Members.

Further Information:

This website and the Notice summarizes the Settlement.  For more details regarding the Settlement please reference the Settlement Agreement, or other documents filed in the case under the “Court Documents” link on the left.  You may also contact the Claims Administrator or Lead Counsel for further information regarding this Settlement:

Claims Administrator:

FSC Securities Settlement
c/o A.B. Data, Ltd.
PO Box 173025
Milwaukee, WI  53217
866-217-4461

Lead Counsel for the Class:

Joel H. Bernstein, Esq.
140 Broadway
New York, NY 10005
1-888-219-6877
settlementquestions@labaton.com
www.labaton.com

If you have questions, you may call the In Re Fifth Street Finance Corp. Help Line at 866-217-4461 or email info@FSCSecuritiesSettlement.com.