Aircastle LTD 10-Q

ITEM 1. LEGAL PROCEEDINGS As of the date hereof, Aircastle is aware of seven lawsuits that have been filed by purported Aircastle shareholders against Aircastle and its directors and certain of its officers, challenging the Merger. On December 18, 2019, a purported shareholder of Aircastle filed a lawsuit against Aircastle and its directors and certain of its officers in the United States District Court for the Southern District of New York, captioned David Younge v. Aircastle Limited, et al., Case No. 1:19-cv-11574 (the “Younge Action”). Also on December 18, 2019, a purported shareholder of Aircastle filed a putative class action lawsuit against Aircastle and its directors in the United States District Court for the District of Delaware, captioned Jordan Rosenblatt v. Aircastle Limited, et al., Case No. 1:19-cv-02295 (the “Rosenblatt Action”). On January 3, 2020, a purported shareholder of Aircastle filed a lawsuit against Aircastle and its directors in the United States District Court for the District of Connecticut, captioned Ruda Anderson v. Aircastle Limited, et al., Case No. 3:20-cv-00017 (the “Anderson Action”). On January 21, 2020, a purported shareholder of Aircastle filed a lawsuit against Aircastle and its directors in the United States District Court for the Eastern District of New York, captioned Sherie Johnson v. Aircastle Limited, et al., Case No. 1:20-cv-00334 (the “Johnson Action”). On January 28, 2020, a purported shareholder of Aircastle filed a lawsuit against Aircastle and its directors in the United States District Court for the Southern District of New York, captioned Howard Shoemaker v. Aircastle Limited, et al., Case No. 1:20-cv-00746 (the “Shoemaker Action”). On February 14, 2020, a purported shareholder of Aircastle filed a lawsuit against Aircastle and its directors in the United States District Court for the Southern District of New York, captioned Marc Podems v. Aircastle Limited, et al. , 1:20-cv-01319 (the “Podems Action”). These six complaints are collectively referred to as the Federal Actions. The Federal Actions allege that, among other things, the defendants violated Sections 14(a) and 20(a) of the Exchange Act and Exchange Act Rule 14d- 9 by omitting or misrepresenting certain allegedly material information in the proxy statement. The Federal Actions seek, among other things: (i) injunctive relief preventing the consummation of the proposed transaction; (ii) rescissory damages or rescission in the event the proposed transaction is consummated; and (iii) plaintiffs’ attorneys’ and experts’ fees. On January 2, 2020, a purported shareholder of Aircastle filed a putative class action lawsuit against Aircastle and its directors in the Superior Court of Connecticut, Judicial District of Stamford-Norwalk, captioned Daniel Hotop v. Aircastle Limited, et al., Case No. FST-CV20-6045115 (the “Hotop Action”). The Hotop Action alleges that the directors breached their fiduciary duties by: (i) entering into the proposed transaction through a flawed process; (ii) accepting an unfair price; and (iii) filing a materially deficient proxy statement. The Hotop Action seeks, among other things: (a) injunctive relief preventing the consummation of the proposed transaction; (b) rescissory damages or rescission in the event the proposed transaction is consummated; (c) declaratory relief that the Merger Agreement is unenforceable; (d) a judgment directing Aircastle to commence a new sale process; (e) damages; and (f) plaintiff’s attorneys’ and experts’ fees. The complaint in the Hotop Action was voluntarily withdrawn on April 29, 2020. All of the Federal Actions have been voluntarily dismissed. The complaint in the Younge Action was voluntarily dismissed on February 26, 2020. The complaint in the Rosenblatt Action was voluntarily dismissed on March 24, 2020. The complaint in the Anderson Action was voluntarily dismissed on March 9, 2020. The complaint in the Johnson Action was voluntarily dismissed on April 1, 2020. The complaint in the Podems Action was voluntarily dismissed on May 8, 2020. The complaint in the Shoemaker Action was voluntarily dismissed on May 12, 2020. Other potential plaintiffs may also file additional lawsuits challenging the Merger. The outcome of the Shoemaker Action and any additional future litigation is uncertain. Such litigation, if not resolved, could result in substantial costs to the Company, including any costs associated with the indemnification of directors and officers. The defense or settlement of any lawsuit or claim in connection with the Merger may adversely affect the Company’s business, financial condition, results of operations and cash flows.