Welcome to the Settlement
CNL Hotels & Resorts, Inc. Securities Litigation
You may be affected if you meet the following
All persons who purchased or otherwise acquired
any securities of CNL Hotels & Resorts, inc. (f/k/a CNL Hospitality
Properties, Inc.) ("CHR") pursuant to or by means of CHR's offerings,
registration statements, and/or prospectuses between August 16, 2001 and August
16, 2004, inclusive ("Class Period") ("Purchaser Class");
And / or
All persons who were CHR stockholders entitled to
vote on the proposals presented in CHR's proxy statement dated June 21, 2004
PLEASE NOTE: The distribution of the Net
Settlement Consideration to place on June 18, 2010.
July 26, 2006
|| Filed and Served on or before
July 12, 2006
|Request for Exclusion:
Postmarked and mailed no later than July 12, 2006
|Investment Data Form:
||Postmarked and mailed no later than November 3, 2006
|Proof of Claim Form:
||Postmarked and mailed no later than November 3, 2006
1. The Proxy Class claims are proposed to be
settled by (a) CHR's entering into an Amended Merger Agreement, subject to
shareholder approval, which significantly reduces the amount that CHR will pay
to acquire its Advisor, CNL Hospitality Corp., compared to the Original Merger
Agreement approved by CHR stockholders pursuant to the June 2004 Proxy; (b)
CHR's entering into certain Advisor Fee Reduction Agreements, which
significantly reduces certain historic, current, and future advisory fees that
CHR pays its Advisor before the Merger; and (c) the adoption of certain
corporate governance provisions by the CHR Board of Directors. Those Settling
Defendants who were directors of CHR during the negotiation and execution of
the Amended Merger Agreement and the Advisor Fee Reduction Agreements (the "New
Agreements") have acknowledged that this Action was among the material factors
taken into account in connection with the terms of the New Agreements. It is
Plaintiffs' position that the net amount that CHR will pay in merger
consideration and for advisory fees as a result of the New Agreements will be
approximately $200,000,000 less than CHR would have paid under the terms
of the Original Merger Agreement and the prior advisory fee structure had the
Original Merger Agreement become effective on a timely basis.
2. The Purchaser Class claims are proposed to
be settled by Settling Defendants' payment of $35,000,000, payable in
three annual installments (January 2007 to January 2009). These monies, after
payment of fees and expenses, will be distributed pursuant to a Plan of
Allocation to all eligible members of the Purchaser Class.
The Settlement will resolve all claims, including known and unknown claims that
could have been alleged in the Action through the date when Judgment is entered
dismissing the Action with prejudice, of Named Plaintiffs and the Proxy Class
and the Purchaser Class against all present and former Defendants and their
affiliates, including CNL Hotels & Resorts, Inc. (f/k/a CNL Hospitality
Properties, Inc.) ("CHR"), CNL Securities Corp. ("CSC"), CNL Hospitality Corp.
(the "Advisor"), James M. Seneff, Jr., Robert A. Bourne, Thomas J. Hutchison
III, John A. Griswold, Charles E. Adams, Lawrence A. Dustin, Craig M.
McAllaster, and Robert E. Parsons, Jr. ("Settling Defendants"). A hearing will
be held on July 26, 2006, at 1:00 p.m., before the Honorable Hon. Gregory A.
Presnell at the United States District Court for the Middle District of Florida
("Court"), Courtroom No. 3, George C. Young U.S. Courthouse and Federal Bldg.,
80 N. Hughey Avenue, Orlando, FL 32801 ("Final Settlement Hearing") to
determine whether the proposed Settlement and Plan of Allocation should be
approved by the Court as fair, reasonable, and adequate, and to consider the
application of Plaintiffs' Counsel for attorneys' fees and reimbursement of
IF YOU ARE A MEMBER OF THE CLASSES DESCRIBED ABOVE AND MORE FULLY IN THE NOTICE
OF PENDENCY AND PROPOSED SETTLEMENT OF CLASS ACTION (the "Class Notice" -
please see the link at the right), YOUR RIGHTS WILL BE AFFECTED BY THE
SETTLEMENT. IF YOU ARE A MEMBER OF THE PURCHASER CLASS YOU MAY BE ENTITLED TO
SHARE IN THE NET SETTLEMENT CONSIDERATION.
You may also contact the Claims Administrator at 877-318-6652 or in writing at In
re CNL Hotels & Resorts, Inc. Securities Litigation, c/o Rust Consulting,
Inc., Claims Administrator, P.O. Box 24706, West Palm Beach, FL 33416.
Please note that changes of address must be made in writing to the above
If you are a member of the Purchaser Class you will be receiving an Investment
Data Form ("IDF") and a Proof of Claim in addition to your Notice. If the
information on the IDF is correct, you will need to do nothing in order to
share in the Settlement consideration. Depending on how, and on what date, you
acquired and/or disposed of your shares of CHR stock, you may be required to
submit a Proof of Claim in order to be eligible to share in Settlement
consideration. Time to file or submit any changes to the IDF and/or the Proof
of Claim, has passed. You will be bound by any judgment entered in the Action
whether or not you make a claim.
IF YOU DESIRE TO BE EXCLUDED FROM THE PURCHASER CLASS, you must have filed a
Request for Exclusion by July 12 2006. The time to filed an exclusion has
ANY OBJECTION TO THE PROPOSED SETTLEMENT, Plan of Allocation or application for
attorneys' fees and reimbursement of litigation expenses must have been filed
no later than July 12, 2006 and has now passed.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING
INQUIRIES MAY BE MADE TO:
For questions regarding your distribution please contact:
Write to: In re CNL Hotels & Resorts, Inc. Securities Litigation
Complete Claim Solutions, Inc.
Palm Beach, Florida 33416
Call (877) 318-6652, toll-free.
Write to one of Co-Lead Counsel at one of these addresses:
Nicholas E. Chimicles, Esq.,CHIMICLES & TIKELLIS LLP,
361 West Lancaster Avenue, Haverford, PA 19041
Lawrence A. Sucharow, Esq.,
LABATON SUCHAROW & RUDOFF LLP,
100 Park Avenue, New York, NY 10017,
Lawrence P. Kolker, Esq., WOLF HALDENSTEIN ADLER
FREEMAN & HERZ LLP,
270 Madison Avenue, New York, NY 10016
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