Deep Marine Technology ("DMT") of Houston, Texas, and its parent company, Deep Marine Holdings ("DMH"), have concluded an extensive, eight month long investigation into the allegations described in a shareholder demand letter and in two lawsuits, one brought by minority shareholders who presented the original demand letter and one brought by the former CEO of DMT and DMH. The two lawsuits and the demand letter contained virtually identical allegations.
The investigation included the appointment of a Special Litigation Committee of the Boards of DMT and DMH, and the retention of independent outside counsel to study the allegations, to examine witnesses (24 witnesses were interviewed, including some under oath), and to review many thousands of pages of documents. During the exhaustive process, the Special Litigation Committee met on several occasions to review progress, and has now received and reviewed the report of its independent counsel.
After carefully considering the findings of that report and deliberating as to the merits of the allegations in the demand letter and the two lawsuits, the Special Litigation Committee has determined that all of the allegations regarding the Company as set forth in the Demand Letter dated October 10, 2009 sent by FLI Deep Marine LLC and others, the Complaint filed by FLI and Bressner Partners Ltd. in the Chancery Court of Delaware in Civil Action No. 4138-VCN, and the First Amended Petition filed by Paul McKim in Harris County, Texas in Cause No. 2008-64385, are without merit. The Special Litigation Committee further concluded that there is no evidence to support any of the allegations that, with the exception of Paul McKim, the former CEO of DMT and DMH, either the Company or any of its current and former officers, directors or major shareholders engaged in waste, fraud, gross mismanagement or made improper payments, directly or indirectly, to an elected official or family member.
As a result of the investigation and the committee's determination, the Company declines to bring or take up a lawsuit against its current or former officers, directors, and major shareholders based upon those allegations. One of the lawsuits, originally brought before the Chancery Court in Delaware, has already been dismissed, and the Company will be promptly moving to dismiss each of the causes of action in the remaining Texas litigation brought against it by Paul McKim.
The Company reserves its right to file a lawsuit or counterclaims against Paul McKim for his conduct while employed at the Company as an officer and director and for the actions he has taken since his departure from the Company.