Litigation Involving the Merger
A putative class action lawsuit was filed in the District Court of the State of Nevada, Clark County, on September 21, 2012 by plaintiff David Raul against defendants Jason N. Ader, Curtis W. Anderson, Richard A.C. Coles, Michael B. Frankel, William E. Martin, Terrence L. Wright, Western Alliance and Western Liberty alleging, among other things, that Western Liberty’s board of directors breached its fiduciary duties in connection with the board of directors’ approval of the proposed merger and that Western Alliance aided and abetted such alleged breach of fiduciary duties. The plaintiff seeks injunctive relief preventing the merger, an order rescinding the proposed merger in the event it is not enjoined, and damages as a result of the alleged actions of the defendants, including attorneys’ and experts’ fees.
The defendants believe this lawsuit is without merit but in order to avoid the costs, risks and uncertainties inherent in litigation and to allow stockholders to vote on the proposal to adopt the merger agreement at the scheduled special meeting, Western Liberty, Western Alliance and the other defendants have entered into a memorandum of understanding with plaintiffs’ counsel in connection with the action, which we refer to as the memorandum of understanding, pursuant to which Western Liberty, Western Alliance, the other named defendants and the plaintiffs have agreed to settle the actions subject to court approval. If the Nevada court approves the settlement, the action will be dismissed with prejudice.
In the memorandum of understanding, Western Liberty and Western Alliance have agreed to provide certain additional information to the stockholders of Western Liberty through the transmission of this supplement to the proxy statement/prospectus. Without admitting in any way that the disclosures below are material or otherwise required by law, the proxy statement/prospectus is hereby supplemented with the following additional disclosures:
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