Settlement proposed to dismiss class action against Redline Communications

A proposed settlement has been reached to resolve a class action lawsuit against Redline Communications Group Inc. (TSX:RDL). The lawsuit was filed in September 2010 against RDL, KPMG LLP and certain officers and directors of RDL in an Ontario Superior Court. The plaintiffs allege that the defendants misrepresented RDL's financial results to shareholders. Under the proposed settlement, the defendants will pay $3.6 million to the plaintiffs in return for a dismissal of the class action. The settlement must be approved by the court before it can be implemented at a hearing set for Nov. 21 in London, Ont. RDL designs, makes and sells broadband wireless products that connect individuals and businesses to the Internet and transport network traffic. In January, the company slashed its workforce by 10 per cent after revising its revenue targets. In March, company shares plummeted 36 per cent after it said it would likely miss the deadline for its quarterly and full-year financial statements as it reviewed its revenue recognition accounting policies.