Hanna LLP, as special independent advisor, and by Simpson Thacher &
Bartlett LLP, as legal counsel.
The Special Committee completed an extensive review of perquisites and
payments made by the Company to or on behalf of Miles Nadal and Nadal
Management Limited during the six-year period from 2009 through 2014.
The review included a detailed analysis of the available back-up documentation supporting such payments, as well as consideration of the Management
Services Agreement among Mr. Nadal, Nadal Management Limited and the
Company and certain historical practices. These payments included, among
other things, travel and commutation expenses, charitable donations, medical
expenses, and certain expenses for which the information was incomplete.
Mr. Nadal cooperated fully with the review. Following the review, Mr. Nadal
agreed to reimburse the Company for perquisites and payments for which the
Company sought reimbursement, in the aggregate amount of $8.6 million.
The Company does not expect there will be any impact to its previously
issued financial statements as a result of the review.
 As a result of the internal investigation, the company’s
special committee recommended, and MDC’s audit committee
adopted, a series of remediation procedures to strengthen MDC’s
ICFR related to travel, entertainment and related expenses, including hiring two new senior executives; a senior vice president,
internal controls and compliance and a director, compliance & risk
 Mr. Paniccia submits that the April 27, 2015 statement
was a partial corrective disclosure.
 On April 28, 2015, MDC’s shares dropped in value to
$24.20 on the TSX and to $20.20 on the NASDAQ, reflecting
a price reduction of 28 per cent on both exchanges.
 During the period between the first statement on October
29, 2014 through to April 27, 2015, Mr. Nadal donated 30,000
MDC shares to a charity. He did not otherwise dispose of shares
during this period. During this period, Mr. Doft donated 3,000
shares to a charity. He did not otherwise dispose of his shares
during this period.
 On July 20, 2015, Messrs. Nadal and Sabatino resigned.
In resigning, Mr. Nadal repaid MDC US$1.88 million in reimbursed expenses, US$10.58 million in bonuses, and he forfeited
severance payments valued at US$27.2 million. Mr. Sabatino
repaid US$218,583 in bonuses, and he forfeited a severance
 In July 2015, in the U.S., the North Collier Fire Control
and Rescue District Firefighter Pension Plan (“pension plan”)
sued MDC, Mr. Nadal, Mr. Sabatino and Mr. Doft for misrepresentation in the secondary market, i.e., on NASDAQ. Mr. Paniccia
was a putative class member of this proposed U.S. class action.