UNITED STATES OF AMERICA

Before the

SECURITIES AND EXCHANGE COMMISSION

ADMINISTRATIVE PROCEEDING 

File No. 3-20163

In the Matter of

Covia Holdings Corp. and 

Fairmount Santrol Holdings Inc. 

now known as Bison Merger Sub I, 

LLC,

Respondents.

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PLAN OF DISTRIBUTION

I. OVERVIEW

1. The Division of Enforcement submitted the Plan of Distribution (the “Plan”) to the 

United States Securities and Exchange Commission (the “Commission”) pursuant to Rule 1101 of 

the Commission’s Rules on Fair Fund and Disgorgement Plans (the “Commission’s Rules”), 17 

C.F.R. § 201.1101. As described more specifically below, the Plan provides for the distribution of a 

Fair Fund (the “Fair Fund”), comprised of civil money penalties paid by Covia Holdings Corp. 

(“Covia”) and Fairmount Santrol Holdings, Inc., now known as Bison Merger Sub I, LLC

(“Fairmount”) (collectively, “Respondents”) in the above-captioned matter1to investors who were 

harmed in connection with false and misleading statements by Respondents regarding the 

performance of high-margin proppant products the Respondents were developing and selling, 

pursuant to the Plan of Allocation (attached as Exhibit A).

2. In the view of the Commission staff and the Fund Administrator, this methodology 

constitutes a fair and reasonable allocation of the Fair Fund. 

3. The Commission has custody of the Fair Fund and shall retain control of the assets of 

the Fair Fund. The Plan has been approved by the Commission, and the Commission retains 

jurisdiction over its implementation.

 

1

 See Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8A of the Securities Act of 1933 and Section 

21C of the Securities Exchange Act of 1934, Making Findings, and Imposing a Cease-and-Desist Order, Securities Act 

Rel. No. 10897 (Dec. 8, 2020) (the “Order”).
2

II. BACKGROUND

4. On December 8, 2020, the Commission issued the Order instituting and 

simultaneously settling cease-and-desist proceedings against the Respondents. In the Order, the 

Commission found that from at least October 2014 to March 2018, Fairmount, a provider of sandbased products used by oil and gas exploration and production companies for fracking, misled investors 

by overstating the performance and commercial potential of high-margin proppant products it was 

developing and selling. Specifically, the Commission found that Fairmount’s materially false and 

misleading statements about these products appeared in offering documents in connection with its 2014 

initial public offering and two subsequent offerings in 2016; in annual, quarterly, and current reports 

filed with the Commission; in presentations to investors and analysts; and on the company’s website. 

At the end of June 2020, Covia, and its U.S. subsidiaries, including Fairmount, filed voluntary 

petitions for Chapter 11 bankruptcy reorganization.

5. In the Order, the Commission ordered the Respondents to pay, jointly and severally, a 

civil penalty of $17 million, which was deemed satisfied by a cash payment from Covia in the amount 

of $1 million pursuant to Covia Holdings Corporation and its Debtor Affiliates’ confirmed Chapter 11 

plan or an order of the bankruptcy court allowing such claim and authorizing such payment. The 

Commission also established the Fair Fund, pursuant to Section 308(a) of Sarbanes-Oxley Act of 

2002, so the penalty paid can be distributed to investors harmed by the Respondents’ conduct 

described in the Order.

6. The Respondents have paid in full. The Fair Fund has been deposited at the United 

States Department of the Treasury’s Bureau of the Fiscal Service (“BFS”) for investment. Other 

than potential interest income from the BFS investment, the Commission does not anticipate that the 

Fair Fund will receive additional funds. 

III. DEFINITIONS

As used in this Plan, the following definitions will apply:

7. “Administrative Costs” shall mean any administrative costs and expenses, 

including, without limitation, the fees and expenses of the Tax Administrator and the Fund 

Administrator, tax obligations, and investment costs. 

8. “Claim Form” means the form designed by the Fund Administrator, in 

consultation with the Commission staff, for the filing of claims in accordance with this Plan. The 

claim form will require, at a minimum, sufficient documentation reflecting any Preliminary

Claimant’s purchases and dispositions of Securities on the Relevant Date such that eligibility 

under the Plan can be determined, tax identification and other related information from the 

Preliminary Claimant as determined necessary by the Fund Administrator in coordination with 

the Tax Administrator, and a certification that the Preliminary Claimant is not an Excluded Party.

9. “Claim Status Notice” means the notice sent by the Fund Administrator within 

ninety (90) days of the Claims Bar Date to all Preliminary Claimants that submitted a Claim 

Form. The Claim Status Notice will set forth the Fund Administrator’s determination of the 

eligibility of the claim (eligible, partially or wholly deficient, or ineligible). The Claim Status
3

Notice will provide to each Preliminary Claimant whose claim is deficient, in whole or in part, 

the reason(s) for the deficiency, notify the Preliminary Claimant of the opportunity to cure such 

deficiency, and provide instructions regarding further necessary actions. In the event the claim is 

denied, the Claim Status Notice will state the reason(s) for such denial and notify the Preliminary

Claimant of their opportunity to request reconsideration of their claim.

10. “Claims Bar Date” means the date established in accordance with this Plan by 

which a Preliminary Claimant’s Claim Form must be postmarked or submitted electronically in 

order to receive consideration under the Plan. The Claims Bar Date shall be one hundred twenty 

(120) days after the initial mailing of the Claims Packet. Claim Forms submitted by Preliminary

Claimants postmarked or received after the Claims Bar Date will not be accepted unless the Fund 

Administrator is directed to do so by the Commission staff.

11. “Claims Packet” means the materials relevant to submitting a claim that will be 

provided to Preliminary Claimants known to the Fund Administrator or to those who request such 

materials through a website or otherwise prior to the Claims Bar Date. The Claims Packet will 

include, at a minimum, a copy of the Plan Notice and a Claim Form (together with instructions for 

completion of the Claim Form).

12. “Distribution Payment” means a payment from the Fair Fund to a Payee

in accordance with the terms of this Plan.

13. “Eligible Claimant” means a Preliminary Claimant with a valid claim, who may 

have suffered a loss as a result of holding shares of the Security at the close of trading on the 

Relevant Date, pursuant to the Plan of Allocation, and who is not an Excluded Party.

14. “Excluded Party” means:

(a) The Respondents;

(b) Present or former officers or directors of Respondents and any assigns, 

creditors, heirs, distributees, spouses, parents, dependent children or 

controlled entities of any of the foregoing persons or entities;

(c) Any employee or former employee of the Respondents or any of its 

affiliates who has been terminated for cause or has otherwise resigned, in 

connection with the conduct described in the Order;

(d) Any Person who, as of the Claims Bar Date, has been the subject of 

criminal charges related to the conduct described in the Order or any related 

Commission action;

(e) Any firm, trust, corporation, officer, or other entity that has or had a 

controlling interest in Covia or Fairmount, including any parent 

company to Respondents or any parent company to an entity that 

acquired Covia or Fairmount or merged with Covia or Fairmount;
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(f) Any firm, trust, corporation, officer, or other entity in which 

Respondents have or had a controlling interest;

(g) The Fund Administrator, its employees, and those persons assisting the

Fund Administrator in its role as the Fund Administrator; and

(h) Any purchaser or assignee of another Person’s right to obtain a 

recovery from the Fair Fund for value; provided, however, that this 

provision shall not be construed to exclude those Persons who obtained 

such a right by gift, inheritance or devise.

The Claim Form will require claimants to certify that they are not an Excluded Party.

15. “Fair Fund” means the $1,000,000 fund created by the Commission pursuant to 

Section 308(a) of the Sarbanes-Oxley Act of 2002, for the benefit of investors harmed by 

Respondents’ violations described in the Order.

16. “Final Determination Notice” shall mean the written notice sent by the Fund 

Administrator to any Preliminary Claimant who timely responded to the Claim Status Notice in an 

effort to cure a deficiency or seek reconsideration of a denied claim. The Final Determination 

Notice will constitute the Fund Administrator’s final ruling regarding the status of the claim.

17. “Net Available Fair Fund” means the Fair Fund, plus any interest or earnings, 

less Administrative Costs.

18. “Payee” means an Eligible Claimant who is determined to receive a Distribution 

Payment, as calculated in accordance with the Plan of Allocation.

19. “Plan Notice” means a written notice from the Fund Administrator to Preliminary

Claimants informing them of the Fair Fund; the Plan and its eligibility requirements; explaining 

how to submit a claim, including directions for any online claims process; and how to obtain a 

copy of the approved Plan and Claim Form by request or from the Fair Fund’s website. The Plan 

Notice will also be available on the Fair Fund’s website that is maintained by the Fund 

Administrator. 

20. “Person” means natural individuals as well as legal entities such as corporations, 

partnerships, or limited liability companies.

21. “Plan of Allocation” means the methodology by which an Eligible Claimant’s 

Recognized Loss is calculated. The Plan of Allocation is attached as Exhibit A.

22. “Preliminary Claimant” means a Person, or their lawful successors asserting 

prior to the Claims Bar Date that he, she, or it has a possible claim to recover from the Fair Fund 

under this Plan.

23. “Recognized Loss” means the amount of loss calculated for an Eligible Claimant 

in accordance with the Plan of Allocation.
5

24. “Relevant Date” means March 22, 2019.

25. “Security” or “Securities” refers to shares of the Respondents’ common stock 

listed on a U.S. exchange and registered with the Commission and traded under the symbol CVIA 

on the Relevant Date.

26. “Summary Notice” means the notice published in print or internet media that 

shall include, at a minimum, a statement of the purpose of the Fair Fund and the Plan, the means 

of obtaining a Claims Packet, and the Claims Bar Date. The Summary Notice will be published 

once per week for three consecutive weeks and will first appear within ten (10) days of the initial 

mailing of the Plan Notice.

27. “Third-Party Filer” means a third-party, including without limitation a nominee, 

custodian, or an intermediary holding in street name, who is authorized to submit and submits a 

claim(s) on behalf of, one or more Preliminary Claimants. Third Party Filer does not include 

assignees or purchasers of claims, which are excluded from receiving distribution payments.

IV. TAX COMPLIANCE

28. On February 23, 2021, the Commission appointed Miller Kaplan Arase LLP as the 

tax administrator (the “Tax Administrator”) for the Fair Fund to handle the tax obligations of the 

Fair Fund.

2

 The Tax Administrator will be compensated for reasonable fees and expenses from the 

Fair Fund in accordance with its 2019-2021 Engagement Letter Agreement with the Commission.3

29. The Fair Fund constitutes a Qualified Settlement Fund (“QSF”) under Section 

468B(g) of the Internal Revenue Code of 1986, as amended, 26 U.S.C. § 468B(g), and related 

regulations, 26 C.F.R. §§ 1.468B-1 through 1.468B-5. The Tax Administrator is the administrator of 

such QSF, for purposes of Treas. Reg. § 1.468B-2(k)(3)(I) and shall satisfy the tax-related 

administrative requirements imposed by Treas. Reg. § 1.468B-2, including, but not limited to:

(a) Obtaining a taxpayer identification number; 

(b) Requesting funds necessary for the timely payment of all applicable taxes, the 

timely payment of taxes for which the Tax Administrator has received funds, 

and the filing of applicable returns; and 

(c) Fulfilling any information reporting or withholding requirements required for 

distributions from the Fair Fund.

30. All tax obligations will be paid from the Fair Fund, subject to the review and approval 

of Commission staff.

 

2 Exchange Act Rel. No. 91187 (Feb. 23, 2021).

3 See Omnibus Order Directing the Appointment of Tax Administrator in Administrative Proceedings that Establish 

Distribution Funds, Exchange Act Rel. No. 85174 (Feb. 22, 2019).
6

V. FUND ADMINISTRATOR

31. The Commission appointed Analytics Consulting LLC, as the fund administrator for 

the Fair Fund (the “Fund Administrator”), and the Fund Administrator has obtained a bond in the 

amount of $1,000,000, as ordered.

4

32. The Fund Administrator will be responsible for administering the Fair Fund in 

accordance with the Plan. This will include, among other things, taking reasonable steps to identify 

and contact Preliminary Claimants; obtaining accurate mailing information for Preliminary

Claimants; establishing a website and staffing a call center to address inquiries during the claims 

process; developing a claims database; preparing accountings; cooperating with the tax administrator 

appointed by the Commission to satisfy any tax liabilities and to ensure compliance with income tax 

reporting requirements, including but not limited to the Foreign Account Tax Compliance Act 

(FATCA); advising Preliminary Claimants of deficiencies in claims and providing an opportunity to 

cure any documentary defects; taking antifraud measures, such as identifying false, ineligible and 

overstated claims; making determinations under the criteria established herein as to Preliminary

Claimant eligibility; advising Preliminary Claimants of final claim determinations; disbursing the 

Fair Fund in accordance with this Plan, as ordered by the Commission; and researching and 

reconciling errors and reissuing payments when possible.

33. To carry out the purposes of this Plan, the Fund Administrator is authorized to make 

and implement immaterial changes to the Plan upon agreement of the Commission staff. If a change 

is deemed to be material by the Commission staff, Commission approval is required prior to 

implementation by amending the Plan.

34. The Fund Administrator may extend any procedural deadline contained in the Plan 

for good cause shown, if agreed upon by the Commission staff.

35. The Fund Administrator is authorized to enter into agreements with institutions 

(“Institutions”) as may be appropriate or necessary in the administration of the Fair Fund, provided 

such Institutions are not excluded pursuant to other provisions of this Plan. In connection with such 

agreements, the Institutions shall be deemed to be agents of the Fund Administrator under this Plan. 

36. The Fund Administrator will be entitled to payment from the Fair Fund of reasonable 

fees and expenses, including the bond premium, incurred in the performance of its duties (including 

any such fees and expenses incurred by agents, consultants or third parties retained by the Fund 

Administrator in furtherance of its duties).

VI. ADMINISTRATION OF THE FAIR FUND

Identification of and Notification to Preliminary Claimants

37. The Fund Administrator will, insofar as practicable, use its best efforts to identify

Preliminary Claimants from a review of trading records, obtaining records from registered brokerdealers and investment advisors, and seeking information from any other source available to them. 

 

4 See Order Appointing Fund Administrator and Setting Bond Amount, Exchange Act Rel. No. 92211 (June 21, 2021).
7

The Fund Administrator may also engage a third-party firm, after consultation with and approval of 

the Commission staff, to assist in identifying Preliminary Claimants to maximize the participation 

rate of the Respondents’ investors in the Fair Fund.

38. Within sixty days (60) after Commission approval of the Plan, the Fund 

Administrator shall:

(a) design and submit a Claims Packet, including the Plan Notice and the 

Claim Form, to the Commission staff for review and approval;

(b) create a mailing and claim database of all Preliminary Claimants based 

upon information identified by the Fund Administrator;

(c) run a National Change of Address search to retrieve updated addresses 

for all records in the database, thereby ensuring the mailing 

information for Preliminary Claimants is up-to-date;

(d) mail a Claims Packet to each Preliminary Claimant identified by the 

Fund Administrator and to the Fund Administrator’s list of banks, 

brokers, and other nominees in accordance with paragraph 43 below;

(e) establish and maintain a website devoted solely to the Fair Fund. The 

Fair Fund’s website, located at www.CoviaFairFund.com, will make 

available a copy of the approved Plan; provide information regarding 

the claims process and eligibility requirements for participation in the 

Fair Fund in the form of frequently asked questions; include in 

downloadable form, the Claim Form other related materials; and such 

other information the Fund Administrator believes will be beneficial 

to Preliminary Claimants;

(f) establish and maintain a toll-free telephone number, 855-686-1990, for 

Preliminary Claimants to call to speak to a live representative of the 

Fund Administrator during its regular business hours or, outside of 

such hours, to hear prerecorded information about the Fair Fund. The 

toll-free number will be listed on all correspondence from the Fund 

Administrator to Preliminary Claimants as well as on the Fair Fund’s 

website; and

(g) establish and maintain a traditional mailing address and an email 

address which will be listed on all correspondence from the Fund 

Administrator to Preliminary Claimants as well as on the Fair Fund’s 

website.

39. The Fund Administrator will publish the Summary Notice on the internet and/or in 

print media acceptable to Commission staff once per week for three consecutive weeks starting

within ten (10) days of the initial mailing of the Plan Notice.
8

40. The Commission staff retains the right to review and approve any material posted on 

the Fair Fund’s website, any material mailed, and any scripts used in connection with the 

communication with Preliminary Claimants.

41. In all materials that refer to the Claims Bar Date, the filing deadline will be clearly 

identified with the calendar date, which is one hundred twenty (120) days from the date of the initial 

mailing of the Claims Packet. 

42. The Fund Administrator will promptly provide a Claims Packet to any Preliminary

Claimant upon request made via mail, phone, or email prior to the Claims Bar Date.

43. The Fund Administrator will send by mail, email, or other means, the Plan Notice to 

the Fund Administrator’s list of banks, brokers, and other nominees, as well as any other institutions 

identified during the outreach process, that may have records of the Security on the Relevant Date 

(collectively, the “Nominees or Custodians”). The Fund Administrator will request that these 

entities, to the extent that they were record holders for beneficial owners of the Security:

(a) within fourteen (14) days of the Nominees’ or Custodians’ receipt of the 

Plan Notice, notify and send the Plan Notice to the respective beneficial 

owners, and, as requested, provide to the beneficial owners a Claims 

Packet, so that the beneficial owners may timely file a claim. The burden 

will be on the Nominees or Custodians to ensure the claims process 

information, including, if requested, the Claim Packet and other relevant 

materials, is properly disseminated to the beneficial owners; and/or

(b) provide to the Fund Administrator, within fourteen (14) days of receipt of 

the Plan Notice, a list of last known names and addresses for all beneficial 

owners for whom/which they purchased, as the record holder, the Security 

on the Relevant Date, so that the Fund Administrator can communicate 

with the beneficial owners directly.

44. At the discretion of the Fund Administrator, in consultation with the Commission 

staff, a reasonable number of additional copies of the Claims Packet shall be made available to any

Nominee or Custodian requesting it for the purpose of distribution to beneficial owners.

45. Requests to the Fund Administrator for additional copies of the Claims Packet in 

excess of fifty (50) are subject to approval by the Fund Administrator, in consultation with the 

Commission staff.

46. Documented reasonable out-of-pocket expenses incurred by the Nominees or the 

Custodians, which would not have been incurred but for compliance with paragraph 43 above, shall 

be reimbursed from the Fair Fund. The amount of such expenses allowed will be at the discretion of 

the Fund Administrator, in consultation with the Commission staff. Unless otherwise determined by 

the Fund Administrator in consultation with the Commission staff, out-of-pocket expenses based on 

the following rates will be considered reasonable: 
9

(a) a maximum of $0.08 per Claims Packet, plus postage at the pre-sort 

postage rate per Claim Packet actually mailed; 

(b) $0.05 per email of Summary Publication or Plan Notice and Claim Form 

link disseminated; or

(c) $0.20 per name, address, and email address provided to the Fund 

Administrator, up to a maximum of amount of $1,500.00.

47. The Fund Administrator will attempt to locate any Preliminary Claimant whose 

mailing is returned as “undeliverable” and will document all such efforts. The Fund Administrator 

shall use its best efforts to make use of commercially available resources and other reasonably 

appropriate means to obtain updated addresses in response to “undeliverable” notices, and forward 

any returned mail for which an updated address is provided or obtained. The Fund Administrator 

will make available, upon request by the Commission staff, a list of all Preliminary Claimants whose 

Claims Packet have been returned as “undeliverable” due to incorrect addresses and for which the 

Fund Administrator has been unable to locate current addresses.

Filing a Claim

48. To avoid being barred from asserting a claim, on or before the Claims Bar Date, each

Preliminary Claimant must submit to the Fund Administrator a properly completed Claim Form 

reflecting such Preliminary Claimant’s claim, together with all required supporting documentation as 

the Fund Administrator, in its discretion, deems necessary or appropriate to substantiate the claim. 

Without limitation, this information may include third-party documentary evidence of purchases and 

dispositions of the Security as of the Relevant Date, as well as holdings of the Security as of the 

pertinent date. The burden will be upon the Preliminary Claimant to ensure that his, her, or its Claim 

Form has been properly and timely received by the Fund Administrator. A Claim Form that is 

postmarked after the Claims Bar Date will not be accepted unless the deadline is extended by the 

Fund Administrator for good cause shown, after consultation with the Commission staff. 

49. The burden to prove receipt of the claim by the Fund Administrator will be upon the 

Preliminary Claimant; therefore the Preliminary Claimants will be instructed to submit their claims 

in a manner that will enable them to prove receipt of the claim by the Fund Administrator.

50. All Claim Forms and supporting documentation necessary to determine a Preliminary

Claimant’s eligibility to receive a distribution from the Fair Fund under the terms of the Plan must 

be verified by a declaration executed by the Preliminary Claimant under penalty of perjury under the 

laws of the United States. The declaration must be executed by the Preliminary Claimant, unless the 

Fund Administrator accepts such declaration from a Person authorized to act on the Preliminary

Claimant’s behalf, whose authority is supported by such documentary evidence as the Fund 

Administrator deems necessary. 

51. Electronic claims submission is encouraged; the Claims Packet will include directions 

on how Preliminary Claimants can submit their claims electronically via the Fair Fund’s website. If 

using theweb-based claim filing option, a Preliminary Claimant must submit their claim to the Fund 

Administrator by 11:59 p.m. on the Claims Bar Date. The Claims Packet will also include directions 
10

for submission of claims if the Preliminary Claimant is unable to submit their claim electronically.

52. When submitting claims to the Fair Fund on behalf of its clients, all Third-Party 

Filers must use the electronic filing template provided by the Fund Administrator in this matter. 

Filers that do not comply with the template and format provided by the Fund Administrator may be 

rejected. Third-Party Filers must also submit a signed master proof of claim and release, as well as 

proof of authority to file on behalf of the claimant(s) at the time the electronic file of transactions is 

submitted. Failure to do so may result in rejection of the claim.

53. Each Third-Party Filer must establish the validity and amount of each claim in its 

submission. Third-Party Filers must submit such supporting documentary evidence of purchases, 

dispositions, and holdings of the Security as the Fund Administrator deems necessary or appropriate 

to substantiate each individual claim. Without limitation, this includes the complete name of the 

Preliminary Claimant (beneficial account owner) and its TIN (for individuals) or EIN (for 

companies), sufficient contact information to confirm the identity of the beneficial owner, and 

documentation from the original bank, broker or other institution of purchases and dispositions of 

the Security (account statements, confirmations and other documentation of purchases and 

dispositions), as well as holdings of the Security on pertinent dates. Documentation generated by the 

Third-Party Filer as well as affidavits in lieu of supporting documentation will not be accepted 

unless, for good cause, the Fund Administrator determines it acceptable. The Fund Administrator 

will have the right to request, and the Third-Party Filer will have the burden of providing to the Fund 

Administrator, any additional information and/or documentation deemed necessary by the Fund 

Administrator to substantiate the claim(s) contained in the submission. Documentation from a 

Third-Party Filer that is not acceptable to the Fund Administrator will result in rejection of the 

affected claim(s). The determination of the Fund Administrator to reject a claim for insufficient 

documentation, as reflected on the Final Determination Notice, is final and within the discretion of 

the Fund Administrator. 

54. The receipt of Securities by gifts, inheritance, devise, or operation of law will not be 

deemed to be a purchase of Securities, nor will it be deemed an assignment of any claim relating to 

the purchase of such Securities unless specifically so provided in the instrument of inheritance. 

However, the recipient of Securities as a gift, inheritance, devise or by operation of law will be 

eligible to file a Claim Form and participate in the distribution of the Fair Fund to the extent the 

original purchaser would have been eligible under the terms of the Plan. Only one claim may be 

submitted with regard to the same transactions in Securities, and in cases where multiple claims are 

filed by the donor and donee, the donee claim will be honored, assuming it is supported by proper 

documentation.

55. Claims on behalf of a retirement plan covered by Section 3(3) of ERISA, 29 U.S.C.§ 

1002(3), which do not include Individual Retirement Accounts, and such plan’s participants, are 

properly made by the administrator, custodian or fiduciary of the plan and not by the plan’s 

participants. The Fund Administrator will distribute any payments on such claims directly to the 

administrator, custodian or fiduciary of the retirement plan. The custodian or fiduciary of the 

retirement plan will distribute any payments received in a manner consistent with its fiduciary duties 

and the governing account or plan provisions.
11

Claims Eligibility Determination

56. The Fund Administrator will review all claim submissions and determine the 

eligibility of each Preliminary Claimant to participate in the Fair Fund by reviewing claim data and 

supporting documentation (or the lack thereof) and verifying the validity of the claim. Any 

Preliminary Claimant with a valid claim that may have suffered a loss from holding shares of the 

Security at the close of trading on the Relevant Date, and who is not an Excluded Party, will be 

deemed an Eligible Claimant. The Fund Administrator will then determine if the Eligible 

Claimant’s has suffered a Recognized Loss pursuant to the Plan of Allocation. Each Preliminary

Claimant will have the burden of proof to establish the validity and amount of his, her, or its claim, 

and their qualification as an Eligible Claimant. The Fund Administrator will have the right to

request, and the Preliminary Claimant will have the burden of providing to the Fund Administrator, 

any additional information and/or documentation deemed relevant by the Fund Administrator.

57. The Fund Administrator will provide a Claim Status Notice within ninety (90) days of 

the Claims Bar Date to each Preliminary Claimant who has filed a Claim Form with the Fund 

Administrator, setting forth the Fund Administrator's determination of eligibility. The Claim Status 

Notice will provide to each Preliminary Claimant whose claim is deficient, in whole or in part, the 

reason(s) for the deficiency (e.g., failure to provide required information or documentation). In the 

event the claim is denied, in whole or in part, the Claim Status Notice will state the reason for such 

denial. The Claim Status Notice will also notify the Preliminary Claimant of the opportunity to cure 

any deficiency or request reconsideration of the determination made by the Fund Administrator and 

provide instructions regarding what is required to do so. Recognizing the nature of their claims, 

Third-Party Filers may be sent Claim Status Notices electronically, and in bulk.

58. Any Preliminary Claimant with a deficient claim will have thirty (30) days from the 

date of the Claim Status Notice to cure any deficiencies identified in theClaim Status Notice.

59. Any Preliminary Claimant seeking reconsideration of a denied claim must advise the 

Fund Administrator in writing within thirty (30) days of the date ofthe Claim Status Notice. All 

requests for reconsideration must include the necessary documentation to substantiate the basis upon 

which the Preliminary Claimant is requesting reconsideration of their claim.

60. The Fund Administrator will send, as appropriate, a Final Determination Notice to all 

Preliminary Claimants who responded to the Claim Status Notice in an effort to cure a deficiency or

seek reconsideration of a rejected claim. The Fund Administrator will send such Final 

Determination Notices no later than thirty (30) days following receipt of documentation or 

information in response to the Claim Status Notice, or such longer time as the Fund Administrator

determines is necessary for a proper determination concerning the claim.

61. The Fund Administrator may, in its sole discretion, consider disputes of any nature 

presented in writing within thirty (30) days of the Claim Status Notice by Preliminary Claimants, 

and will consult Commission staff as appropriate. 

62. The Fund Administrator will also have the authority, in its sole discretion, to waive 

technical claim deficiencies and approve claims on a case-by-case basis, or in groups of claims. All 
12

determinations made by the Fund Administrator in accordance with the Plan in any dispute, request 

for reconsideration, or request to cure a deficient claim will be final and not subject to appeal.

63. The Preliminary Claimant has the burden of notifying the Fund Administrator of a 

change in his, her, or its current address and other contact information, and of ensuring that such 

information is properly reflected on the Fund Administrator's records.

Distribution Methodology

64. The Fund Administrator will determine if an Eligible Claimant suffered a Recognized 

Loss in accordance with the Plan of Allocation. All Eligible Claimants who are determined to 

receive a Distribution Payment pursuant to the Plan of Allocation will be deemed a Payee.

Establishment of a Reserve

65. Before determining the amount of funds available for distribution and calculating 

each Payee’s Distribution Payment, the Fund Administrator, in conjunction with the Tax 

Administrator, will establish a reserve to pay future Administrative Costs and to accommodate any 

unexpected expenditures (the “Reserve”).

66. After all disbursements and Administrative Costs are paid, any remaining amounts in 

the Reserve will become part of the Residual described in paragraph 88 below.

Preparation of the Payment File

67. Within forty-five (45) days following the date of the Final Determination Notices 

described above, paragraph 60, the Fund Administrator will compile and send to the Commission 

staff the Payee information, including the name, address, calculated Recognized Loss, and the 

amount of the Distribution Payment for all Payees (the “Payee List”). The Fund Administrator will 

also provide a Reasonable Assurances Letter to the Commission staff, representing that the list of 

Payees: (a) was compiled in accordance with the approved Plan; (b) is accurate as to the Payees’ 

names, addresses, Recognized Losses, and amount of their Distribution Payments; and (c) provides 

all information necessary to make a payment to each Payee.

The Escrow Account

68. Prior to the disbursement of the Net Available Fair Fund, the Fund Administrator will 

establish an escrow account (the “Escrow Account”) with a United States commercial bank that is a 

well-capitalized financial institution as defined by the Federal Reserve Act, Subpart D, 12 C.F.R.

208.43 and that is not unacceptable to the Commission staff (the “Bank”), pursuant to an escrow 

agreement (the “Escrow Agreement”) to be provided by Commission staff. 

69. The Fund Administrator, pursuant to the Escrow Agreement, shall also establish with 

the Bank a separate deposit account (e.g. controlled distribution account, managed distribution 

account, linked checking and investment account) (the “Distribution Account”), insured by the 

Federal Deposit Insurance Corporation (“FDIC”) up to the guaranteed FDIC pass through limit. The 

Distribution Account shall be linked with the Escrow Account and shall be named, and records 
13

maintained, in accordance with the Escrow Agreement. 

70. During the term of the Escrow Agreement, the portions of the Fair Fund transferred to 

the Escrow Account (the “Escrow Property”), if invested, shall be invested and reinvested in shortterm U.S. Treasury securities backed by the full faith and credit of the United States Government or 

an agency thereof. The investment shall be, of a type and term necessary to meet the cash liquidity 

requirements for payments to Eligible Claimants, tax obligations, and/or fees of the Tax 

Administrator and/or Fund Administrator, including investment or reinvestment in a bank account 

insured by the FDIC up to the guaranteed FDIC limit, or in money market mutual funds registered 

under the Investment Company Act of 1940 that invest 100% of their assets in direct obligations of 

the United States Government. 

71. The Fund Administrator shall provide duplicate original bank and/or investment 

statements on any accounts established by the Fund Administrator to the Tax Administrator on a 

monthly basis and shall assist the Tax Administrator in obtaining mid-cycle statements, as necessary.

72. The Fund Administrator shall deposit or invest funds in the Escrow and Distribution 

Accounts so as to result in the maximum reasonable net return, taking into account the safety of such 

deposits or investments. In consultation with Commission staff, the Fund Administrator shall work 

with the Bank on an ongoing basis to determine an allocation of funds between the Escrow and 

Distribution Account.

73. All interest, dividends, and/or income earned by the Escrow Property will accrue for 

the benefit of the Escrow Property. All Administrative Costs associated with the Escrow and 

Distribution Accounts will be the responsibility of the Fund Administrator, who may be reimbursed 

for said costs as provided in this Plan. No such Administrative Costs may be paid to the Bank, its 

agents, and/or its affiliates from the Escrow Property.

Distribution of the Fair Fund

74. The Fund Administrator will seek to distribute the Net Available Fair Fund to all 

Payees only after all Claim Forms have been processed and all Preliminary Claimants whose claims 

have been rejected or disallowed, in whole or in part, have been notified and provided the 

opportunity to contest or cure pursuant to the procedures set forth herein.

75. Upon the Commission’s staff’s receipt, review, and acceptance of the Payee List and 

Reasonable Assurances Letter from the Fund Administrator, the Commission staff will seek an order 

from the Commission pursuant to Rule 1101(b)(6) of the Commission’s Rules, 17 C.F.R. § 

210.1101(b)(6), to disburse funds to the Bank in accordance with the Payee List for distribution by 

the Fund Administrator in accordance with the Plan. All disbursements will be made pursuant to a 

Commission Order. 

76. Upon issuance of an order to disburse, the amount of funds referred to on the Payee 

List will be transferred to the Bank. The Fund Administrator will then use its best efforts to 

commence mailing Distribution Payment checks and/or effect wire transfers within ten (10) business 

days of the release of the funds into the Escrow Account. All efforts will be coordinated to limit the 

time between the Escrow Account’s receipt of the funds and the issuance of Distribution Payments.
14

77. All checks will be issued by the Fund Administrator from the Distribution Account.

All checks will bear a stale date of one hundred twenty (120) days from the date of issuance. Checks 

that are not negotiated by the stale date will be voided, and the Bank will be instructed to stop payment 

on those checks. A Payee’s claim will be extinguished if he, she, or it fails to negotiate his, her or its 

check by the stale date, and the funds will remain in the Fair Fund, except as provided in paragraph 

85 below. 

78. All payments will be preceded or accompanied by a communication that includes, as 

appropriate: (a) a statement characterizing the distribution; (b) a statement that the tax treatment of 

the distribution is the responsibility of each Payee and that the Payee should consult his or her tax 

advisor for advice regarding the tax treatment of the distribution; (c) a statement that checks will be 

void and cannot be reissued after one hundred twenty (120) days from the date the original check 

was issued; and (d) contact information for the Fund Administrator for questions regarding the 

Distribution Payment. The letter or other mailings to Payees characterizing a Distribution Payment 

will be submitted to the Tax Administrator and Commission staff for review and approval. 

79. All Distribution Payments, either on their face or in the accompanying mailing, will 

clearly indicate that the money is being distributed from the Fair Fund established by the 

Commission to compensate investors for harm as a result of securities law violations. 

80. Distribution Payments must be made by check or electronic payment payable to the 

Payee (the beneficial account owner). A Third-Party Filer shall not be the payee of any Distribution 

Payment check or electronic Distribution Payment. Any other payment arrangement must be 

discussed with the Fund Administrator in consultation with the Commission staff and must be 

authorized by the Payee. Compensation to the Third-Party Filer for its services may not be paid or 

deducted from the Distribution Payment.

81. If, after discussion with the Fund Administrator in consultation with the Commission 

staff, and authorization by the Payee(s), a Distribution Payment is to be made to a Third-Party Filer 

to distribute to the Payee(s), the Third-Party Filer will be required to complete a certification, which 

will require them, at a minimum, to attest that any distribution to the custodian, trustee, or 

investment professional representing multiple potentially eligible beneficial owners, will be 

allocated for the benefit of current or former pooled investors and not for the benefit of management. 

The certification form will be available on the Fair Fund website and upon request from the Fund 

Administrator. All such Third-Party Filers must have an auditable mechanism available to the Fund 

Administrator and the Commission staff to confirm that each Payee received the Distribution 

Payment directed to them.

82. The submission of a Claim Form and the receipt and acceptance of a Distribution 

Payment by a Payee is not intended to be a release of a Payee’s rights and claims against any party.

83. Electronic or wire transfers may be utilized at the discretion of the Fund 

Administrator to transfer approved Distribution Payments to filers of claims on behalf of twenty (20) 

or more Payees. Wire transfers will be initiated by the Fund Administrator using a two-party check 

and balance system, whereby completion of a wire transfer will require an authorization by two 

members of the Fund Administrator’s senior staff.
15

Post-Distribution; Handling of Returned or Uncashed Checks; and Reissues

84. The Fund Administrator shall use its best efforts to make use of reasonable 

commercially available resources and other reasonably appropriate means to locate all Payees whose 

checks are returned to the Fund Administrator as “undeliverable.” If new address information 

becomes available, the Fund Administrator will repackage the distribution check and send it to the 

new address. If new address information is not available after a diligent search (and in no event no 

later than one hundred twenty (120) days after the initial mailing of the original check) or if the 

distribution check is returned again, the check shall be voided and the Fund Administrator shall 

instruct the issuing financial institution to stop payment on such check. If the Fund Administrator is 

unable to find a Payee’s correct address, the Fund Administrator, in its discretion, may remove such 

Payee from the distribution and the allocated Distribution Payment will remain in the Fair Fund for 

distribution, if feasible, to the remaining Payees.

85. The Fund Administrator will reissue checks to Payees upon the receipt of a valid, 

written request from the Payee prior to the initial stale date. In cases where a Payee is unable to 

endorse a Distribution Payment check as written (e.g., name changes, IRA custodian changes, or 

recipient is deceased) and the Payee or a lawful representative requests the reissuance of a 

Distribution Payment check in a different name, the Fund Administrator will request, and must 

receive, documentation to support the requested change. The Fund Administrator will review the 

documentation to determine the authenticity and propriety of the change request. If, in the discretion 

of the Fund Administrator, such change request is properly documented, the Fund Administrator will 

issue an appropriately redrawn Distribution Payment to the requesting party. Reissued checks will 

be void at the later of sixty (60) days from the stale date of the original check or ninety (90) days 

from the reissuance, and in no event will a check be reissued after one hundred twenty (120) days 

from the date of the original issuance without the approval of Commission staff.

86. The Fund Administrator will make reasonable efforts to contact Payees who have 

failed to negotiate their Distribution Payment and take appropriate action to follow up on the status 

of uncashed checks at the request of Commission staff. The Fund Administrator may reissue such 

checks subject to the time limits detailed herein.

Disposition of Undistributed Funds

87. If funds remain following the initial distribution and payment of all Administrative 

Costs, the Fund Administrator, in consultation with the Commission staff, may seek subsequent 

distribution of any available remaining funds, pursuant to the Commission’s Rules. 

88. A residual within the Fair Fund will be established for any amounts remaining after 

the final disbursement to Payees from the Fair Fund (the “Residual”). The Residual may include

funds from, among other things, amounts remaining in the Reserve, distribution checks that have not 

been cashed, checks or electronic payments that were not delivered or from funds returned to the 

Commission, and Fair Fund tax refunds for overpayment or for waiver of IRS penalties.
16

89. All funds remaining in the Residual that are infeasible to distribute to investors will 

be returned to the Commission and transferred to the U.S. Treasury after the final accounting is 

approved by the Commission. 

Accountings

90. Pursuant to Rule 1105(f) of the Commission’s Rules, once funds have been 

transferred from the BFS to the Bank, the Fund Administrator will file an accounting of all monies 

earned or received and all monies spent in connection with the administration of the Plan with the 

Commission during the first ten (10) days of each calendar quarter on a standardized accounting 

form provided by the Commission staff. 

91. Upon completion of all distributions to Payees pursuant to the procedures described 

above, the Fund Administrator shall arrange for the payment of all Administrative Costs, transfer all 

remaining funds to the Commission, and submit a final accounting for approval by the Commission 

on a standardized form provided by the Commission staff. The Fund Administrator will also submit 

a report to the Commission staff summarizing the final distribution statistics regarding distributions 

to individuals and entities, and such other information requested by the Commission staff.

Termination of the Fair Fund

92. The Fair Fund will be eligible for termination and the Fund Administrator will be

eligible for discharge after all of the following have occurred (a) a final accounting, in a standard 

accounting format provided by the Commission staff, has been submitted by the Fund Administrator 

and approved by the Commission; (b) all Administrative Costs have been paid; and (c) any amount 

remaining in the Fair Fund has been returned to the Commission for transfer to U.S. Treasury. Once 

the Commission has approved the final accounting, the Commission staff will seek an order from the 

Commission authorizing: (a) the transfer of any amount remaining in the Residual that is infeasible 

to return to investors, and any amounts returned to the Fair Fund in the future that are infeasible to 

return to investors, to the U.S. Treasury, subject to Section 21F(g)(3) of the Exchange Act; (b) 

discharge of the Fund Administrator; (c) cancellation of the Fund Administrator’s bond; and (d) 

termination of the Fair Fund.

93. Once the Fair Fund has been terminated and funds, if any, are transferred to the U.S.

Treasury, no further claims will be allowed and no additional payments will be made whatsoever.

Miscellaneous

94. When administering this Plan, the Fund Administrator, and/or each of its designees, 

agents and assigns, may rely on: all applicable law; orders issued by the Commission, including 

orders issued by delegated authority; orders issued by an administrative law judge, if any, appointed 

in this proceeding; and any records, including records containing investor information, provided by 

Commission staff. 
17

95. Should any additional funds be received pursuant to Commission or Court order, 

agreement, or otherwise, prior to the Commission’s termination of the Fair Fund, such funds will be 

added to the Fair Fund and distributed, if feasible, in accordance with the Plan, pursuant to the 

Commission’s Rules. 

Wind-down and Document Retention

96. The Fund Administrator will shut down the website, P.O. Box and customer service 

telephone line(s) established specifically for the administration of the Fair Fund two (2) months after 

the transfer of any remaining funds to the Commission, or at such earlier time as the Fund 

Administrator determines with the concurrence of the Commission staff.

97. The Fund Administrator will retain all materials submitted by Payees in either paper 

or electronic form for a period of six (6) years from the date of approval of a final fund accounting. 

Materials maintained in electronic form must be accessible and readable for the duration of 

retention. Pursuant to the Commission staff's direction, the Fund Administrator will either turn over 

to the Commission or destroy all materials, including documents in any media, upon expiration of 

this period. 
1

EXHIBIT A

PLAN OF ALLOCATION

This Plan of Allocation is designed to compensate investors based on their losses on shares 

of the Respondents’ common stock listed on a U.S. exchange and registered with the Commission

and traded under the symbol CVIA (the “Security”) held at the close of trading on March 22, 2019, 

the date that Covia filed its Form 10-K for the fiscal year ended December 31, 2018, (the “Relevant 

Date”) as a result of the Respondents’ misconduct. In that filing, Covia disclosed the Commission’s 

investigation and its stock price subsequently fell $0.45 per share. Investors who did not hold shares 

of the Security at the close of trading on the Relevant Date did not suffer a loss by the Respondents’ 

violative conduct or who are an Excluded Party5and are ineligible to recover under this Plan. 

The Fund Administrator will calculate each Eligible Claimant’s loss (the “Recognized Loss”) 

as the number of shares of the Security the Eligible Claimant held at the close of trading on March 

22, 2019, multiplied by $0.45 (the change in share price on March 25, 2019).

If the Recognized Loss calculates to a negative number, then the Recognized Loss will be 

$0.00.

Additional Provisions

Options and Derivatives: Covia common stock is the only security eligible for recovery 

under this Plan. Option contracts to purchase or sell the Security are not securities eligible for 

recovery under the Plan. Transactions in the Security on the Relevant Date that are pursuant to, or in 

connection with, a swap or another derivative will not be eligible for a recovery. 

Allocation of Funds: If the Net Available Fair Fund, as defined in the Plan, equals or 

exceeds the sum of the Recognized Losses of all Eligible Claimants, each Eligible Claimant’s 

distribution amount will equal his, her, or its Recognized Loss, plus “Reasonable Interest” if 

applicable. If the Net Available Fair Fund is less than the sum of the Recognized Losses of all 

Eligible Claimants, each Eligible Claimant’s distribution amount will equal his, her, or its “Pro Rata

Share” of the Net Available Fair Fund (and no Reasonable Interest). In either case, the distribution 

amount will be subject to the “Minimum Distribution Amount.”

Reasonable Interest: If the Net Available Fair Fund exceeds that necessary to pay all Eligible 

Claimants their Recognized Losses in full, the Fund Administrator, in consultation with the 

Commission staff, may include interest in the distribution amount to compensate Eligible Claimants

for the time value of their respective Recognized Losses. Reasonable interest will be calculated 

using the Short-term Applicable Federal Rate plus three percent (3%), compounded quarterly from 

the Relevant Date through the approximate date of the disbursement of the funds. If there are 

insufficient funds to pay Reasonable Interest in full to all Eligible Claimants, each Eligible Claimant 

will receive his, her or its Pro Rata Share of the excess funds as the Reasonable Interest amount. 

 

5

 All capitalized terms used herein but not defined shall have the same meanings ascribed to them in the Plan.
2

Pro Rata Share: A Pro Rata share computation is intended to measure Eligible Claimants’ 

Recognized Losses against one another. The Fund Administrator shall determine each Eligible 

Claimant’s Pro Rata Share as the ratio of his, her, or its Recognized Loss to the sum of Recognized 

Losses of all Eligible Claimants.

Minimum Distribution Amount: The Minimum Distribution Amount will be $10.00. If an 

Eligible Claimant’s distribution amount is less than the Minimum Distribution Amount, he, she, or it 

will be deemed ineligible to receive a Distribution Payment and their distribution amount will be 

reallocated on a pro-rata basis to Eligible Claimants whose distribution amounts are greater than or 

equal to the Minimum Distribution Amount.

Payee: An Eligible Claimant that has a distribution amount (inclusive of Reasonable Interest, 

if any) that equals or exceeds the Minimum Distribution Amount will be deemed a Payee and 

receive a Distribution Payment for his, her, or its distribution amount. In no event will a Payee 

receive from the Fair Fund more than his, her, or its Recognized Loss, plus Reasonable Interest, if 

applicable.