/raid1/www/Hosts/bankrupt/CAR_Public/130704.mbx
C L A S S A C T I O N R E P O R T E R
Thursday, July 4, 2013, Vol. 15, No. 131
Headlines
60 EAST: Plea to Stay in Consolidated Class Suit Remains Pending
ACUITY INSURANCE: Obtains Summary Judgment Ruling in "Siding" Suit
ALP LIQUIDATING: "Rothal" Class Suit Still Pending in Florida
AMERICAN GREETINGS: Awaits OK of Pact in "Baker," "Collier" Suits
AMERICAN GREETINGS: Faces Consolidated Claim Over Privatization
AMERICAN GREETINGS: LMPERS to Abandon Appeal on Dismissal of Suit
AMERICAN GREETINGS: Faces "Wolfe Action II" Over Century Merger
AMERICAN HOME: Denial of Chaffin's Bid for Matrix Benefit Affirmed
ATLANTIC POWER: Sued in US, Canada Over Misleading Statements
BANCORPSOUTH INC: 11th Cir. Denies Bid to Appeal
CARBO CERAMICS: Court Dismisses Amended Securities Class Action
EMPIRE STATE: Bid to Stay in Consolidated Suit Remains Pending
F.N.B. CORPORATION: Wins Approval of Deal in Overdraft Fees Suit
FANNIE MAE: Reaches Agreement to Settle Consolidated Stock Suit
FANNIE MAE: Consolidated Securities, ERISA Suits in Discovery
FIFTH THIRD: Escrows $46MM for Interchange Fees Suit Accord
FIFTH THIRD: Still Awaits OK for $16MM Securities Suit Accord
FIRSTCITY FINANCIAL: Signs MOU to Settle Merger-Related Suits
FORD MOTOR: Hybrid Sedan Owners Sue Over Defective Cooling Pumps
GENERAL MOTORS: Ex-Canadian Dealers' Case Proceeds as Class Suit
GROUPON INC: Faces Suits Alleging Credit Card Act Violations
GROUPON INC: Countermotions Filed in Ill. Securities Lawsuit
GROUPON INC: Lead Plaintiff, Counsel Named in Investors' Suit
GROUPON INC: Faces 2 Securities Lawsuits in Illinois Court
GROUPON INC: $8MM Deal Okayed in Marketing, Sales Practices Suit
JONES FINANCIAL: Appeal in Lehman-Related Suits Remains Pending
JONES FINANCIAL: Awaits Ruling on Bid to Dismiss "Ezersky" Suit
KENDALL LAKES: Court Certifies FLSA Suit as Collective Action
LAPOLLA INDUSTRIES: Faces Fla. Suit Over Spray Foam Insulation
LEGGETT & PLATT: Still Faces Antitrust Lawsuits in US & Canada
LOJACK CORPORATION: $8.1MM Settlement of "Rutti" Suit Approved
LONE PINE: General, Admin. Costs Up Partly Due to Securities Suit
MAERSK LINE: Must Provide OT Pay to Sickly Seafarers, Court Rules
MOLYCORP INC: Motion to Dismiss "Albano" Securities Suit Pending
NBTY INC: Awaits Final Approval of "Hutchins" Suit Settlement
NBTY INC: Awaits OK of Glucosamine-Based Supplements Suits Deal
OLD REPUBLIC: ORNTIC Subsidiary Still Faces Suits Over Premiums
OLD REPUBLIC: Overcharged Title Recording Fees Suit in Discovery
OLD REPUBLIC: Enters Accord in Ala. Suit Alleging RESPA Violation
OLD REPUBLIC: RMIC Sued Over Alleged Kickback, Fee Splitting
OLD REPUBLIC: Settles Labor Suit by Escrow Employees in Calif.
OLD REPUBLIC: "Friedman" Lawsuit Now in Calif. Federal Court
OUTDOOR CHANNEL: Signs MOU to Settle "Feinstein" Class Suit
PANTRY INC: Discloses Updates on "Hot Fuel" Suits
RESIDENTIAL CAPITAL: To Escrow $450,000 for N.J. Class Suit Fees
TORCHMARK CORPORATION: October Trial Set in Suit v. Subsidiary
TORCHMARK CORPORATION: Cal. Court Dismisses TCPA Violations Suit
VOTORANTIM CIMENTOS: Defends Class Suit Alleging Cartel Formation
VOTORANTIM CIMENTOS: Negotiates Deal to Settle Serra do Mar Suit
VOTORANTIM CIMENTOS: Still Awaits Expert Report in Imbituba Suit
VOTORANTIM CIMENTOS: Still Awaits for Fla. AG and DOJs' Next Move
VOTORANTIM CIMENTOS: Still Awaits Ruling in "Mato Grosso" Suit
VOTORANTIM CIMENTOS: Still Defends "Oliveira" Suit vs. Unit
WMS INDUSTRIES: Illinois Court Dismisses Securities Lawsuit
WMS INDUSTRIES: Ill. Suits Over Scientific Merger Consolidated
*********
60 EAST: Plea to Stay in Consolidated Class Suit Remains Pending
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A motion for stay of all proceedings relating to the settlement in
the consolidated class action lawsuit pending in New York remains
pending, according to 60 East 42nd St. Associates L.L.C.'s May 13,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
The Company was originally organized as a partnership on
September 25, 1958. On October 1, 1958, the Company acquired fee
title to One Grand Central Place (the Building), formerly known as
the Lincoln Building, at the address 60 East 42nd Street, New
York, New York and the land thereunder. On November 28, 2001, the
Company converted to a limited liability company under New York
law and is now known as 60 East 42nd St. Associates L.L.C. The
conversion did not change any aspect of the assets and operations
of the Company other than to protect its participants from
liability to third parties. The Company's members are Peter L.
Malkin and Anthony E. Malkin, each of whom also acts as an agent
for holders of participations in his respective member interest in
the Company (Participants). The Members in the Company hold
senior positions at Malkin Holdings LLC, One Grand Central Place,
60 East 42nd Street, New York, New York, which provides
supervisory and other services to the Company and to Lessee.
The Company does not operate the Property. The Company leases the
Property to Lincoln Building Associates L.L.C. (Lessee) pursuant
to an operating lease as modified (the Lease), which is currently
set to expire on September 30, 2033. Lessee is a New York limited
liability company whose members consist of, among others, entities
for the benefit of members of Peter L. Malkin's family.
Malkin Holdings LLC and Peter L. Malkin, a member in the Company,
were engaged in a proceeding with Lessee's former managing agent,
Helmsley-Spear, Inc. commenced in 1997, concerning the management,
leasing, and supervision of the Property that is subject to the
Lease to Lessee. In this connection, certain costs for legal and
professional fees and other expenses were paid by Malkin Holdings
and Mr. Malkin. Malkin Holdings and Mr. Malkin have represented
that such costs will be recovered only to the extent that (a) a
competent tribunal authorizes payment or (b) an investor
voluntarily agrees that his or her proportionate share be paid.
On behalf of himself and Malkin Holdings, Mr. Malkin has
requested, or intends to request, such voluntary agreement from
all investors, which may include renewing such request in the
future for any investor who previously received such request and
failed to confirm agreement at that time. Because any related
payment has been, or will be, made only by consenting investors,
the Company has not provided for the expense and related liability
with respect to such costs in these financial statements.
In March 2012, five putative class actions, or the Class Actions,
were filed in New York State Supreme Court, New York County, by
Participants in Empire State Building Associates L.L.C. ("ESBA")
and several other entities supervised by the Supervisor (on
March 1, 2012, March 7, 2012, March 12, 2012, March 14, 2012, and
March 19, 2012). The plaintiffs assert claims against Malkin
Holdings LLC, Malkin Properties, L.L.C., Malkin Properties of New
York, L.L.C., Malkin Properties of Connecticut, Inc., Malkin
Construction Corp., Anthony E. Malkin, Peter L. Malkin, the Estate
of Leona M. Helmsley, Empire State Realty OP, L.P. and Empire
State Realty Trust, Inc. for breach of fiduciary duty, unjust
enrichment, and/or aiding and abetting breach of fiduciary duty.
They allege, among other things, that the terms of the
Consolidation and the process by which it was structured
(including the valuation that was employed) are unfair to the
participants in the existing entities, the Consolidation provides
excessive benefits to Malkin Holdings and its affiliates and the
then-draft prospectus/consent solicitation filed with the SEC
failed to make adequate disclosure to permit a fully informed
decision about the proposed Consolidation. The complaints seek
money damages and injunctive relief preventing the proposed
Consolidation. The actions were consolidated and co-lead
plaintiffs' counsel were appointed by the New York State Supreme
Court by order dated June 26, 2012. Furthermore, an underlying
premise of the Class Actions, as noted in discussions among
plaintiffs' counsel and defendants' counsel, was that the
Consolidation had been structured in such a manner that would
cause the participants in ESBA, 60 East 42nd St. Associates L.L.C.
and 250 West 57th St. Associates L.L.C. (the "subject LLCs")
immediately to incur substantial tax liabilities.
The parties entered into a Stipulation of Settlement dated
September 28, 2012, resolving the Class Actions. The Stipulation
of Settlement recites that the Consolidation was approved by
overwhelming consent of the participants in the private entities.
The Stipulation of Settlement states that counsel for the
plaintiff class satisfied themselves that they have received
adequate access to relevant information, including the independent
valuer's valuation process and methodology, that the disclosures
in the Registration Statement on Form S-4, as amended, are
appropriate, that the transaction presents potential benefits,
including the opportunity for liquidity and capital appreciation,
that merit the participants' serious consideration and that each
of named class representatives intends to support the transaction
as modified. The Stipulation of Settlement further states that
counsel for the plaintiff class are satisfied that the claims
regarding tax implications, enhanced disclosures, appraisals and
exchange values of the properties that would be consolidated into
Empire State Realty Trust Inc., and the interests of the
participants in the subject LLCs and the private entities, have
been addressed adequately, and they have concluded that the
settlement pursuant to the Stipulation of Settlement and
opportunity to consider the proposed transaction on the basis of
revised consent solicitations are fair, reasonable, adequate and
in the best interests of the plaintiff class.
The defendants in the Stipulation of Settlement denied that they
committed any violation of law or breached any of their duties and
did not admit that they had any liability to the plaintiffs.
The terms of the settlement include, among other things (i) a
payment of $55 million, with a minimum of 80% in cash and maximum
of 20% in freely-tradable shares of common stock and/or freely-
tradable operating partnership units (all of which will be paid by
affiliates of Malkin Holdings (provided that none of Malkin
Holdings and its affiliates that would become a direct or indirect
subsidiary of Empire State Realty Trust, Inc. in the Consolidation
will have any liability for such payment) and the Estate of Leona
M. Helmsley and certain participants in the private entities who
agree to contribute) to be distributed, after reimbursement of
plaintiffs' counsel's court-approved expenses and payment of
plaintiffs' counsel's court-approved attorneys' fees and, in the
case of shares of common stock and/or operating partnership units,
after the termination of specified lock-up periods, to
participants in the subject LLCs and the private entities pursuant
to a plan of allocation to be prepared by counsel for plaintiffs;
(ii) defendants' agreement that (a) the IPO will be on the basis
of a firm commitment underwriting; (b) if, during the solicitation
period, any of the three subject LLC's percentage of total
exchange value is lower than what is stated in the final
prospectus/consent solicitation by 10% or more, such decrease will
be promptly disclosed by defendants to participants in the subject
LLCs; and (c) unless total gross proceeds of $600,000,000 are
raised in the IPO, defendants will not proceed with the
transaction without further approval of the subject LLCs; and
(iii) defendants' agreement to make additional disclosures in the
prospectus/consent solicitation regarding certain matters (which
are included therein). Defendants have also acknowledged the work
of plaintiffs and their counsel was a material factor in
defendants' implementation of the change in the Consolidation
that, as originally proposed, would have required the exchange of
participation interests for Class A common stock, which are
taxable on receipt, and that now permits participants instead to
elect to receive operating partnership units and Class B common
stock, which permit tax deferral. Participants in the subject LLCs
and private entities will not be required to bear any portion of
the settlement payment. The payment in settlement of the Class
Actions will be made by the Estate of Leona M. Helmsley and
affiliates of Malkin Holdings (provided that none of Malkin
Holdings and its affiliates that would become a direct or indirect
subsidiary of Empire State Realty Trust, Inc. in the Consolidation
will have any liability for such payment) and certain participants
in the private entities who agree to contribute. The Company will
not bear any of the settlement payment.
The settlement further provides for the certification of a class
of participants in the three subject LLCs and all of the private
entities, other than defendants and other related persons and
entities, and a release of any claims of the members of the class
against defendants and related persons and entities, as well as
underwriters and other advisors. The release in the settlement
excludes certain claims, including but not limited to, claims
arising from or related to any supplement to the Registration
Statement on Form S-4 that is declared effective to which the
plaintiffs' counsel objects in writing, which objection will not
be unreasonably made or delayed, so long as plaintiffs' counsel
has had adequate opportunity to review such supplement. The
settlement is subject to court approval. It is not effective until
such court approval is final, including the resolution of any
appeal. The Defendants continue to deny any wrongdoing or
liability in connection with the allegations in the Class Actions.
On January 18, 2013, the parties jointly moved for preliminary
approval of such settlement, for permission to send notice of the
settlement to the class, and for the scheduling of a final
settlement hearing (collectively, "preliminary approval").
On January 28, 2013, six participants in ESBA filed an objection
to preliminary approval, and cross-moved to intervene in the
action and for permission to file a separate complaint on behalf
of ESBA participants. On February 21, 2013, the court denied the
cross motion of such objecting participants, and the court denied
permission for such objecting participants to file a separate
complaint as part of the class action, other than permission to
join the case by separate counsel solely for the purpose of
supporting the allegation of the objecting participants that the
buyout will deprive non-consenting participants in ESBA of "fair
value" in violation of the New York Limited Liability Company Law.
The court rejected the objecting participants' assertion that
preliminary approval be denied and granted preliminary approval of
the settlement.
Pursuant to a decision issued on April 30, 2013, the court
rejected such allegation and ruled in the Supervisor's favor,
holding that the buyout provisions of the participation agreements
with respect to ESBA are legally binding and enforceable and that
participants do not have the rights that they claimed under the
New York Limited Liability Company Law.
On May 2, 2013, the court held a hearing regarding final approval
of the class action settlement. At the conclusion of the hearing,
the judge stated that it was his intention to approve such
settlement and that he would issue a written decision approving
the settlement. Of the approximately 4,500 participants in all
the subject LLCs and private entities included in the
Consolidation, 12 opted out of the settlement. Those who opted
out will not receive any share of the settlement proceeds, but can
pursue separate claims for monetary damages. They are bound by
the settlement agreement regarding injunctive, declaratory and
other equitable relief, so they cannot seek an injunction to halt
the consolidation or IPO. The settlement will not become final
until resolution of any appeal.
The participants who challenged the buyout provision moved before
the appellate court for a stay of all proceedings relating to the
settlement, including such a stay as immediate interim relief. On
May 1, 2013, their request for immediate interim relief was
denied. On May 13, 2013, the Supervisor filed its brief in
opposition to the motion for a stay.
The participants who challenged the buyout provision have
appealed. Their motion for the stay is still pending and, if they
pursue it, will be submitted to the appellate court for decision.
Any decision on their appeal itself could take many months. The
Supervisor cannot predict the timing or outcome of an appeal
process or any related relief, if such appeal were successful. If
the court's decision were reversed by the appellate court, there
is a risk that it could have a material adverse effect on Empire
State Realty Trust, Inc.
Although there can be no assurance, the Supervisor believes that
the trial court's decision was correct, that it will be upheld on
appeal, and that the appellate court will not grant the motion to
stay the proceedings relating to the class action settlement.
New York-based 60 East 42nd St. Associates L.L.C. acquired in 1958
fee title to One Grand Central Place, formerly known as the
Lincoln Building, in New York and the land there under. The
Company does not operate the Property. The Company leases the
Property to Lincoln Building Associates L.L.C. pursuant to an
operating lease as modified, which is currently set to expire on
September 30, 2033.
ACUITY INSURANCE: Obtains Summary Judgment Ruling in "Siding" Suit
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In THE SIDING AND INSULATION COMPANY, individually and as a class
of similarly-situated persons, Plaintiffs, v. ACUITY INSURANCE
COMPANY, Defendant, CASE NO. 1:12-CV-01574, (N.D. Ohio), District
Judge James S. Gwin granted Acuity's motion for summary judgment
and denied the Siding Company's motion for summary judgment.
In this declaratory judgment action, Siding Company asked the
Court to declare whether Acuity must indemnify the Beachwood Hair
Clinic under a general commercial insurance policy. The dispute
comes from a settlement agreement the Siding Company, Acuity, and
Beachwood reached in a TCPA class action where Beachwood hired a
fax advertiser who sent unsolicited faxes on Beachwood's behalf.
Generally, the Siding Company says Beachwood's faxes are covered
under both the Policy's "advertising injury" and "property damage"
provisions. Responding, Acuity Insurance Company says Beachwood's
faxes are covered only by the Policy's "advertising injury"
provision.
Judge Gwin concluded, among other things, that Acuity is not
obligated to indemnify Beachwood for an additional $2,000,000.
"[B]ecause Beachwood intended its advertiser to send the faxes,
and because Beachwood intended the resulting property damage, the
Court finds that Beachwood expected or intended the property
damage caused by its faxes," he said,
A copy of the District Court's June 26, 2013 Opinion & Order is
available at http://is.gd/blsoMKfrom Leagle.com.
Siding and Insulation Co., Plaintiff, is represented by Brian J.
Wanca, Esq. -- bwanca@andersonwanca.com -- at Anderson & Wanca;
and Scott D. Simpkins, Esq. -- sdsimp@climacolaw.com -- at
Climaco, Lefkowitz, Peca, Wilcox & Garofoli.
Acuity Insurance Company, Defendant, is represented by D. John
Travis, Esq. -- jtravis@gallaghersharp.com -- Gary L. Nicholson,
Esq. -- gnicholson@gallaghersharp.com -- & Jay C. Rice, Esq. --
jrice@gallaghersharp.com -- at Gallagher, Sharp, Fulton & Norman.
ALP LIQUIDATING: "Rothal" Class Suit Still Pending in Florida
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The class action lawsuit styled Rothal v. Arvida/JMB Partners
Ltd., et al., remains pending in Florida, according to ALP
Liquidating Trust's May 13, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On September 30, 2005, Arvida/JMB Partners, L.P. (the
"Partnership") completed its liquidation by contributing all of
its remaining assets to ALP Liquidating Trust ("ALP"), subject to
all of the Partnership's obligations and liabilities. Arvida
Company ("Arvida"), an affiliate of the former general partner of
the Partnership, acts as Administrator (the "Administrator") of
ALP. Arvida/JMB Managers, Inc., is the former General Partner of
the Partnership.
The Partnership, the General Partner and certain related parties
as well as other unrelated parties have been named defendants in
an action entitled Rothal v. Arvida/JMB Partners Ltd. et al., Case
No. 03-10709 CACE 12, filed in the Circuit Court of the 17th
Judicial Circuit in and for Broward County, Florida. In this
lawsuit that was originally filed on or about June 20, 2003, the
plaintiffs purport to bring a class action allegedly arising out
of construction defects occurring during the development of
Camellia Island in Weston, which has approximately 150 homes. On
May 9, 2005, the plaintiffs filed a nine count second amended
complaint seeking unspecified general damages, special damages,
statutory damages, prejudgment and post-judgment interest, costs,
attorneys' fees, and such other relief as the court may deem just
and proper. The Plaintiffs complain, among other things, that the
homes were not adequately built, that the homes were not built in
conformity with the South Florida Building Code and plans on file
with Broward County, Florida, that the roofs were not properly
attached or were inadequate, that the truss systems and
installation thereof were improper, and that the homes suffer from
improper shutter storm protection systems. The Plaintiffs have
filed a motion to expand the class to include other homes in
Weston. The motion to expand the class was denied.
The case went to mediation on March 11, 2010. The case did not
settle. The Arvida defendants have filed their answer to the
amended complaint. The Arvida defendants believe that they have
meritorious defenses and intend to vigorously defend themselves.
The court concluded its hearings on the motion to certify the
class covering the homes in Camellia Island and certified the
class by order dated September 16, 2010. On October 15, 2010, the
Partnership filed its notice of appeal challenging the
certification order. On June 1, 2011, the appellate court
affirmed the trial court's order certifying the class. The case
has been returned to the trial court for further proceedings
including trial. The defense of the case is proceeding.
The Partnership intends to vigorously defend itself. The
Partnership is not able to determine what, if any, loss exposure
that it may have for this matter. This case has been tendered to
one of the Partnership's insurance carriers, Zurich American
Insurance Company (together with its affiliates collectively,
"Zurich"), for defense and indemnity. Zurich is providing a
defense of this matter under a purported reservation of rights.
The Partnership has also engaged other counsel in connection with
this lawsuit. The ultimate legal and financial liability of the
Partnership, if any, in this matter cannot be estimated with
certainty at this time. The Partnership is unable to determine
the ultimate portion of the expenses, fees and damages, if any,
which will be covered by its insurance.
ALP Liquidating Trust was organized in Delaware and is
headquartered in Chicago, Illinois. ALP is the liquidating trust
of Arvida/JMB Partners, L.P.
AMERICAN GREETINGS: Awaits OK of Pact in "Baker," "Collier" Suits
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American Greetings Corporation is awaiting approval of its $12.5
million settlement of lawsuits over corporate-owned life
insurance, according to the company's May 9, 2013, Form 10-K
filing with the U.S. Securities and Exchange Commission for the
year ended February 28, 2013.
American Greetings Corporation is a defendant in two putative
class action lawsuits involving corporate-owned life insurance
policies (the "Insurance Policies"): one filed in the Northern
District of Ohio on January 11, 2012 by Theresa Baker as the
personal representative of the estate of Richard Charles Wolfe
(the "Baker Litigation"); and the other filed in the Northern
District of Oklahoma on October 1, 2010 by Keith Collier as the
personal representative of the estate of Ruthie Collier (the
"Collier Litigation").
In the Baker Litigation, the plaintiff claims that American
Greetings Corporation (1) misappropriated its employees' names and
identities to benefit itself; (2) breached its fiduciary duty by
using its employees' identities and personal information to
benefit itself; (3) unjustly enriched itself through the receipt
of corporate-owned life insurance policy benefits, interest and
investment returns; and (4) improperly received insurance policy
benefits for the insurable interest in Mr. Wolfe's life.
The plaintiff seeks damages in the amount of all pecuniary
benefits associated with the subject Insurance Policies, including
investment returns, interest and life insurance policy benefits
that American Greetings Corporation received from the deaths of
the former employees whose estates form the putative class.
In the Collier Litigation, the plaintiff claims that American
Greetings Corporation did not have an insurable interest when it
obtained the subject Insurance Policies and wrongfully received
the benefits from those policies. The plaintiff seeks damages in
the amount of policy benefits received by American Greetings
Corporation from the subject Insurance Policies, as well as
attorney's fees, costs and interest.
On April 2, 2012, the plaintiff filed its First Amended Complaint,
adding misappropriation of employee information and breach of
fiduciary duty claims as well as seeking punitive damages. On
April 20, 2012, American Greetings Corporation moved to transfer
the Collier Litigation to the Northern District of Ohio, where the
Baker Litigation is pending. On July 6, 2012, the court granted
American Greetings Corporation's Motion to Transfer and
transferred the case to the Northern District of Ohio, where the
Baker Litigation is pending.
On January 24, 2013, the parties reached a settlement in principle
in both cases that, if approved by the Court, will fully and
finally resolve all of the claims of the Wolfe and Collier
estates, as well as the classes they seek to represent.
The settlement was a product of extensive negotiations and a
private mediation. It anticipates that the Court will consolidate
the two cases and certify a single class that consists of the
heirs or estates of the estates and heirs of all former American
Greetings Corporation employees (i) who are deceased; (ii) who
were not officers or directors of American Greetings; (iii) who
were insured under one of the following corporate-owned life
insurance plans: Provident Life & Accident 61153, Provident Life &
Accident 61159, Mutual Benefit Life Insurance Company 111,
Connecticut General ENX219, and Hartford Life Insurance Company
361; and (iv) for whom American Greetings has received a death
benefit on or before the date on which the Court enters the Order
of Preliminary Approval.
If finally approved by the Court, American Greetings Corporation
will deposit $12.5 million into a settlement fund to be
distributed in its entirety to those members of the class who
present valid claims, their counsel, and a settlement
administration vendor. On April 19, 2013, the parties filed a
joint motion seeking the Court's preliminary approval of the
settlement and are awaiting the Court's approval of the
settlement. If and when the settlement is approved, notice will be
provided to potential class members, a hearing will be held, and
the Court will entertain final approval of the settlement.
AMERICAN GREETINGS: Faces Consolidated Claim Over Privatization
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The Counsel for the Lead Plaintiffs in In re American Greetings
Corp. Shareholder Litigation, Lead Case No. CV 12 792421 filed a
Consolidated Class Action Complaint that brings a single class
claim in relation to the company's Going Private plan, according
to the company's May 9, 2013, Form 10-K filing with the U.S.
Securities and Exchange Commission for the year ended February 28,
2013.
On September 26, 2012, the Corporation announced that the Board of
Directors had received a Going Private Proposal. On September 27,
2012, Dolores Carter, a purported shareholder, filed a putative
shareholder derivative and class action lawsuit (the "Carter
Action") in the Court of Common Pleas in Cuyahoga County, Ohio
(the "Cuyahoga County Court"), against American Greetings
Corporation and all of the members of the Board of Directors
("Carter Defendants").
The Carter Action alleges, among other things, that the directors
of the Corporation breached their fiduciary duties owed to
shareholders in evaluating and pursuing the proposal. The Carter
Action further alleges claims for aiding and abetting breaches of
fiduciary duty. Among other things, the Carter Action seeks
declaratory relief.
Subsequently, six more lawsuits were filed in the Cuyahoga County
Court purporting to advance substantially similar claims on behalf
of American Greetings against the members of the Board of
Directors and, in certain cases, additional direct claims against
American Greetings.
One lawsuit was voluntarily dismissed. The other lawsuits, which
remain pending, were consolidated by Judge Richard J. McMonagle on
December 6, 2012 (amended order dated December 18, 2012) as In re
American Greetings Corp. Shareholder Litigation, Lead Case No. CV
12 792421. Lead Plaintiffs and Lead Plaintiffs' Counsel also were
appointed. Lead Plaintiffs' Counsel has served written discovery
on the Corporation and has communicated its intent to file a
motion for a preliminary injunction to prevent a merger with
Century Intermediate Holding Company from moving forward.
On April 30, 2013, Lead Plaintiffs' Counsel also filed a
Consolidated Class Action Complaint. The Consolidated Complaint
brings a single class claim against the defendants for breach of
fiduciary duties and aiding and abetting. The plaintiffs allege
that the preliminary proxy statement on Schedule 14A filed with
the SEC on April 17, 2013 omits information necessary to permit
the Corporation's shareholders to determine if the Merger is in
their best interest, that the controlling shareholders have abused
their control of the Corporation, that the special committee
appointed to oversee the transaction is not independent, and that
the other members of the board are also not independent.
AMERICAN GREETINGS: LMPERS to Abandon Appeal on Dismissal of Suit
-----------------------------------------------------------------
Counsel for the suit filed by the Louisiana Municipal Police
Employees' Retirement System against American Greetings
Corporation intends to voluntarily dismiss its appeal against the
dismissal of the suit after a voluntary dismissal of a similar
appeal by R. David Wolfe, according to the company's May 9, 2013,
Form 10-K filing with the U.S. Securities and Exchange Commission
for the year ended February 28, 2013.
On November 6, 2012, R. David Wolfe, a purported shareholder,
filed a putative class action (the "Wolfe Action") in the United
States District Court for the Northern District of Ohio (the
"Federal Court") against certain members of the Weiss Family and
the Irving I. Stone Oversight Trust, the Irving Stone Limited
Liability Company, the Irving I. Stone Support Foundation, and the
Irving I. Stone Foundation ("Stone Entities") alleging breach of
fiduciary duties in proposing and pursuing a Going Private
Proposal, as well as against American Greetings, seeking, among
other things, declaratory relief.
Shortly thereafter, on November 9, 2012, the Louisiana Municipal
Police Employees' Retirement System also filed a purported class
action in the Federal Court (the "LMPERS Action") asserting
substantially similar claims against the same defendants and
seeking substantially similar relief.
On November 30, 2012, plaintiffs in the Wolfe and LMPERS Actions
filed motions (1) to consolidate the Wolfe and LMPERS Actions, (2)
for appointment as co-lead plaintiffs, (3) for appointment of co-
lead counsel, and, in the Wolfe Action only, (4) for partial
summary judgment. On December 14, 2012, the Corporation filed its
oppositions to the motions (a) to consolidate the Wolfe and LMPERS
Actions, (b) for appointment as co-lead plaintiffs, and (c) for
appointment of co-lead counsel. On the same day, the Corporation
also moved to dismiss both the Wolfe and LMPERS Actions. The
Corporation answered both complaints on January 8, 2013, and on
January 11, 2013, it filed its opposition to the motion for
partial summary judgment.
On February 14, 2013, the Federal Court dismissed both the Wolfe
and LMPERS Actions for lack of subject matter jurisdiction. On
March 15, 2013, plaintiffs in both the Wolfe and LMPERS Actions
filed notices of appeal with the Sixth Circuit Court of Appeals.
Wolfe subsequently moved to voluntarily dismiss his appeal on
April 18, 2013, and the Sixth Circuit granted his motion the
following day. On May 5, 2013, counsel for LMPERS advised the
Corporation that it intends to voluntarily dismiss its appeal as
well.
Plaintiffs in the Wolfe and LMPERS Actions alleged, in part, that
Article Seventh of the Corporation's articles of incorporation
prohibited the special committee from, among other things,
evaluating a merger with Century Intermediate Holding Company. The
Corporation considered these allegations and concluded that the
Article is co-extensive with Ohio law and thus allows the
Corporation to engage in any activity authorized by Ohio law. The
Corporation also has consistently construed Article Seventh as
permitting directors to approve a transaction so long as they are
both disinterested and independent.
AMERICAN GREETINGS: Faces "Wolfe Action II" Over Century Merger
---------------------------------------------------------------
American Greetings Corporation faces a second lawsuit filed by R.
David Wolfe ("Wolfe Action II") in the United States District
Court for the Northern District of Ohio challenging a merger with
Century Intermediate Holding Company, according to American
Greetings' May 9, 2013, Form 10-K filing with the U.S. Securities
and Exchange Commission for the year ended February 28, 2013.
On April 17, 2013, R. David Wolfe filed a new derivative and
putative class action ("Wolfe Action II") in the United States
District Court for the Northern District of Ohio against the
Corporation's directors, certain members of the Weiss Family, and
the Stone Entities, as well as the Corporation as a nominal
defendant. Mr. Wolfe subsequently filed an Amended Complaint on
April 29, 2013.
The Wolfe Action II seeks a declaratory judgment that Article
Seventh precludes the board and special committee from approving a
merger with Century Intermediate Holding Company. In addition, the
Wolfe Action II includes a derivative claim for breach of
fiduciary duty against the Corporation's directors for allegedly
violating Article Seventh.
Finally, the Wolfe Action II includes both a derivative and class
action claim for breach of fiduciary duty against the Weiss Family
defendants and the Stone Entities for allegedly seeking to acquire
the minority shareholders' interests at an unfair price. The
Corporation's response to the Wolfe Action II is not yet due.
AMERICAN HOME: Denial of Chaffin's Bid for Matrix Benefit Affirmed
------------------------------------------------------------------
Janice M. Chaffins (claimant), a class member under the Diet Drug
Nationwide Class Action Settlement Agreement with Wyeth, seeks
benefits from the AHP Settlement Trust. Based on the record
developed in the show cause process, the Court must determine
whether the claimant has demonstrated a reasonable medical basis
to support her claim for Matrix Compensation Benefits.
In a memorandum in support of separate pretrial order 9098,
District Judge Harvey Bartle, III of the United States District
Court for the Eastern District of Pennsylvania, ruled that the
claimant's arguments are without merit. Contrary to claimant's
assertion, the opinions of her cardiologists do not provide a
reasonable medical basis for her claim, he said.
"[W]e conclude that claimant has not met her burden of proving
that there is a reasonable medical basis for finding that she had
moderate mitral regurgitation. Therefore, we will affirm the
Trust's denial of the claim of Ms. Chaffins for Matrix Benefits,"
Judge Bartle ruled.
The case is:
IN RE: DIET DRUGS (PHENTERMINE/FENFLURAMINE/DEXFENFLURAMINE)
PRODUCTS LIABILITY LITIGATION. CIVIL ACTION NO. 99-20593, NO. 2:16
MD 1203. THIS DOCUMENT RELATES TO: SHEILA BROWN, et al. v.
AMERICAN HOME PRODUCTS CORPORATION.
A copy of the District Court's June 26, 2013 Memorandum is
available at http://is.gd/PWh21Jfrom Leagle.com.
IN RE: DIET DRUGS (PHENTERMINE, FENFLURAMINE, DEXFENFLURAMINE)
PRODUCTS LIABILITY LITIGATION, represented by ANDREW A. CHIRLS --
achirls@finemanlawfirm.com -- at FINEMAN KREKSTEIN & HARRIS PC,
ARNOLD LEVIN -- ALevin@LFSBLaw.com -- at LEVIN FISHBEIN SEDRAN &
BERMAN, GERALD COOPER KELL -- gerald.kell@usdoj.gov -- at U.S.
DEPARTMENT OF JUSTICE, JOHN FITZPATRICK, at HARNES DICKET PIERCE
PLC, JULES S. HENSHELL -- jhenshell@sogtlaw.com -- at SEMANOFF
ORMSKY GREENBERG & TORCHIA LLC, ROBB W. PATRYK --
patryk@hugheshubbard.com -- at HUGHES HUBBARD AND REED, ROBERT A.
LIMBACHER -- rlimbacher@gdldlaw.com -- at Goodell, DeVries, Leech
& Dann LLP, ROBERT N. SPINELLI -- rspinelli@kjmsh.com -- KELLEY
JASONS MCGOWAN SPINELLI & HANNA, LLP, THEODORE V. MAYER --
mayer@hugheshubbard.com -- at HUGHES HUBBARD AND REED & RAND NOLEN
-- rand_nolen@fleming-law.com -- at FLEMING, NOLEN & JEZ LLP.
GREGORY P. MILLER, Special Master, is represented by GREGORY P.
MILLER -- Gregory.Miller@dbr.com -- at DRINKER BIDDLE & REATH LLP.
ATLANTIC POWER: Sued in US, Canada Over Misleading Statements
-------------------------------------------------------------
In March, April and May 2013, several purported securities class
action complaints related to, among other things, claims that
Atlantic Power Corporation made materially false and misleading
statements and omissions regarding the sustainability of its
common share dividend were filed in the United States, Ontario and
Quebec against the Company and certain of its current and former
executive officers, the Company said in a May 9, 2013, Form 8-K/A
filing with the U.S. Securities and Exchange Commission.
BANCORPSOUTH INC: 11th Cir. Denies Bid to Appeal
------------------------------------------------
The Eleventh Circuit Court of Appeals denied the petition of
BancorpSouth, Inc. for leave to appeal the certification of a
class in the case over overdraft fees filed against it, according
to the company's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
On May 18, 2010, the Bank was named as a defendant in a class
action lawsuit filed by an Arkansas customer of the Bank in the
U.S. District Court for the Northern District of Florida. The suit
challenges the manner in which overdraft fees were charged and the
policies related to posting order of debit card and ATM
transactions.
The suit also makes a claim under Arkansas' consumer protection
statute. The plaintiff is seeking to recover damages in an
unspecified amount and equitable relief. The case was transferred
to pending multi-district litigation in the U.S. District Court
for the Southern District of Florida.
On May 4, 2012, the judge presiding over the multi-district
litigation entered an order certifying a class in this case and on
March 4, 2013, the Eleventh Circuit Court of Appeals denied the
Bank's petition for leave to appeal the class certification order.
Notice to the certified class was sent, on or about May 3, 2013,
primarily informing the class of the right to opt-out of the class
and setting a deadline for same. There are significant
uncertainties involved in any purported class action litigation.
CARBO CERAMICS: Court Dismisses Amended Securities Class Action
---------------------------------------------------------------
Judge Louis L. Stanton of the United States District Court for the
Southern District of New York granted a motion to dismiss the
consolidated amended complaint in In re CARBO CERAMICS, INC. STOCK
AND OPTIONS SECURITIES LITIGATION, NO. 12 CIV. 1034 (LLS).
In this consolidated securities class action, plaintiffs --
investors in common stock and options contracts of Carbo Ceramics,
Inc. who purchased or sold those securities between October 27,
2011 and January 26, 2012 -- assert claims against defendants
Carbo, Gary Kolstad, and Ernesto Bautista for violations of
section 10(b) of the Securities Exchange Act of 1934 and rule
10b-5 thereunder, and against individual defendants under section
20(a) of the Exchange Act as "control persons" of Carbo.
The elements of a claim under section 10(b) and rule 10b-5 are
that the defendants "(1) made misstatements or omissions of
material fact; (2) with scienter; (3) in connection with the
purchase or sale of securities; (4) upon which plaintiffs relied;
and (5) that plaintiffs' reliance was the proximate cause of their
injury."
The Plaintiffs allege that the defendants made materially
misleading statements about the impact on Carbo of a shift in the
hydraulic fracking industry's focus from the extraction of natural
gas to liquid oil.
The Defendants moved under Fed. R. Civ. P. 12(b) (6), 9(b), and
the Private Securities Litigation Reform Act of 1995, 15 U.S.C.
78u-4(b) (3) (A) (2006), to dismiss the amended consolidated
complaint.
"In light of my holding that Carbo sufficiently disclosed the
allegedly adverse information, it is unclear whether a second
amended complaint would be useful or futile. Plaintiffs may move
for leave to serve a second amended complaint, attaching their
proposed second amended complaint to the motion," Judge Stanton
concluded.
A copy of the District Court's June 26, 2013 Opinion and Order
is available at http://is.gd/iccJlQfrom Leagle.com.
Richard Goldman, Lead Plaintiff, is represented by Samuel Howard
Rudman, Esq. -- SRudman@rgrdlaw.com -- Fainna Kagan, Esq. --
fkagan@rgrdlaw.com -- and Mario Alba, Jr., Esq. --
malba@rgrdlaw.com -- at Robbins Geller Rudman & Dowd LLP.
Michael Peroco, Lead Plaintiff, is represented by Samuel Howard
Rudman, Esq., and Fainna Kagan, Esq., at Robbins Geller Rudman &
Dowd LLP; Francis Paul McConville, Esq. --
fmcconville@faruqilaw.com -- Faruqi & Faruqi, LLP; Mario Alba,
Jr., Esq., at Robbins Geller Rudman & Dowd LLP; and Richard
William Gonnello, Esq. -- rgonnello@faruqilaw.com -- at Faruqi &
Faruqi, LLP.
Brian P. Henderson, Plaintiff, is represented by Samuel Howard
Rudman, Esq., and Fainna Kagan, Esq., at Robbins Geller Rudman &
Dowd LLP, Jeffrey A. Berens, Esq. -- jeff@dyerberens.com -- at
Dyer & Berens L.L.P.; and Michael Ira Fistel, Jr., Esq. --
mfistel@holzerlaw.com -- at Holzer Holzer & Fistel, LLC.
Defendants Carbo Ceramics, Inc., Gary Kolstad and Ernesto Bautista
are represented by Breon Stacey Peace, Esq. -- bpeace@cgsh.com --
David E. Brodsky, Esq. -- maofiling@cgsh.com -- Roger Allen
Cooper, Esq. -- racooper@cgsh.com -- Elizabeth Vicens, Esq. --
evicens@cgsh.com -- and Laura Amber Zuckerwise, Esq. --
lzuckerwise@cgsh.com -- at Cleary Gottlieb Steen & Hamilton, LLP.
EMPIRE STATE: Bid to Stay in Consolidated Suit Remains Pending
--------------------------------------------------------------
A motion for stay of all proceedings relating to the settlement in
the consolidated class action lawsuit pending in New York remains
pending, according to Empire State Building Associates L.L.C.'s
May 13, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
Empire State Building Associates L.L.C. was originally organized
on July 11, 1961, as a general partnership. On October 1, 2001,
the Company converted to a limited liability company under New
York law. The conversion did not change any aspect of the assets
and operations of the Company other than to protect its investors
from any future liability to a third party. Through April 16,
2002, the Company owned the tenant's interest in a master
operating leasehold (the "Master Lease") of the Empire State
Building (the "Building"), located at 350 Fifth Avenue, in New
York. On April 17, 2002, the Company acquired, through a wholly-
owned limited liability company (Empire State Land Associates
L.L.C.), the fee title to the Building, and the land thereunder
(the "Land") (together, the "Real Estate" or "Property"), at a
price of $57,500,000, and obtained a $60,500,000 first mortgage
with Capital One Bank to finance the acquisition and certain
related costs.
The Company does not operate the Building, and subleases the
Building to Empire State Building Company L.L.C. (the "Sublessee")
pursuant to a net operating sublease (the "Sublease") which
included an initial term which expired on January 4, 1992. The
Company's members are Peter L. Malkin, Anthony E. Malkin and
Thomas N. Keltner, Jr. (collectively, the "Agents"), each of whom
also acts as an agent for holders of participations in his
respective member interest in the Company (the "Participants").
Sublessee is a New York limited liability company in which Peter
L. Malkin is a member and entities for Peter L. Malkin's family
members are beneficial owners. All of the Members in the Company
hold senior positions at Malkin Holdings LLC ("Malkin Holdings" or
the "Supervisor") (formerly Wien & Malkin LLC), which provides
supervisory and other services to the Company and to Sublessee.
In March 2012, five putative class actions, or the Class Actions,
were filed in New York State Supreme Court, New York County, by
Participants in Empire State Building Associates L.L.C. ("ESBA")
and several other entities supervised by the Supervisor (on
March 1, 2012, March 7, 2012, March 12, 2012, March 14, 2012, and
March 19, 2012). The plaintiffs assert claims against Malkin
Holdings LLC, Malkin Properties, L.L.C., Malkin Properties of New
York, L.L.C., Malkin Properties of Connecticut, Inc., Malkin
Construction Corp., Anthony E. Malkin, Peter L. Malkin, the Estate
of Leona M. Helmsley, Empire State Realty OP, L.P. and Empire
State Realty Trust, Inc. for breach of fiduciary duty, unjust
enrichment, and/or aiding and abetting breach of fiduciary duty.
They allege, among other things, that the terms of the
Consolidation and the process by which it was structured
(including the valuation that was employed) are unfair to the
participants in the existing entities, the Consolidation provides
excessive benefits to Malkin Holdings and its affiliates and the
then-draft prospectus/consent solicitation filed with the SEC
failed to make adequate disclosure to permit a fully informed
decision about the proposed Consolidation. The complaints seek
money damages and injunctive relief preventing the proposed
Consolidation. The actions were consolidated and co-lead
plaintiffs' counsel were appointed by the New York State Supreme
Court by order dated June 26, 2012. Furthermore, an underlying
premise of the Class Actions, as noted in discussions among
plaintiffs' counsel and defendants' counsel, was that the
Consolidation had been structured in such a manner that would
cause participants in ESBA, 60 East 42nd St. Associates L.L.C. and
250 West 57th St. Associates L.L.C. (the "subject LLCs")
immediately to incur substantial tax liabilities.
The parties entered into a Stipulation of Settlement dated
September 28, 2012, resolving the Class Actions. The Stipulation
of Settlement recites that the Consolidation was approved by
overwhelming consent of the participants in the private entities.
The Stipulation of Settlement states that counsel for the
plaintiff class satisfied themselves that they have received
adequate access to relevant information, including the independent
valuer's valuation process and methodology, that the disclosures
in the Registration Statement on Form S-4, as amended, are
appropriate, that the transaction presents potential benefits,
including the opportunity for liquidity and capital appreciation,
that merit the participants' serious consideration and that each
of named class representatives intends to support the transaction
as modified. The Stipulation of Settlement further states that
counsel for the plaintiff class are satisfied that the claims
regarding tax implications, enhanced disclosures, appraisals and
exchange values of the properties that would be consolidated into
Empire State Realty Trust, Inc., and the interests of the
participants in the subject LLCs and the private entities, have
been addressed adequately, and they have concluded that the
settlement pursuant to the Stipulation of Settlement and
opportunity to consider the proposed transaction on the basis of
revised consent solicitations are fair, reasonable, adequate and
in the best interests of the plaintiff class.
The defendants in the Stipulation of Settlement denied that they
committed any violation of law or breached any of their duties and
did not admit that they had any liability to the plaintiffs.
The terms of the settlement include, among other things (i) a
payment of $55 million, with a minimum of 80% in cash and maximum
of 20% in freely-tradable shares of common stock and/or freely-
tradable operating partnership units (all of which will be paid by
affiliates of Malkin Holdings (provided that none of Malkin
Holdings and its affiliates that would become a direct or indirect
subsidiary of Empire State Realty Trust, Inc. in the Consolidation
will have any liability for such payment) and the Estate of Leona
M. Helmsley and certain participants in the private entities who
agree to contribute) to be distributed, after reimbursement of the
plaintiffs' counsel's court-approved expenses and payment of the
plaintiffs' counsel's court-approved attorneys' fees and, in the
case of shares of common stock and/or operating partnership units,
after the termination of specified lock-up periods, to
participants in the subject LLCs and the private entities pursuant
to a plan of allocation to be prepared by counsel for the
plaintiffs; (ii) the defendants' agreement that (a) the IPO will
be on the basis of a firm commitment underwriting; (b) if, during
the solicitation period, any of the three subject LLC's percentage
of total exchange value is lower than what is stated in the final
prospectus/consent solicitation by 10% or more, such decrease will
be promptly disclosed by defendants to participants in the subject
LLCs; and (c) unless total gross proceeds of $600,000,000 are
raised in the IPO, defendants will not proceed with the
transaction without further approval of the subject LLCs; and
(iii) the defendants' agreement to make additional disclosures in
the prospectus/consent solicitation regarding certain matters
(which are included therein). The Defendants have also
acknowledged the work of the plaintiffs and their counsel was a
material factor in the defendants' implementation of the change in
the Consolidation that, as originally proposed, would have
required the exchange of participation interests for Class A
common stock, which are taxable on receipt, and that now permits
participants instead to elect to receive operating partnership
units and Class B common stock, which permit tax deferral. The
Participants in the subject LLCs and private entities will not be
required to bear any portion of the settlement payment. The
payment in settlement of the Class Actions will be made by the
Estate of Leona M. Helmsley and affiliates of Malkin Holdings
(provided that none of Malkin Holdings and its affiliates that
would become a direct or indirect subsidiary of Empire State
Realty Trust, Inc. in the Consolidation will have any liability
for such payment) and certain participants in the private entities
who agree to contribute. The Registrant will not bear any of the
settlement payment.
The settlement further provides for the certification of a class
of participants in the three subject LLCs and all of the private
entities, other than defendants and other related persons and
entities, and a release of any claims of the members of the class
against defendants and related persons and entities, as well as
underwriters and other advisors. The release in the settlement
excludes certain claims, including but not limited to, claims
arising from or related to any supplement to the Registration
Statement on Form S-4 that is declared effective to which the
plaintiffs' counsel objects in writing, which objection will not
be unreasonably made or delayed, so long as plaintiffs' counsel
has had adequate opportunity to review such supplement. The
settlement is subject to court approval. It is not effective
until such court approval is final, including the resolution of
any appeal. The Defendants continue to deny any wrongdoing or
liability in connection with the allegations in the Class Actions.
On January 18, 2013, the parties jointly moved for preliminary
approval of such settlement, for permission to send notice of the
settlement to the class, and for the scheduling of a final
settlement hearing (collectively, "preliminary approval").
On January 28, 2013, six participants in ESBA filed an objection
to preliminary approval, and cross-moved to intervene in the
action and for permission to file a separate complaint on behalf
of ESBA participants. On February 21, 2013, the court denied the
cross motion of such objecting participants, and the court denied
permission for such objecting participants to file a separate
complaint as part of the class action, other than permission to
join the case by separate counsel solely for the purpose of
supporting the allegation of the objecting participants that the
buyout will deprive non-consenting participants in ESBA of "fair
value" in violation of the New York Limited Liability Company Law.
The court rejected the objecting participants' assertion that
preliminary approval be denied and granted preliminary approval of
the settlement.
Pursuant to a decision issued on April 30, 2013, the court
rejected such allegation and ruled in the Supervisor's favor,
holding that the buyout provisions of the participation agreements
with respect to ESBA are legally binding and enforceable and that
participants do not have the rights that they claimed under the
New York Limited Liability Company Law.
On May 2, 2013, the court held a hearing regarding final approval
of the class action settlement. At the conclusion of the hearing,
the judge stated that it was his intention to approve such
settlement and that he would issue a written decision approving
the settlement. Of the approximately 4,500 participants in all
the subject LLCs and private entities included in the
consolidation, 12 opted out of the settlement. Those who opted
out will not receive any share of the settlement proceeds, but can
pursue separate claims for monetary damages. They are bound by
the settlement agreement regarding injunctive, declaratory and
other equitable relief, so they cannot seek an injunction to halt
the consolidation or IPO. The settlement will not become final
until resolution of any appeal.
The participants who challenged the buyout provision moved before
the appellate court for a stay of all proceedings relating to the
settlement, including such a stay as immediate interim relief. On
May 1, 2013, their request for immediate interim relief was
denied. On May 13, 2013, the Supervisor filed its brief in
opposition to the motion for a stay.
The participants who challenged the buyout provision have
appealed. Their motion for the stay is still pending and, if they
pursue it, will be submitted to the appellate court for decision.
Any decision on their appeal itself could take many months. The
Supervisor cannot predict the timing or outcome of an appeal
process or any related relief, if such appeal were successful. If
the court's decision were reversed by the appellate court, there
is a risk that it could have a material adverse effect on Empire
State Realty Trust, Inc.
Although there can be no assurance, the Supervisor believes that
the trial court's decision was correct, that it will be upheld on
appeal, and that the appellate court will not grant the motion to
stay the proceedings relating to the class action settlement.
Empire State Building Associates L.L.C. was originally organized
in 1961 as a general partnership. In 2001, the Company converted
to a limited liability company under New York law. Through April
2002, the Company owned the tenant's interest in a master
operating leasehold of the Empire State Building. Also in April
2002, the Company acquired the fee title to the Building, and the
land thereunder.
F.N.B. CORPORATION: Wins Approval of Deal in Overdraft Fees Suit
----------------------------------------------------------------
The United States District Court for the Western District of
Pennsylvania granted preliminary approval to the proposed
settlement of the consolidated Ord and Clarey Actions (Civil
Action No. 2:12-cv-00766-AJS) filed against F.N.B. Corporation,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On June 5, 2012, the Corporation was named as a defendant in a
purported class action lawsuit entitled Ord v. F.N.B. Corporation,
Civil Action No. 2:12-cv-00766-AJS, filed in the United States
District Court for the Western District of Pennsylvania (the Ord
Action).
The Ord Action alleged state law claims related to FNBPA's order
of posting ATM and debit card transactions and the assessment of
overdraft fees on deposit customer accounts. On August 14, 2012,
First National Bank of Pennsylvania (FNBPA) was named as a
defendant in a purported class action lawsuit entitled Clarey v.
First National Bank of Pennsylvania, Civil Action No. GD-12-
014512, filed in the Court of Common Pleas of Allegheny County,
Pennsylvania (the Clarey Action).
The Clarey action alleged claims and requested relief similar to
the claims asserted and the relief sought in the Ord Action. On
September 11, 2012, FNBPA removed the Clarey Action to the United
States District Court for the Western District of Pennsylvania,
Civil Action No. 2:12-cv-01305-AJS. On September 17, 2012, the
plaintiffs in the Ord Action filed an amended complaint in which
they added FNBPA as a defendant with the Corporation. On September
27, 2012, the United States District Court for the Western
District of Pennsylvania consolidated the Ord and Clarey Actions
at Civil Action No. 2:12-cv-00766-AJS.
On October 19, 2012, the parties to the Ord and Clarey Actions
participated in a mediation required pursuant to the local rules
of the court. On October 22, 2012, the parties filed a Joint
Motion to Stay Pending Settlement Approval requesting that the
court stay all proceedings due to the parties having reached an
agreement in principle, subject to the preparation and execution
of a mutually acceptable settlement agreement and release, to
fully, finally and completely settle, resolve, discharge and
release all claims that have been or could have been asserted in
the Ord and Clarey Actions on a class-wide basis.
The proposed settlement contemplates that, in return for a full
and complete release of claims by the plaintiffs and the
settlement class members, FNBPA will create a settlement fund of
$3,000 for distribution to the settlement class members after
certain court-approved reductions, including for attorney's fees
and expenses. Amounts related to the proposed settlement were
accrued for in October 2012 and funded in February 2013.
On February 12, 2013, the court granted preliminary approval of
the proposed settlement, which is subject to final court approval,
and scheduled a final fairness hearing for June 21, 2013.
FANNIE MAE: Reaches Agreement to Settle Consolidated Stock Suit
---------------------------------------------------------------
Federal National Mortgage Association filed a stipulation of
settlement with the U.S. District Court for the District of
Columbia in relation to a consolidated securities action filed
against it, according to Fannie Mae's May 9, 2013, Form 10-Q
filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
Fannie Mae is a defendant in a consolidated class action lawsuit
initially filed in 2004 and currently pending in the U.S. District
Court for the District of Columbia. In the consolidated complaint
filed in 2005, lead plaintiffs Ohio Public Employees Retirement
System and State Teachers Retirement System of Ohio allege that
the company and certain former officers, as well as the company's
former outside auditor, made materially false and misleading
statements in violation of Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934, and SEC Rule 10b-5 promulgated
thereunder.
Plaintiffs contend that Fannie Mae's accounting statements were
inconsistent with GAAP requirements relating to hedge accounting
and the amortization of premiums and discounts, and seek
unspecified compensatory damages, attorneys' fees, and other fees
and costs. On January 7, 2008, the court defined the class as all
purchasers of Fannie Mae common stock and call options and all
sellers of publicly traded Fannie Mae put options during the
period from April 17, 2001 through December 22, 2004.
On October 17, 2008, FHFA, as conservator for Fannie Mae,
intervened in this case. In September and December 2010,
plaintiffs served expert reports claiming damages to plaintiffs
under various scenarios ranging cumulatively from $2.2 billion to
$8.6 billion. In 2011, the parties filed various motions for
summary judgment.
On September 20, 2012, the court granted summary judgment to
defendant Franklin D. Raines, Fannie Mae's former Chief Executive
Officer, on all claims against him. On October 16, 2012, the court
granted summary judgment to defendant J. Timothy Howard, Fannie
Mae's former Chief Financial Officer, on all claims against him.
On November 20, 2012, the court granted summary judgment to
defendant Leanne Spencer, Fannie Mae's former Controller, on all
claims against her.
On April 10, 2013, the parties reached an agreement in principle
to settle this litigation, subject to court approval. Fannie Mae's
portion of the proposed settlement will not have a material impact
on the company's results of operations or financial condition. On
May 7, 2013, the parties filed a stipulation of settlement with
the court.
FANNIE MAE: Consolidated Securities, ERISA Suits in Discovery
-------------------------------------------------------------
Discovery is ongoing in In re Fannie Mae 2008 Securities
Litigation and In re 2008 Fannie Mae ERISA Litigation that were
consolidated by the Judicial Panel on Multidistrict Litigation,
according to Federal National Mortgage Association's May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Fannie Mae is a defendant in two consolidated class actions filed
in 2008 and currently pending in the U.S. District Court for the
Southern District of New York -- In re Fannie Mae 2008 Securities
Litigation and In re 2008 Fannie Mae ERISA Litigation.
On February 11, 2009, the Judicial Panel on Multidistrict
Litigation ordered that the cases be coordinated for pretrial
proceedings.
In re Fannie Mae 2008 Securities Litigation
In a consolidated amended complaint filed on June 22, 2009, lead
plaintiffs Massachusetts Pension Reserves Investment Management
Board and Boston Retirement Board (for common shareholders) and
Tennessee Consolidated Retirement System (for preferred
shareholders) allege that the company certain of the company's
former officers, and certain of the company's underwriters
violated Sections 12(a)(2) and 15 of the Securities Act of 1933.
Lead plaintiffs also allege that the company certain of the
company's former officers, and the company's outside auditor,
violated Sections 10(b) (and Rule 10b-5 promulgated thereunder)
and 20(a) of the Securities Exchange Act of 1934.
Lead plaintiffs seek various forms of relief, including
rescission, damages, interest, costs, attorneys' and experts'
fees, and other equitable and injunctive relief. On October 13,
2009, the Court entered an order allowing FHFA to intervene.
In 2009, the Court granted the defendants' motion to dismiss the
Securities Act claims as to all defendants.
In 2010, the Court granted in part and denied in part the
defendants' motions to dismiss the Securities Exchange Act claims.
As a result of the partial denial, some of the Securities Exchange
Act claims remained pending against the company and certain of the
company's former officers. Fannie Mae filed its answer to the
consolidated complaint on December 31, 2010. In 2011, lead
plaintiffs filed motions to certify a class of persons who,
between November 8, 2006 and September 5, 2008, inclusive,
purchased or acquired (a) Fannie Mae common stock and options or
(b) Fannie Mae preferred stock.
Plaintiffs filed a second amended joint consolidated class action
complaint on March 2, 2012 and added FHFA as a defendant. On
August 30, 2012, the court denied defendants' motions to dismiss
the second amended complaint, allowing plaintiffs' Securities
Exchange Act claims premised on Fannie Mae's subprime and Alt-A
disclosures to proceed along with plaintiffs' claims premised on
Fannie Mae's risk management disclosures. Fannie Mae filed its
answer to the second amended complaint on October 29, 2012.
Discovery is ongoing.
Given the stage of this lawsuit, the absence of a specified demand
or claim by the plaintiff, and the substantial and novel legal
questions that remain, the company is currently unable to estimate
the reasonably possible loss or range of loss arising from this
litigation.
In re 2008 Fannie Mae ERISA Litigation
In a consolidated complaint filed in 2009, plaintiffs allege that
certain of the company's current and former officers and
directors, including former members of Fannie Mae's Benefit Plans
Committee and the Compensation Committee of Fannie Mae's Board of
Directors, as fiduciaries of Fannie Mae's Employee Stock Ownership
Plan ("ESOP"), breached their duties to ESOP participants and
beneficiaries by investing ESOP funds in Fannie Mae common stock
when it was no longer prudent to continue to do so. Plaintiffs
purport to represent a class of participants and beneficiaries of
the ESOP whose accounts invested in Fannie Mae common stock
beginning April 17, 2007.
The plaintiffs seek unspecified damages, attorneys' fees and other
fees and costs, and injunctive and other equitable relief.
On February 1, 2012, plaintiffs sought leave to amend their
complaint to add new factual allegations and the court granted
plaintiffs' motion. Plaintiffs filed an amended complaint on March
2, 2012 adding two current Board members and then-CEO Michael J.
Williams as defendants. On October 22, 2012, the court granted in
part and denied in part defendants' motions to dismiss. The court
dismissed with prejudice claims against seven former and current
directors and officers who joined the Board of Directors or
Benefit Plans Committee after Fannie Mae was placed into
conservatorship. The court allowed plaintiffs' breach of fiduciary
duty and failure to monitor claims to go forward, but dismissed
plaintiffs' conflict of interest claim. Discovery is ongoing.
Given the stage of this lawsuit, the absence of a specified demand
or claim by the plaintiff, and the substantial and novel legal
questions that remain, the company is currently unable to estimate
the reasonably possible loss or range of loss arising from this
litigation.
FIFTH THIRD: Escrows $46MM for Interchange Fees Suit Accord
-----------------------------------------------------------
Fifth Third Bancorp paid $46 million into a class settlement
escrow account for a consolidated antitrust class action over
interchange fees, according to the company's May 9, 2013, Form 10-
Q filing with the U.S. Securities and Exchange Commission for the
quarter ended March 31, 2013.
During April 2006, the Bancorp was added as a defendant in a
consolidated antitrust class action lawsuit originally filed
against Visa, MasterCard and several other major financial
institutions in the United States District Court for the Eastern
District of New York.
The plaintiffs, merchants operating commercial businesses
throughout the U.S. and trade associations, claim that the
interchange fees charged by card-issuing banks are unreasonable
and seek injunctive relief and unspecified damages. In addition to
being a named defendant, the Bancorp is also subject to a possible
indemnification obligation of Visa as discussed in Note 14 and has
also entered into judgment and loss sharing agreements with Visa,
MasterCard and certain other named defendants.
On October 19, 2012, the parties to the litigation entered into a
settlement agreement. The court entered a Class Settlement
Preliminary Approval Order on November 27, 2012. Pursuant to the
terms of the settlement agreement, the Bancorp paid $46 million
into a class settlement escrow account. Previously, the Bancorp
paid an additional $4 million in another settlement escrow in
connection with the settlement of claims from plaintiffs not
included in the class action. The Bancorp had no remaining
reserves as of March 31, 2013 and December 31, 2012.
FIFTH THIRD: Still Awaits OK for $16MM Securities Suit Accord
-------------------------------------------------------------
A court approval process for a $16 million settlement of a
consolidated securities suit against Fifth Third Bancorp is
ongoing, according to the company's May 9, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013.
For the year ended December 31, 2008, five putative securities
class action complaints were filed against the Bancorp and its
Chief Executive Officer, among other parties. The five cases have
been consolidated under the caption Local 295/Local 851 IBT
Employer Group Pension Trust and Welfare Fund v. Fifth Third
Bancorp. et al., Case No. 1:08CV00421, and are currently pending
in the United States District Court for the Southern District of
Ohio.
On December 18, 2012, the Bancorp entered into a settlement
agreement to resolve these cases. The settlement is subject to
court approval, which process is ongoing. Under the terms of the
settlement, the Bancorp and its insurer will pay a total of $16
million to a fund to settle all the claims of the class members.
In the settlement the Bancorp has denied any liability and has
agreed to the settlement in order to avoid potential future
litigation costs and uncertainty. The Bancorp does not consider
the impact of the settlement to be material to its financial
condition or results of operations.
ERISA Lawsuit
In addition, two cases were filed in the United States District
Court for the Southern District of Ohio against the Bancorp and
certain officers alleging violations of ERISA based on allegations
similar to those set forth in the securities class action cases
filed during the same period of time. The two cases alleging
violations of ERISA were dismissed by the trial court, but the
Sixth Circuit Court of Appeals recently reversed the trial court
decision. The Bancorp petitioned the Supreme Court to review and
reverse the Sixth Circuit decision and sought a stay of
proceedings in the trial court pending appeal. On March 25, 2013,
the Supreme Court issued an order directing the Solicitor General
to file a brief stating the view of the United State on the issues
raised in the Fifth Third's petition. The motion to stay remains
pending. The impact of the final disposition of the ERISA lawsuits
cannot be assessed at this time.
FIRSTCITY FINANCIAL: Signs MOU to Settle Merger-Related Suits
-------------------------------------------------------------
FirstCity Financial Corporation entered into a memorandum of
understanding to settle merger-related class action lawsuits,
according to the Company's May 13, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In December 2012, the Company entered into a definitive merger
agreement with Hotspurs Holdings LLC ("Parent") and Hotspurs
Acquisition Corporation ("Merger Subsidiary") pursuant to which
the Company will become a private company that is wholly owned by
Parent. Parent and Merger Subsidiary are affiliates of certain
private investment funds governed by Varde Partners, Inc.
("Varde"). Under the terms of the merger agreement, FirstCity
stockholders will receive $10.00 per share in cash for each share
of FirstCity stock they own. The transaction is expected to close
in the second quarter of 2013. Consummation of the merger is
subject to various customary conditions, including the adoption of
the merger agreement by the holders of at least a majority of the
outstanding shares of the Company's common stock. The Company has
filed a preliminary proxy statement with the Securities and
Exchange Commission recommending that the Company's stockholders
adopt the merger agreement.
On January 15, 2013, a putative class action lawsuit was filed in
the District Court in McLennan County, Texas against the Company,
its directors, Parent, Merger Subsidiary and Varde purportedly on
behalf of the Company's stockholders, under the caption Eric J.
Drayer v. James T. Sartain, et. al., Cause No. 2013-246-5. The
lawsuit alleged, among other things, that the director defendants
breached their fiduciary duties to the Company's stockholders in
connection with Varde's proposal and that Varde, Parent and Merger
Subsidiary have aided and abetted such breaches. The plaintiff
sought declaratory and injunctive relief, reasonable attorneys'
and experts' fees and in the event the transaction is consummated,
rescission of the transaction, rescissory damages and an
accounting of all damages, profits and special benefits. On
February 13, 2013, a first amended petition was filed. The
amended petition alleged that the director defendants breached
their fiduciary duties by (i) failing to maximize the value of the
Company, (ii) taking steps to avoid competitive bidding, (iii)
failing to properly value the Company and (iv) omitting material
information and providing materially misleading information in the
preliminary proxy statement, and sought the same relief and
asserted the same claims as the original petition.
On January 29, 2013, a putative class action lawsuit was filed in
the Court of Chancery of the State of Delaware against the
Company, its directors, Parent, Merger Subsidiary and Varde
purportedly on behalf of the Company's stockholders, under the
caption Paul Perry v. FirstCity Financial Corporation, et. al.,
Case No. 8259-VCG. The lawsuit alleged, among other things, that
the director defendants breached their fiduciary duties to the
Company's stockholders by entering into the merger agreement and
that the Company, Varde, Parent and Merger Subsidiary aided and
abetted such breaches. The plaintiff sought declaratory and
injunctive relief, reasonable attorneys' and experts' fees and in
the event the transaction is consummated, rescission of the
transaction and an accounting of all damages, profits and special
benefits. On February 15, 2013, a first amended complaint was
filed adding Varde Management, L.P. as a defendant. The amended
complaint alleged that the director defendants breached their
fiduciary duties by (i) agreeing to the merger consideration which
undervalues the Company, (ii) agreeing to the terms of the merger
agreement which deter other bidders and (iii) omitting material
information and providing materially misleading information in the
preliminary proxy statement, and sought the same relief and
asserted the same claims as the original complaint.
On April 10, 2013, the Company, its directors, Parent, Merger
Subsidiary, Varde and Varde Management, L.P., as defendants in the
Perry lawsuit and the Drayer lawsuit, reached an agreement in
principle with the plaintiffs in such actions providing for the
settlement of the actions on the terms and subject to the
conditions set forth in the memorandum of understanding dated
April 10, 2013, which was amended on April 22, 2013 (the "MOU"),
which terms included, but are not limited to, an obligation by the
Company to make certain additional disclosures in the proxy
statement regarding the proposed transaction. If the settlement
becomes effective, the attorneys for the plaintiff class will seek
an award of attorney's fees and expenses. The settlement is
subject to, among other things, the execution of definitive
settlement documentation, the completion of confirmatory
discovery, dismissal of the actions, consummation of the proposed
transaction and the approval of the Texas and Delaware courts.
Upon effectiveness of the settlement, the Perry and Drayer
lawsuits will be dismissed with prejudice and all claims under
federal and state law that were or could have been asserted in
such lawsuits or which arise out of or relate to the proposed
transaction will be released by the plaintiff class. The
defendants entered into the MOU to eliminate the uncertainty,
burden, risk, expense and distraction of further litigation.
FirstCity Financial Corporation -- http://www.fcfc.com/-- a
Delaware corporation, is a multi-national specialty financial
services company headquartered in Waco, Texas. The Company
engages in two major business segments -- Portfolio Asset
Acquisition and Resolution business segment and Special Situations
Platform business segment.
FORD MOTOR: Hybrid Sedan Owners Sue Over Defective Cooling Pumps
----------------------------------------------------------------
Andrew Scurria, writing for Law360, reports that two of Ford Motor
Co.'s pioneering hybrid sedans can shut down completely and with
little warning at highway speeds because of a weakness in their
engine-cooling systems, a customer alleged June 28 in a proposed
class action brought in California court.
The suit stems from defects allegedly present in the 2005 through
2008 models of the Ford Escape Hybrid and 2006 through 2008 models
of its Mercury Mariner twin, which were the first hybrid
crossovers released by an American car manufacturer, according to
the complaint.
Ford designed the cars' engines as a nascent attempt to
incorporate hybrid technology into its fleet of vehicles, and to
diffuse the tremendous heat generated by a sophisticated battery-
powered motor component, they incorporated a temperature control
system dubbed the Motor Electric Cooling System, or MECS, to whisk
hot air back into the atmosphere.
When the MECS becomes inoperative, the vehicle is designed to shut
down to keep certain motor components from being damaged by the
high temperatures generated from the electric-powered engine.
Friday's suit claims that coolant pumps associated with the MECS
are "substantially certain" to fail suddenly and unexpectedly
before their useful life has run out, putting drivers at risk
during the resultant shutdowns.
"The coolant pump defect causes unsafe conditions in the class
vehicles, including but not limited to abrupt losses of
acceleration, inability to maneuver the vehicle due to reduced
speed, slowed steering, and in certain cases, complete vehicle
failure," according to the complaint. "Even more troubling, the
defect generally manifests at freeway speeds, and poses an
unreasonable safety risk due to the inherent dangers of traveling
at high speeds."
The lead plaintiff, Jean MacDonald, says that she purchased a new
2007 Ford Escape hybrid from a California dealership, and put more
than 43,000 miles on it it without incident until December 2012,
when her car's "Stop Safely Now" light went on and the vehicle
went powerless in the middle of the freeway.
A dealership later diagnosed the problem as a malfunction of a
cooling pump associated with the MECS, and replaced it at a cost
of $767.
Thousands of purchasers and lessees of the hybrids have allegedly
experienced similar problems with the pumps and some have
complained to the National Highway Traffic Safety Administration,
according to the complaint.
The suit alleges that Ford knew about the defect since at least
2005 through information only it had access to -- pre-release
testing data, early consumer complaints, abnormally high warranty
reimbursement rates and repair orders and aggregate data from Ford
dealerships.
In response, an engineering manager behind the company's hybrid
technology development efforts in 2006 gave an interview in which
he indicated that several of the coolant pumps had "blew" once
they operated for 50,000 miles but that the problem had been
"rectified," according to the complaint.
The company, though, allegedly put out at least two bulletins in
2008 to its dealerships acknowledging that reports of loss of
performance were likely tied to the inoperative coolant pumps.
"Defendant knew about and concealed the coolant pump defect
present in every class vehicle, along with the attendant dangerous
safety and driveability problems, from plaintiff and class
members, at the time of sale, lease and repair," the complaint
says.
The bulletins outline instructions to authorized Ford mechanics on
how to replace the offending coolant pump with a nondefective
model, but the carmaker has allegedly told consumers that they are
on the hook for the costs of a new system rather than repairing it
under warranty.
"Instead of repairing the defect in the MECS coolant system, Ford
either refused to acknowledge their existence, or performed
ineffectual repairs that simply masked the effect," according to
the complaint.
The suit seeks to represent a nationwide class of buyers and
lessees of the allegedly defective Escape and Mariner models, as
well as a subclass of California-based customers under the state's
Consumer Legal Remedies Act.
Counsel for the plaintiffs and a representative for Ford did not
immediately respond to requests for comment on Monday.
The plaintiff is represented by:
Jordan L. Lurie, Esq.
David L. Cheng, Esq.
Tarek H. Zohdy, Esq.
Cody R. Padgett, Esq.
CAPSTONE LAW APC
E-mail: Jordan.Lurie@CapstoneLawyers.com
David.Cheng@CapstoneLawyers.com
Counsel information for Ford was not immediately available.
The case is MacDonald v. Ford Motor Co., case number 3:13-cv-
02988, in the U.S. District Court for the Northern District of
California.
GENERAL MOTORS: Ex-Canadian Dealers' Case Proceeds as Class Suit
----------------------------------------------------------------
A case by former dealers of General Motors of Canada Limited
(GMCL) is proceeding as a class action after the Ontario Superior
Court dismissed GMCL's appeal of a class certification order,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On February 12, 2010 a claim was filed in the Ontario Superior
Court of Justice against General Motors of Canada Limited (GMCL)
on behalf of a purported class of over 200 former GMCL dealers
(the Plaintiff Dealers) which had entered into wind-down
agreements with GMCL.
In May 2009 in the context of the global restructuring of the
business and the possibility that GMCL might be required to
initiate insolvency proceedings, GMCL offered the Plaintiff
Dealers the wind-down agreements to assist with their exit from
the GMCL dealer network and to facilitate winding down their
operations in an orderly fashion by December 31, 2009 or such
other date as GMCL approved but no later than on October 31, 2010.
The Plaintiff Dealers allege that the Dealer Sales and Service
Agreements were wrongly terminated by GMCL and that GMCL failed to
comply with certain disclosure obligations, breached its statutory
duty of fair dealing and unlawfully interfered with the Plaintiff
Dealers' statutory right to associate in an attempt to coerce the
Plaintiff Dealers into accepting the wind-down agreements. The
Plaintiff Dealers seek damages and assert that the wind-down
agreements are rescindable.
The Plaintiff Dealers' initial pleading makes reference to a claim
"not exceeding" CAD $750 million, without explanation of any
specific measure of damages. On March 1, 2011 the court approved
certification of a class for the purpose of deciding a number of
specifically defined issues including: (1) whether GMCL breached
its obligation of "good faith" in offering the wind-down
agreements; (2) whether GMCL interfered with the Plaintiff
Dealers' rights of free association; (3) whether GMCL was
obligated to provide a disclosure statement and/or disclose more
specific information regarding its restructuring plans in
connection with proffering the wind-down agreements; and (4)
assuming liability, whether the Plaintiff Dealers can recover
damages in the aggregate (as opposed to proving individual
damages).
On June 22, 2011 the court granted GMCL permission to appeal the
class certification decision. On March 26, 2012 the Ontario
Superior Court dismissed GMCL's appeal of the class certification
order. Accordingly the case will proceed as a class action.
Twenty-six dealers within the certified class definition have
indicated that they will not participate. The current prospects
for liability are uncertain, but because liability is not deemed
probable the company have no accrual relating to this litigation.
The company cannot estimate the range of reasonably possible loss
in the event of liability as the case presents a variety of
different legal theories, none of which GMCL believes are valid.
GROUPON INC: Faces Suits Alleging Credit Card Act Violations
------------------------------------------------------------
Groupon, Inc. disclosed in its May 9, 2013, Form 10-Q filing with
the U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013, that it is currently involved in proceedings by
former employees, intellectual property infringement suits and
suits by customers (individually or as class actions) alleging,
among other things, violation of the Credit Card Accountability,
Responsibility and Disclosure Act, and state laws governing gift
cards, stored value cards and coupons, as well as general customer
complaints seeking monetary damages.
GROUPON INC: Countermotions Filed in Ill. Securities Lawsuit
------------------------------------------------------------
Groupon Inc. is moving to have the suit In re Groupon, Inc.
Securities Litigation dismissed by the United States District
Court for the Northern District of Illinois, according to the
company's May 9, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2013.
The Company is currently a defendant in a proceeding pursuant to
which, on October 29, 2012, a consolidated amended class action
complaint was filed against the Company, certain of its directors
and officers, and the underwriters that participated in the
initial public offering of the Company's Class A common stock.
Originally filed in April 2012, the case is currently pending
before the United States District Court for the Northern District
of Illinois: In re Groupon, Inc. Securities Litigation. The
complaint asserts claims pursuant to Sections 11 and 15 of the
Securities Act of 1933 and Sections 10(b) and 20(a) of the
Securities Exchange Act of 1934.
Allegations in the consolidated amended complaint include that the
Company and its officers and directors made untrue statements or
omissions of material fact by issuing inaccurate financial
statements for the fiscal quarter and the fiscal year ending
December 31, 2011 and by failing to disclose information about the
Company's financial controls in the registration statement and
prospectus for the Company's initial public offering of Class A
common stock and in the Company's subsequently-issued financial
statements.
The putative class action lawsuit seeks an unspecified amount of
monetary damages, reimbursement for fees and costs incurred in
connection with the actions, including attorneys' fees, and
various other forms of monetary and non-monetary relief. The
defendants filed a motion to dismiss the consolidated amended
complaint on January 18, 2013. The lead plaintiff filed his
response to the motion to dismiss on March 19, 2013, and
defendants filed their reply in support of the motion to dismiss
on April 22, 2013.
The lead plaintiff recently filed a sur-reply in further
opposition to the motion to dismiss, and the Company will be
asking the court to consider the Company's brief response to the
sur-reply.
GROUPON INC: Lead Plaintiff, Counsel Named in Investors' Suit
-------------------------------------------------------------
A court entered an order appointing a lead plaintiff and approving
its selection of lead counsel and local counsel for a purported
class in a federal action whose dismissal is important to the
resolution of a derivative suit against Groupon Inc.,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In addition, federal and state purported stockholder derivative
lawsuits have been filed against certain of the Company's current
and former directors and officers. The federal purported
stockholder derivative lawsuit was originally filed in April 2012
and a consolidated stockholder derivative complaint, filed on July
30, 2012, is currently pending in the United States District Court
for the Northern District of Illinois: In re Groupon Derivative
Litigation.
Plaintiffs assert claims for breach of fiduciary duty and abuse of
control. The state derivative cases are currently pending before
the Chancery Division of the Circuit Court of Cook County,
Illinois: Orrego v. Lefkofsky, et al., was filed on April 5, 2012;
and Kim v. Lefkofsky, et al., was filed on May 25, 2012.
The state derivative complaints generally allege that the
defendants breached their fiduciary duties by purportedly
mismanaging the Company's business by, among other things, failing
to utilize proper accounting controls and, in the case of one of
the state derivative lawsuits, by engaging in alleged insider
trading of the Company's Class A common stock and misappropriating
information.
In addition, one state derivative case asserts a claim for unjust
enrichment. The derivative lawsuits purport to seek to recoup
from the Company an unspecified amount of monetary damages
allegedly sustained by the Company, restitution from defendants,
reimbursement for fees and costs incurred in connection with the
actions, including attorneys' fees, and various other forms of
monetary and non-monetary relief.
On June 20, 2012, the Company and the individual defendants filed
a motion requesting that the court stay the federal derivative
actions pending resolution of the Federal Class Actions. On July
31, 2012, the court granted defendants' motion in part, and stayed
the Federal derivative actions pending a separate resolution of
upcoming motions to dismiss in the federal class actions.
On June 15, 2012, the state plaintiffs filed a motion to
consolidate the state derivative actions, which was granted on
July 2, 2012, and on July 5, 2012, the plaintiffs filed a motion
for appointment of co-lead plaintiffs and co-lead counsel, which
was granted on July 27, 2012. No consolidated complaint has been
filed in the state derivative action.
On September 14, 2012, the court granted a motion filed by the
parties requesting that the court stay the state derivative
actions pending the federal court's resolution of anticipated
motions to dismiss in the federal class actions.
On April 18, 2013, the court entered an order appointing a lead
plaintiff and approving its selection of lead counsel and local
counsel for the purported class.
GROUPON INC: Faces 2 Securities Lawsuits in Illinois Court
----------------------------------------------------------
Two federal putative class action securities complaints were filed
in the United States District Court for the Northern District of
Illinois: Weber v. Groupon, Inc., et al was filed on December 21,
2012; and Earley v. Groupon, Inc. et al. was filed on January 22,
2013, according to the company's May 9, 2013, Form 10-Q filing
with the U.S. Securities and Exchange Commission for the quarter
ended March 31, 2013.
Both complaints assert claims pursuant to Sections 10(b) and 20(a)
of the Securities Exchange Act of 1934. Allegations in the
complaints include that the Company and its officers and directors
made untrue statements or omissions of material fact beginning on
May 14, 2012, with the Company's press release reporting its first
quarter 2012 earnings results, through the Company's November 8,
2012 press release announcing its third quarter 2012 earnings
results, and failed to disclose information about the Company's
revenue growth and revenue mix.
These putative class action lawsuits seek an unspecified amount of
monetary damages, reimbursement for fees and costs incurred in
connection with the actions, including attorneys' fees, and
various other forms of monetary and non-monetary relief.
GROUPON INC: $8MM Deal Okayed in Marketing, Sales Practices Suit
----------------------------------------------------------------
The U.S. District Court for the Northern District of California
approved the $8.5 million settlement in In re Groupon Marketing
and Sales Practices Litigation, according to Groupon Inc.'s
May 9, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
The Company was named as a defendant in a series of class actions
that came to be consolidated into a single case in the U.S.
District Court for the Northern District of California.
The consolidated case is referred to as In re Groupon Marketing
and Sales Practices Litigation. The Company denies liability, but
the parties agreed to settle the litigation for $8.5 million
before any determination had been made on the merits or with
respect to class certification.
Because the case had been filed as a class action, the parties
were required to provide proper notice and obtain court approval
for the settlement. During that process, certain individuals
asserted various objections to the settlement. The parties to the
case opposed the objections and on December 14, 2012, the district
court approved the settlement over the various objections.
JONES FINANCIAL: Appeal in Lehman-Related Suits Remains Pending
---------------------------------------------------------------
An appeal from the dismissal of two class action lawsuits related
to The Jones Financial Companies, L.L.L.P. subsidiary's
underwriting of Lehman Brothers Holdings Inc. remains pending,
according to the Company's May 13, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 29, 2013.
The Partnership's principal operating subsidiary, Edward D. Jones
& Co., L.P. ("Edward Jones"), was named as a defendant in three
actions related to its underwriting of Lehman Brothers Holdings
Inc. ("Lehman Brothers") notes that are or were pending in the
U.S. District Court for the Southern District of New York
("SDNY"). Two of the lawsuits were putative class action lawsuits
originally brought by plaintiffs in state court in Arkansas (the
"Arkansas Plaintiffs"), which asserted Securities Act claims based
upon two offerings of Lehman Brothers' notes in 2007. The Court
dismissed those actions on December 11, 2012. The Arkansas
Plaintiffs have appealed the dismissal. The third lawsuit was
amended in October 2011 to assert a Section 11 claim against
Edward Jones related to three offerings of Lehman bonds in January
and February 2008. The Plaintiffs, American National Life
Insurance Company of Texas, Comprehensive Investment Services
Inc., The Moody Foundation, and American National Insurance
Company, allege to have purchased $3 million of securities in
these offerings, but did not make any of these purchases through
Edward Jones. This action names several other purported
underwriters as defendants, as well as Lehman Brothers' former
auditor. On January 6, 2012, Edward Jones and other defendants
moved to dismiss this action. On March 27, 2013, the court
dismissed claims against Edward Jones related to two offerings.
Claims related to one offering are still pending. The Plaintiffs
will have an opportunity to appeal the dismissal.
Based in Des Peres, Missouri, The Jones Financial Companies,
L.L.L.P., is organized under the Uniform Limited Partnership Law
of the State of Missouri Revised Statutes. The Partnership's
principal operating subsidiary, Edward D. Jones & Co., L.P., is
comprised of two registered broker-dealers primarily serving
individual investors in the United States of America and Canada.
JONES FINANCIAL: Awaits Ruling on Bid to Dismiss "Ezersky" Suit
---------------------------------------------------------------
The Jones Financial Companies, L.L.L.P., is awaiting a court
decision on its subsidiary's motion to dismiss a class action
lawsuit initiated by Daniel Ezersky, according to the Company's
May 13, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 29, 2013.
The Partnership's principal operating subsidiary, Edward D. Jones
& Co., L.P. ("Edward Jones"), was named as a defendant in a
putative class action complaint in the Circuit Court of St. Louis
County, Missouri, brought by Daniel Ezersky, individually and on
behalf of all others similarly situated. The complaint asserted
causes of action for breach of fiduciary duty, unjust enrichment,
and violation of the Missouri Merchandising Practices Act for
recommending that clients purchase an amount of term, whole life
or universal life insurance without taking into account Social
Security survivor benefits, and for accepting 'revenue sharing'
payments from certain insurance product partners. The Plaintiff
alleges damages including: actual damages, or alternatively,
judgment in an amount equal to profits gained from the sale of
term, whole life or universal life insurance to plaintiff/damages
class; punitive damages; a permanent injunction prohibiting Edward
Jones from recommending an amount of term, whole life or universal
life insurance without taking into account Social Security
survivor benefits; costs, including reasonable fees and expert
witness expenses; reasonable attorneys' fees, and such other
relief as the Court deems just and proper. The Plaintiff filed
the complaint on March 14, 2013, and Edward Jones filed a Motion
to Dismiss on April 26, 2013. The Court has not ruled on Edward
Jones's Motion to Dismiss.
Based in Des Peres, Missouri, The Jones Financial Companies,
L.L.L.P., is organized under the Uniform Limited Partnership Law
of the State of Missouri Revised Statutes. The Partnership's
principal operating subsidiary, Edward D. Jones & Co., L.P., is
comprised of two registered broker-dealers primarily serving
individual investors in the United States of America and Canada.
KENDALL LAKES: Court Certifies FLSA Suit as Collective Action
-------------------------------------------------------------
District Judge Federic A. Moreno granted a motion for conditional
certification of collective action in the lawsuit captioned
JUAN C. PARES, EMILIO ALONZO, and MARIO GOMEZ, individually and on
behalf of others similarly situated, Plaintiffs, v. KENDALL LAKES
AUTOMOTIVE, LLC, d/b/a Kendall Dodge Chrysler Jeep Ram and Miami
Lakes Auto Mall; MIAMI LAKES AM, LLC, d/b/a Kendall Dodge Chrysler
Jeep Ram and Miami Lakes Auto Mall; and FAISAL AHMED,
individually, Defendants, CASE NO. 13-20317-CIV-MORENO (S.D. Fla.)
On January 29, 2013, Plaintiffs Juan C. Pares, Emilio Alonzo, and
Mario Gomez filed this suit as former employees of Defendants
Kendall Lakes Automotive, LLC, Miami Lakes AM, LLC, and Faisal
Ahmed, alleging that the Defendants violated the Fair Labor
Standards Act by instituting a payment plan that failed to cover
the minimum wage. The Plaintiffs subsequently filed the present
motion seeking conditional certification of a class of salespeople
employed by the Defendants who were subject to the payment plan at
issue.
Since the Plaintiffs have demonstrated the existence of other
salespeople who desire to opt into the lawsuit and who are
similarly situated to Plaintiffs, the Court granted the
Plaintiffs' motion for conditional certification.
The Court authorized the Plaintiffs to send notice to putative
plaintiffs employed at the Kendall dealership after February 3,
2012, and at the Miami Lakes dealership after June 15, 2010.
The Defendants will produce the requested discovery and list of
salespeople, subject to the limitations stated in the order, no
later than 15 days after June 26, 2013.
The Plaintiffs' request for tolling of the statute of limitations
is denied.
A copy of the District Court's June 26, 2013 Order is available at
http://is.gd/hUYdzpfrom Leagle.com.
Plaintiffs Juan C. Pares, Emilio Alonzo, Mario Gomez, are
represented by Anthony Sanchez, Esq., at Anthony F. Sanchez, P.A.
Defendants Kendall Lakes Automotive, LLC, Miami Lakes AM, LLC,
Faisal Ahmed, are represented by Barbara A. Stern, Esq. --
bstern@bnlaw.com -- at Bohdan Neswiacheny.
Defendant Donald Charnin and Eduardo Cerra, are represented by
Anthony Sanchez, Esq., at Anthony F. Sanchez, P.A.
LAPOLLA INDUSTRIES: Faces Fla. Suit Over Spray Foam Insulation
--------------------------------------------------------------
Lapolla Industries, Inc., is facing a class action lawsuit brought
by Robert and Cynthia Gibson in Florida over spray polyurethane
foam insulation, according to the Company's May 13, 2013, Form
10-Q filing with the U.S. Securities and Exchange Commission for
the quarter ended March 31, 2013.
A complaint entitled Robert and Cynthia Gibson, individually and
on behalf of others similarly situated, Plaintiffs v. Lapolla
Industries, Inc., a Delaware corporation, and Air Tight Insulation
of Mid-Florida, LLC, Defendants, was filed in the United States
District Court for the Middle District of Florida on April 22,
2003, and served on or about April 23, 2013. The Plaintiffs bring
this lawsuit individually and on behalf of a nationwide class
against the Defendants as well as two Florida subclasses. The
complaint alleges, among other things, negligence in connection
with the design, manufacture, distribution, and installation of
Lapolla's spray polyurethane foam insulation, resulting in
exposure to harmful gases, breach of express and implied
warranties, and violation of various state statutes. The
Plaintiffs are seeking, among other things: (i) an order
certifying the lawsuit as a class action and certifying the class
and sub-classes of Plaintiffs; (ii) actual, compensatory,
statutory, and punitive damages; (iii) injunctive relief; and (iv)
attorney fees. Lapolla considers the allegations to be without
merit and shall mount a vigorous defense against the proposed
class action, as well as all other allegations. The outcome of
this litigation cannot be determined at this time.
Lapolla Industries, Inc. -- http://www.Lapollaindustries.com/--
is a national manufacturer and supplier of spray polyurethane
foams and acrylic coatings targeting commercial and industrial and
residential building envelope applications in the roofing and
insulation construction industries. The Houston, Texas-based
Company is also a national distributor of equipment for
application of its products.
LEGGETT & PLATT: Still Faces Antitrust Lawsuits in US & Canada
--------------------------------------------------------------
Leggett & Platt, Incorporated continues to face lawsuits in the
United States and Canada alleging it engaged in price fixing for
its polyurethane foam products, according to the company's May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
Beginning in August 2010, a series of civil lawsuits was initiated
in several U.S. federal courts and in Canada against over 20
defendants alleging that competitors of the company's carpet
underlay business unit and other manufacturers of polyurethane
foam products had engaged in price fixing in violation of U.S. and
Canadian antitrust laws.
A number of these lawsuits have been voluntarily dismissed, most
without prejudice. Of the U.S. cases remaining, the company has
been named as a defendant in
(a) three direct purchaser class action cases (the first on
November 15, 2010) and a consolidated amended class
action complaint on behalf of a class of all direct
purchasers of polyurethane foam products;
(b) an indirect purchaser class consolidated amended complaint
filed on March 21, 2011; and an indirect purchaser class
action case filed on May 23, 2011;
(c) 36 individual direct purchaser cases filed between
March 22, 2011 and May 3, 2013; and
(d) two individual cases alleging direct and indirect
purchaser claims under the Kansas Restraint of Trade Act,
one filed on November 29, 2012 and the other on April 11,
2013.
All of the pending U.S. federal cases in which the company has
been named as a defendant, have been filed in, transferred to, or
are expected to be transferred to the U.S. District Court for the
Northern District of Ohio under the name In re: Polyurethane Foam
Antitrust Litigation, Case No. 1:10-MD-2196.
In the U.S. actions, the plaintiffs, on behalf of themselves
and/or a class of purchasers, seek three times the amount of
unspecified damages allegedly suffered as a result of alleged
overcharges in the price of polyurethane foam products from at
least 1999 to the present. Each plaintiff also seeks attorney
fees, pre-judgment and post-judgment interest, court costs, and
injunctive relief against future violations.
On April 15 and May 6, 2011, the company filed motions to dismiss
the U.S. direct purchaser and indirect purchaser class actions in
the consolidated case in Ohio, for failure to state a legally
valid claim. On July 19, 2011, the Ohio Court denied the motions
to dismiss. Discovery is underway in the U.S. actions.
The company has been named in two Canadian class action cases (for
direct and indirect purchasers of polyurethane foam products),
both under the name Hi Neighbor Floor Covering Co. Limited and
Hickory Springs Manufacturing Company, et.al. in the Ontario
Superior Court of Justice (Windsor), Court File Nos. CV-10-15164
(amended November 2, 2011) and CV-11-17279 (issued December 30,
2011).
In each of the Canadian cases, the plaintiffs, on behalf of
themselves and/or a class of purchasers, seek from over 13
defendants restitution of the amount allegedly overcharged,
general and special damages in the amount of $100, punitive
damages of $10, pre-judgment and post-judgment interest, and the
costs of the investigation and the action. The company is not yet
required to file the company's defenses in the Canadian actions.
In addition, on July 10, 2012, plaintiff in a class action case
(for direct and indirect purchasers of polyurethane foam products)
styled Option Consommateurs and Karine Robillard v. Produits
Vitafoam Canada LimitEe, et. al. in the Quebec Superior Court of
Justice (Montreal), Court File No. 500-6-524-104, filed an amended
motion for authorization seeking to add the company and other
manufacturers of polyurethane foam products as defendants in this
case.
On June 22, 2012, the company was also made party to a lawsuit
brought in the 16th Judicial Circuit Court, Jackson County,
Missouri, Case Number 1216-CV15179 under the caption "Dennis
Baker, on Behalf of Himself and all Others Similarly Situated vs.
Leggett & Platt, Incorporated." The plaintiff, on behalf of
himself and/or a class of indirect purchasers of polyurethane foam
products in the State of Missouri, alleged that the company
violated the Missouri Merchandising Practices Act based upon the
company's alleged illegal price inflation of flexible polyurethane
foam products. The plaintiff seeks unspecified actual damages,
punitive damages and the recovery of reasonable attorney fees.
The company filed a motion to dismiss this action, which was
denied on November 5, 2012. Discovery has commenced.
LOJACK CORPORATION: $8.1MM Settlement of "Rutti" Suit Approved
--------------------------------------------------------------
A Superior Court granted final approval to a $8,100,000 settlement
of a lawsuit alleging violations of California wage-and-hour law
against LoJack Corporation, according to the company's May 9,
2013, Form 10-Q filing with the U.S. Securities and Exchange
Commission for the quarter ended March 31, 2013.
On April 5, 2006, Mike Rutti vs. LoJack Corporation, Inc. was
filed in the United States District Court for the Central District
of California, or the District Court, by a former employee
alleging violations of the Fair Labor Standards Act, or the FLSA,
the California Labor Code, and the California Business &
Professions Code, and seeking class action status, or the Federal
Court Case.
In September 2007, the company's motion for summary judgment was
granted and the District Court dismissed all of the plaintiff's
federal law claims. The plaintiff appealed the grant of summary
judgment to the United States Court of Appeals for the Ninth
Circuit, or the Ninth Circuit, and, in August 2009, the Ninth
Circuit affirmed the District Court's grant of summary judgment on
all claims except as to the claim for compensation for the
required postliminary data transmission, or the Data Transmission
Claim, for which the dismissal was reversed.
The plaintiff filed a petition for rehearing and, on March 2,
2010, the Ninth Circuit amended its decision to affirm the
District Court's grant of summary judgment on all claims except as
to (a) the Data Transmission Claim and (b) the claim for
compensation for commuting under state law, or the Commuting
Claim. The plaintiff later sought to pursue the Commuting Claim in
the State Court Case. The plaintiff moved for conditional
certification of the Data Transmission Claim under the FLSA and,
on January 14, 2011, the District Court granted the plaintiff's
motion.
On October 7, 2011, the parties filed a joint stipulation with the
District Court stating that they had reached a settlement of the
Data Transmission Claim. On November 7, 2011, the parties filed a
joint motion for approval of the settlement as required by the
FLSA. Pursuant to the terms of the settlement, the Federal Court
Case would be dismissed, the plaintiffs would release the Company
of the claims asserted in the Federal Court Case and all other
wage-and-hour claims (except, in the case of two plaintiffs, the
claims asserted in the State Court Case) and the Company would pay
to the plaintiffs an aggregate amount of approximately $115,000
and pay to their attorneys an amount for attorneys' fees and costs
to be determined by the District Court upon motion but not to
exceed $1,100,000.
During the year ended December 31, 2011, the company recorded an
accrual in the amount of $1,250,000 with respect to the terms of
the Federal Court Case settlement, none of which remained accrued
at December 31, 2012. Nothing in the settlement would constitute
an admission of any wrongdoing, liability or violation of law by
the Company. Rather, the Company has agreed to the settlement to
resolve the Federal Court Case, thereby eliminating the
uncertainties and expense of further protracted litigation.
On November 28, 2011, the District Court approved the settlement
with the plaintiff and dismissed the Federal Court Case with
prejudice. Plaintiffs then submitted an application for attorneys'
fees and costs, to which the Company filed several objections. On
August 1, 2012, the District Court awarded plaintiffs' counsel
$901,000 in attorneys' fees and costs for the Federal Court Case.
On August 29, 2012, the Company filed a notice of appeal from the
District Court's judgment (the attorneys' fee appeal).
Due to the dismissal of the plaintiff's claims by the District
Court in September 2007, in November 2007, the plaintiff and a
second plaintiff filed in the Superior Court of California for Los
Angeles County, or the Superior Court, Mike Rutti, Gerson Anaya
vs. LoJack Corporation, Inc. to assert wage-and-hour claims under
California law on behalf of current and former Company
technicians, or the State Court Case.
In September 2009, the Superior Court granted class certification
with respect to nine claims and denied class certification with
respect to five claims. The Company sought appellate review of
this decision. On March 26, 2010, the California Court of Appeals
for the Second Appellate District granted the Company's request in
part, denying certification with respect to certain claims but
affirming certification with respect to certain other claims.
On July 29, 2011, the Superior Court granted class certification
of the remaining claims except for a vehicle maintenance expense
reimbursement claim. As a result, in the State Court Case, there
were sixteen certified claims, including the Commuting Claim; a
Data Transmission Claim arising under state law; claims for
various amounts of unpaid time; claims for reimbursement of work
tools expenses and the cost of washing a Company vehicle; claims
for unfair competition under California Business and Professions
Code section 17200; and claims for waiting-time penalties and
penalties under the California Labor Code Private Attorneys
General Act. On June 29, 2012, the Company filed for summary
judgment against more than forty class members, as well as for
summary adjudication of several class claims.
On October 18, 2012, the Company entered into a settlement
agreement, or the Settlement Agreement, with the named plaintiffs
in these wage-and-hour class and collective action lawsuits.
Under the terms of the Settlement Agreement, the Company has
agreed to pay up to $8,100,000, including plaintiffs' attorneys'
fees and costs, to resolve all remaining claims related to the
State Court Case. The Company previously disclosed that it
estimated the range of possible loss with respect to the State
Court Case to be between $970,000 and $30,000,000. The Settlement
Agreement involves no admission of wrongdoing, liability or
violation of the law by the Company. In addition, the Settlement
Agreement bars the named plaintiffs in the State Court Case from
pursuing further claims against the Company. Finally, the Company
has agreed to waive its pending Federal District Court appeal as
part of the Settlement Agreement and to pay the $901,000 awarded
by the federal court. The $901,000 in attorneys' fees awarded is
not included in the total settlement amount of $8,100,000, and was
paid in the fourth quarter of 2012.
The Settlement Agreement is subject to both preliminary and final
approval by the Superior Court. The Superior Court granted
preliminary approval on December 3, 2012. Notice of the settlement
was distributed to California class members in January 2013. Among
other things, the notice informed class members of their
opportunity to decide whether to participate in the settlement.
The Company could pay less than $8,100,000 in settlement of the
State Court Case depending on the level of participation by class
members in the settlement and other factors considered by the
Court on final approval. The Superior Court granted final approval
on April 30, 2013 and set an appeals deadline in July 2013.
Assuming no appeal is filed, the settlement payments will be due
in the third quarter of 2013.
During the year ended December 31, 2012, the company recorded an
additional accrual in the amount of $6,930,000 with respect to the
company's expected obligations under the Settlement Agreement,
bringing the total amount accrued for the State Court Case as of
December 31, 2012 and March 31, 2013, to $8,100,000.
LONE PINE: General, Admin. Costs Up Partly Due to Securities Suit
-----------------------------------------------------------------
General and administrative costs of Lone Pine Resources Inc.
increased in the first quarter of 2013 due partly to legal costs
associated with a purported securities class action, according to
the company's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
General and administrative costs primarily consist of the salaries
and related benefit costs for the company's employees,
professional fees and office lease costs. General and
administrative costs increased in the first quarter of 2013
compared to the first quarter of 2012 due to an overall increase
in activities for the Company, including legal costs associated
with a purported securities class action lawsuit relating to the
company's initial public offering as well as higher costs for
certain compliance functions including higher audit fees and
internal audit costs.
The increase was also partly due to $0.9 million of severance
payments related to the termination of employment of the company's
former Chief Executive Officer and Chief Financial Officer.
MAERSK LINE: Must Provide OT Pay to Sickly Seafarers, Court Rules
-----------------------------------------------------------------
Santi Suthinithet at Courthouse News Service reports that Maersk,
the shipping company plagued by piracy in recent years, must
provide overtime pay to a class of sickly seafarers it discharged
early, the 2nd Circuit ruled.
John Padilla led a class action against Maersk Line Ltd. on behalf
of seafarers, who were discharged because of injury or illness.
His contract as chief cook on board the Maersk Arkansas started on
October 30, 2006, and was to end on February 26, 2007. Maersk
discharged Padilla as unfit for duty on November 6, 2006, however
after he sustained an abdominal injury.
Though Maersk covered the base pay through the contract of workers
it discharged for injury or illness, it did not pay overtime as
part of the unearned wages. The base pay included a maintenance
payment for food and lodging expenses, as well as a cure payment
covering medical treatment.
The seafarers normally receive significant overtime pay, however.
By Maersk's own calculations, seafarers routinely received
overtime pay in excess of the entire amount of their base pay.
At the time of his discharge Padilla was entitled to his balance
of earned wages, which included 34 hours of overtime in addition
to his six days of regular pay. Maersk voluntarily paid Padilla
for unearned wages and maintenance and cure, but the company
refused to pay him for the overtime wages that he would have
earned.
It argued that seafarers are not entitled to overtime because it
is not included under general maritime law's definition of
"unearned wages."
Before considering class certification of Padilla's 2007 lawsuit,
a federal judge addressed the merits of his individual claim.
Maersk claimed that its collective bargaining agreement with the
Seafarers International Union excluded overtime from his recovery
of unearned wages, but the court found that the union contract did
not address overtime inclusion in the calculation of unearned
wages.
As such unearned wages included overtime pay if the seafarer
reasonably expected to earn overtime during service for a sum that
was not speculative and would have earned it "but for" an illness
or injury, the court said.
Finding that Padilla satisfied this test, the court awarded him
$13,478.49.
U.S. District Judge Richard Berman took over the case in 2010,
certified a class and ultimately awarded them of $836,819.40 in
January 2012.
As Maersk appealed, the lower court agreed to remove two seamen
from the class who filed their own separate lawsuits. It rejected
Maersk's second motion to remove 15 officers from the class,
however, as filed after the allowed deadline.
In that motion, Maersk argued that the officers were governed by a
different collective bargaining agreement with the American
Maritime Officers Union, which specifically limited unearned wages
to "benefits/wages only" and not overtime.
Last week, a three-judge panel of the 2nd Circuit affirmed the
overtime award and the refusal to amend the judgment.
"Under general maritime law, seamen who have become ill or injured
while in a ship's service have the right to receive maintenance
and cure from the owner of the vessel. In addition, a seaman is
entitled to recover unearned wages, the wages he would have earned
if not for the injury or illness," Judge Barrington Parker wrote
for the court.
"Because much of Padilla's income was derived from overtime
compensation, the District Court awarded him overtime pay as part
of his unearned wages, reasoning that Padilla was entitled to
recover in full the compensation that he would have earned 'but
for' his injury," he added. "We agree with this approach.
"Significantly, the district court concluded that the calculation
of the overtime Padilla would have worked was not speculative. . .
. In fact, the calculations of the overtime pay due to the class
were essentially undisputed: a Maersk manager easily calculated
each seaman's expectation of his overtime from records of past
work for Maersk. Thus we agree that the district court correctly
applied the 'but for' test."
The Plaintiff-Appellee is represented by:
Dennis M. O'Bryan, Esq.
O'BRYAN BAUN KARAMANIAN
401 S Old Woodward Ave., Ste 450
Birmingham, MI 48009
Telephone: (248) 258-6262
E-mail: dob@obryanlaw.net
The Defendant-Appellant is represented by:
John J. Walsh, Esq.
FREEHILL HOGAN AND MAHAR LLP
80 Pine Street
New York, NY 10005-1759
Telephone: (212) 425-1900
Facsimile: (212) 425-1901
E-mail: walsh@freehill.com
MOLYCORP INC: Motion to Dismiss "Albano" Securities Suit Pending
----------------------------------------------------------------
A motion to dismiss claims in a suit lodged by Angelo Albano
against Molycorp, Inc. has been fully briefed and is pending,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
In February 2012, a purported class action lawsuit captioned,
Angelo Albano, Individually and on Behalf of All Others Similarly
Situated v. Molycorp, Inc., et al., was filed against the Company
and certain of its executive officers in the U.S. District Court
for the District of Colorado.
This federal court action alleges, among other things, that the
Company and those officers violated Section 10(b) of the
Securities Exchange Act of 1934 in connection with statements
relating to its third quarter fiscal 2011 financial results and
fourth quarter 2011 production guidance that the Company had filed
with or furnished to the SEC, or otherwise made available to the
public.
In July 2012, the plaintiffs filed an amended consolidated class
action complaint against the Company, certain of its officers and
directors, certain of its private equity investors, and certain
underwriters involved in the company's public offerings in 2011.
The amended complaint alleges, among other things, that some or
all of the defendants violated Sections 10(b), 20(a) and 20A of
the Securities Exchange Act of 1934 as well as Sections 11,
12(a)(2) and 15 of the Securities Act. The plaintiffs are seeking
unspecified damages and other relief.
In October 2012, the defendants filed a motion to dismiss all the
claims in the amended complaint. The motion has been fully briefed
and is pending. No hearing date has been set.
NBTY INC: Awaits Final Approval of "Hutchins" Suit Settlement
-------------------------------------------------------------
NBTY, Inc. is awaiting final approval of its settlement of a class
action lawsuit filed by John F. Hutchins, according to the
Company's May 13, 2013, Form 10-Q filing with the U.S. Securities
and Exchange Commission for the quarter ended March 31, 2013.
On May 11, 2010, a putative class-action, captioned John F.
Hutchins v. NBTY, Inc., et al, was filed in the United States
District Court, Eastern District of New York, against NBTY and
certain current and former officers, claiming that the defendants
made false material statements, or concealed adverse material
facts, for the purpose of causing members of the class to purchase
NBTY stock at allegedly artificially inflated prices. An amended
complaint, seeking unspecified compensatory damages, attorneys'
fees and costs, was served on February 1, 2011. NBTY moved to
dismiss the amended complaint on March 18, 2011, and that motion
was denied on March 6, 2012. On September 28, 2012, the court set
a January 22, 2013 trial date. On November 12, 2012, at a
mediation, the parties reached an agreement in principle, subject
to agreement on settlement documentation and court preliminary
approval to settle the claims for $6 million, to be paid from
insurance proceeds. In February 2013, the court signed an order
preliminarily approving the proposed settlement and setting a
hearing on June 5, 2013, to determine whether the settlement
should receive final approval.
Headquartered in Ronkonkoma, New York, NBTY, Inc., is a global
vertically integrated manufacturer, distributor and retailer of a
broad line of high-quality vitamins, nutritional supplements and
related products in the United States, with operations worldwide.
The Company markets numerous private-label and owned brands,
including Nature's Bounty(R), Ester-C(R), Balance Bar(R),
Solgar(R), MET-Rx(R), American Health(R), Osteo Bi-Flex(R), Flex-
A-Min(R), SISU(R), Knox(R), Sundown(R), Rexall(R), Pure
Protein(R), Body Fortress(R), Worldwide Sport Nutrition(R),
Natural Wealth(R), Puritan's Pride(R), Holland & Barrett(R), GNC
(UK)(R), Physiologics(R), De Tuinen(R), and Vitamin World(R).
NBTY INC: Awaits OK of Glucosamine-Based Supplements Suits Deal
---------------------------------------------------------------
NBTY, Inc., awaits preliminary approval of its settlement of class
action lawsuits over its glucosamine-based dietary supplements,
according to the Company's May 13, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Beginning in June 2011, certain putative class actions have been
filed in various jurisdictions against the NBTY, its subsidiary
Rexall Sundown, Inc. ("Rexall"), and/or other companies as to
which NBTY may have a duty to defend and indemnify, challenging
the marketing of glucosamine- based dietary supplements, under
various states' consumer protection statutes. The lawsuits
against the Company and its subsidiaries are: Cardenas v. NBTY,
Inc. and Rexall Sundown, Inc. (filed June 14, 2011) in the United
States District Court for the Eastern District of California, on
behalf of a putative class of California consumers seeking
unspecified compensatory damages based on theories of restitution
and disgorgement, plus punitive damages and injunctive relief;
Jennings v. Rexall Sundown, Inc. (filed August 22, 2011, in the
United States District Court for the District of Massachusetts, on
behalf of a putative class of Massachusetts consumers seeking
unspecified trebled compensatory damages), and Nunez v. NBTY, Inc.
et al. (filed March 1, 2013) in the United States District Court
for the Southern District of California, on behalf of a putative
class of California consumers seeking unspecified compensatory
damages based on theories of restitution and disgorgement, plus
injunctive relief, as well as other cases in California and
Illinois against certain wholesale customers as to which the
Company may have certain indemnification obligations. The cases
are in various stages of discovery, with the following exceptions:
in one of the Illinois cases, a motion to dismiss was granted with
leave to appeal, the Jennings case is trial ready for a trial of
limited issues, and the Nunez case is newly filed.
In March 2013, NBTY agreed upon a proposed settlement with the
plaintiffs, which includes all cases and resolves all pending
claims without any admission of or concession of liability by
NBTY. The parties have signed settlement documentation which has
been submitted for court approval providing for a release of all
claims in return for payments to the class, together with
attorneys' fees, and notice and administrative costs estimated to
be in the range of $8 million to $15 million. Until such
settlement is approved and entered by the court, however, no
determination can be made as to the ultimate outcome of the
litigation or the amount of liability, if any, on the part of the
defendant. NBTY recorded a provision of $12 million as the
Company's best estimate associated with this proposed settlement
during the fiscal quarter ended March 31, 2013.
Headquartered in Ronkonkoma, New York, NBTY, Inc., is a global
vertically integrated manufacturer, distributor and retailer of a
broad line of high-quality vitamins, nutritional supplements and
related products in the United States, with operations worldwide.
The Company markets numerous private-label and owned brands,
including Nature's Bounty(R), Ester-C(R), Balance Bar(R),
Solgar(R), MET-Rx(R), American Health(R), Osteo Bi-Flex(R), Flex-
A-Min(R), SISU(R), Knox(R), Sundown(R), Rexall(R), Pure
Protein(R), Body Fortress(R), Worldwide Sport Nutrition(R),
Natural Wealth(R), Puritan's Pride(R), Holland & Barrett(R), GNC
(UK)(R), Physiologics(R), De Tuinen(R), and Vitamin World(R).
OLD REPUBLIC: ORNTIC Subsidiary Still Faces Suits Over Premiums
---------------------------------------------------------------
The principal title insurance subsidiary of Old Republic
International Corporation continues to face suits in federal
courts in Pennsylvania and Texas over premiums charged for title
insurance covering mortgage refinancing transactions, according to
the parent company's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
Purported class action lawsuits are pending against the Company's
principal title insurance subsidiary, Old Republic National Title
Insurance Company ("ORNTIC"), in federal courts in two states -
Pennsylvania (Markocki et al. v. ORNTIC, U.S. District Court,
Eastern District, Pennsylvania, filed June 8, 2006), and Texas
(Ahmad et al. v. ORNTIC, U.S. District Court, Northern District,
Texas, Dallas Division, filed February 8, 2008).
The plaintiffs allege that ORNTIC failed to give consumers reissue
and/or refinance credits on the premiums charged for title
insurance covering mortgage refinancing transactions, as required
by rate schedules filed by ORNTIC or by state rating bureaus with
the state insurance regulatory authorities.
The Pennsylvania suit also alleges violations of the federal Real
Estate Settlement Procedures Act ("RESPA"). The Court in the Texas
suit dismissed similar RESPA allegations. Classes have been
certified in the Pennsylvania suit, but the 5th Circuit Court of
Appeals has reversed the earlier class certification in the Texas
case.
OLD REPUBLIC: Overcharged Title Recording Fees Suit in Discovery
----------------------------------------------------------------
Discovery is ongoing in the lawsuit filed against Old Republic
Title Company of Kansas City and Old Republic National Title
Insurance Company in the state court in Kansas City, Missouri over
allegations that the companies overcharged title recording fees in
a number of states, according to Old Republic International
Corporation's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
A putative class action filed in state court in Kansas City,
Missouri on December 7, 2006 (Painter et al. v. Old Republic Title
Company of Kansas City and Old Republic National Title Insurance
Company) alleges that the companies overcharged title recording
fees in a number of states. No class has yet been certified.
Though the suit is not expected to result in any material
liability to the Company, the expenses of reviewing individual
closing files as a part of the discovery which the Company has
been ordered to undertake have been substantial and may continue.
OLD REPUBLIC: Enters Accord in Ala. Suit Alleging RESPA Violation
-----------------------------------------------------------------
Plaintiffs in the suit Barker v. Old Republic Home Protection that
alleges violation of the Real Estate Settlement Procedures Act
(RESPA) agreed to settle the case, according to Old Republic
International Corporation's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On May 22, 2009, a purported national class action suit was filed
in the U.S. District Court in Birmingham, Alabama (Barker v. Old
Republic Home Protection) alleging that Old Republic Home
Protection paid fees to the real estate brokers to market its home
warranty contracts and that the payment of such fees was in
violation of Sections 8(a) and 8(b) of RESPA.
The suit sought unspecified damages, including treble damages
under RESPA. The Company prevailed on its motion to deny class
certification, and on April 3, 2013 plaintiff agreed to settle the
case for a nominal payment to the named plaintiff.
OLD REPUBLIC: RMIC Sued Over Alleged Kickback, Fee Splitting
------------------------------------------------------------
Republic Mortgage Insurance Company is seeking to dismiss federal
lawsuits alleging it violated the anti-kickback and fee splitting
prohibitions of Sections of Real Estate Settlement Procedures Act,
according to Old Republic International Corporation's May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Four purported class action suits alleging RESPA violations have
been filed in the Federal District Courts, two in the Central
District of California and two in the Eastern District of
Pennsylvania, respectively, between December 9, 2011 and January
4, 2013.
The suits target RMIC and most of the other mortgage guaranty
insurance companies and J.P. Morgan Chase Bank, N.A., the PNC
Financial Services Group, Inc. as successor to National City Bank,
N.A., HSBC Bank USA, N.A., and Wachovia Bank, N.A., and each of
the lenders' wholly-owned captive insurance subsidiaries. (Samp,
Komarchuk, Whitaker v. J.P. Morgan Chase Bank, N.A., et al.;
White, Hightower v. The PNC Financial Services Group, Inc., et al;
Orange v. Wachovia Bank, N.A., et al.; and Ba, Chip, et al. v.
HSBC Bank USA, N.A., et al).
The lawsuits, filed by the same law firms, are substantially
identical in alleging that the mortgage guaranty insurers had
reinsurance arrangements with the defendant banks' captive
insurance subsidiaries under which payments were made in violation
of the anti-kickback and fee splitting prohibitions of Sections
8(a) and 8(b) of RESPA. Each of the suits seeks unspecified
damages, costs, fees and the return of the allegedly improper
payments. A class has not been certified in any of the suits. RMIC
has filed or will be filing motions to dismiss in all of the
cases.
OLD REPUBLIC: Settles Labor Suit by Escrow Employees in Calif.
--------------------------------------------------------------
Old Republic Title Company reached a tentative agreement to settle
a labor lawsuit filed in the Superior Court of California for
Orange County by escrow officers and escrow assistants in the
State of California, according to Old Republic International
Corporation's May 9, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 31,
2013.
A purported state class action suit was filed against Old Republic
Title Company in the Superior Court of California for Orange
County on January 7, 2011, on behalf of the Company's escrow
officers and escrow assistants in the State of California.
(Hinrichs v. Old Republic Title Company).
The Company filed a demur to the complaint, and in response,
plaintiff filed an Amended Complaint on January 5, 2012 adding
another named plaintiff. The suit alleged that the Company failed
to pay overtime, failed to calculate overtime properly, denied
meal breaks and rest breaks and failed to itemize pay statements,
in violation of the California Labor Code and seeks compensatory
damages, statutory penalties, interest, costs and attorneys' fees
for the period from January 7, 2007 to the present.
On January 11, 2013 a tentative settlement was reached calling for
the Company's payment to the plaintiffs, the class and their
lawyers. The Company has recorded its estimated liability as of
March 31, 2013.
OLD REPUBLIC: "Friedman" Lawsuit Now in Calif. Federal Court
------------------------------------------------------------
A suit alleging Old Republic Home Protection Company violated
various provisions of the California Civil Code and Business and
Professions Code is now before the U.S. District Court for the
Central District of California, according to Old Republic
International Corporation's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
On September 26, 2012 a purported national class action suit was
filed against Old Republic Home Protection Company in the Superior
Court of California for Riverside County. (Friedman v. Old
Republic Home Protection Company, Inc.).
The suit alleges that the Company operates in breach of its home
warranty contracts, in breach of implied covenants of good faith
and fair dealing, in violation of various provisions of the
California Civil Code and Business and Professions Code and is
guilty of false advertising.
The stated class period is from November 24, 2004 through the
present. The suit seeks declaratory relief, injunctive relief,
restitution, damages, costs and attorneys' fees in unspecified
amounts. The firm representing the plaintiff had previously filed
similar suits against the Company, which were unsuccessful.
The Company succeeded in having the case removed to the U.S.
District Court for the Central District of California on October
24, 2012, and believes it has strong defenses to the allegations
and to the certification of any class in this matter.
OUTDOOR CHANNEL: Signs MOU to Settle "Feinstein" Class Suit
-----------------------------------------------------------
Outdoor Channel Holdings, Inc., entered into a memorandum of
understanding to settle a merger-related class action lawsuit,
according to the Company's May 13, 2013, Form 8-K filing with the
U.S. Securities and Exchange Commission.
On March 13, 2013, the Company entered into a definitive merger
agreement with Kroenke Sports & Entertainment, LLC ("KSE"). The
Company expects the KSE transaction, which is subject to
stockholder approval, to be completed in the second quarter of
2013.
On May 2, 2013, the Company amended its definitive merger
agreement with KSE to increase the all-cash consideration for the
Company's outstanding shares from $8.75 per share to $9.35 per
share. On May 3, 2013, the Company received an all-cash offer
from InterMedia Outdoors Holdings, LLC ("InterMedia") for $9.75
per share under essentially the same terms and conditions as the
proposed KSE merger. On May 8, 2013, the Company and KSE further
amended the merger agreement to increase the all-cash
consideration to $10.25 per share, to increase the break-up fee to
$7.5 million and to amend the support agreement to require the
directors and certain executive officers to vote in favor of the
KSE merger, even if the Board determines an alternative proposal
is superior. The merger transaction is subject to stockholder and
other customary approvals.
On March 18, 2013, a putative class action, entitled Feinstein v.
Outdoor Channel Holdings, Inc., et al., No. 8412, was filed
against Outdoor Channel, the members the Outdoor Channel Board,
KSE and Merger Sub in the Court of Chancery of the State of
Delaware. The complaint purports to be brought on behalf of all
the Outdoor Channel stockholders (excluding the defendants and
their affiliates). The complaint alleges that the consideration
in the merger agreement with KSE is inadequate and that the
Outdoor Channel Board breached their fiduciary duties by failing
to undertake an adequate sales process and agreeing to preclusive
deal protection devices. The complaint further alleges that KSE
and Merger Sub aided and abetted the purported breach of those
fiduciary duties. The complaint seeks various forms of relief,
including injunctive relief that would, if granted, prevent the
completion of the merger.
On May 13, 2013, after certain discovery had been taken, counsel
for the parties in the lawsuit entered into a memorandum of
understanding in which they agreed upon the terms of a settlement
of the litigation, which would include the dismissal with
prejudice of all claims against all of the defendants, including
Outdoor Channel and its directors. The proposed settlement is
conditional upon, among other things, the execution of an
appropriate stipulation of settlement, consummation of the merger
and final approval of the proposed settlement by the court.
Outdoor Channel Holdings, Inc. -- http://www.outdoorchannel.com/
-- is a Delaware corporation headquartered in Temecula,
California. The Company is an entertainment and media company
with operations in three segments: The Outdoor Channel, Inc., the
Production Services segment comprised of Winnercomm, Inc., and the
Aerial Cameras segment comprised of CableCam, LLC and SkyCam, LLC.
PANTRY INC: Discloses Updates on "Hot Fuel" Suits
-------------------------------------------------
Pantry Inc., in its May 7, 2013, Form 10-Q filing with the U.S.
Securities and Exchange Commission for the quarter ended March 28,
2013, provided updates on lawsuits filed by fuel purchasers
seeking implementation of automated temperature controls and/or
certain disclosures related to temperature and its effect on the
energy content of motor fuel.
In May 2010, in a lawsuit in which Pantry Inc. is not a party, the
Court granted class certification to Kansas fuel purchasers
seeking implementation of automated temperature controls and/or
certain disclosures, but deferred ruling on any class for damages.
Defendants sought permission to appeal that decision to the Tenth
Circuit in June 2010, and that request was denied on August 31,
2010.
On November 12, 2011, Defendants in the Kansas case filed a motion
to decertify the Kansas classes in light of a new favorable United
States Supreme Court decision. On January 19, 2012, the Judge
denied the Defendants' motion to decertify and granted the
Plaintiffs' motion to certify a class as to liability and
injunctive relief aspects of Plaintiffs' claims. The court has
continued to deny certification of a damages class.
On September 24, 2012, the jury in the Kansas case returned a
verdict in favor of defendants finding that defendants did not
violate Kansas law by willfully failing to disclose temperature
and its effect on the energy content of motor fuel. On October 3,
2012 the judge in the Kansas case also ruled that defendants'
practice of selling motor fuel without disclosing temperature or
disclosing the effect of temperature was not unconscionable under
Kansas law.
On March 27, 2013, the judge ordered that plaintiffs' claims
against Chevron U.S.A. be severed in the three cases venued in
California and indicated that only the claims against Chevron
would be remanded for trial. On April 5, 2013 and April 9, 2013,
the judge granted class certification to plaintiffs on the
liability and injunctive relief aspects of their claims against
the non-settling defendants in the California cases. The
California non-settling defendants have filed Rule 23(f) petitions
for permission to appeal these orders. It appears that all
remaining cases will be stayed while these cases are tried. The
company is not a defendant in the California cases.
The company has opposed class certification and filed dispositive
motions in each of the cases in which the company have been sued.
At this stage of proceedings, losses are reasonably possible,
however, the company cannot estimate the company's loss, range of
loss or liability, if any, related to these lawsuits because there
are a number of unknown facts and unresolved legal issues that
will impact the amount of any potential liability, including,
without limitation:
(i) whether defendants are required, or even permitted under
federal and state law, to sell temperature adjusted
gallons of motor fuel;
(ii) the amounts and actual temperature of fuel purchased by
plaintiffs; and
(iii) whether or not class certification is proper in cases to
which the Company is a party. An adverse outcome in this
litigation could have a material effect on the company's
business, financial condition, results of operations and
cash flows.
RESIDENTIAL CAPITAL: To Escrow $450,000 for N.J. Class Suit Fees
----------------------------------------------------------------
Residential Capital LLC's plan support agreement with parent Ally
Financial Inc. contemplates a near-global resolution of
substantial litigation and a resolution of complex disputed
matters in the Debtors' Chapter 11 cases, to be implemented
through a plan structure that will yield substantial value for
creditors and facilitate the Debtors' exit from bankruptcy. An
important aspect of that structure is the settlement of a
securities class action pending against certain of the Debtors,
former directors and officers of the Debtors, and Ally Securities,
captioned New Jersey Carpenters Health Fund, et al. v. Residential
Capital, LLC, et al., pending in the U.S. District Court for the
Southern District of New York (Civ. No. 08-8781 (HB))(commonly
referred to as the "NJ Carpenters Action").
According to Gary S. Lee, Esq., at Morrison & Foerster LLP, in New
York -- glee@mofo.com -- the NJ Carpenters Claims are asserted on
behalf of a class of purchasers of certain residential mortgage-
backed securities issued by the Debtors based on alleged
misstatements in the securities' offering materials. On behalf of
the class, the lead plaintiff asserts claims on RMBS certificates
with face value of approximately $27 billion. Under the PSA and
the Settlement Agreement, the parties have agreed to settle the NJ
Carpenters Claims in exchange for payment to the class of
$100,000,000 under a contemplated joint plan of reorganization.
Pursuant to the Settlement Agreement, the Debtors have also agreed
to deposit $450,000 into an escrow account following preliminary
approval of the NJ Carpenters Settlement in the District Court.
The escrow account will be maintained and controlled by Lead
Counsel. The Notice Amount will be available to pay costs, fees
and expenses that are incurred by the claims administrator
selected by the Lead Plaintiff in connection with (a) providing
Notice to the members of the class action; and (b) administering
the claims process in the class action. Ultimately, the Notice
Amount will be deducted from the Settlement Amount.
Accordingly, the Debtors sought and obtained authority from the
U.S. Bankruptcy Court to advance the funds into escrow to be used
to pay for the costs to notify potential class members of the
proposed settlement of the NJ Carpenters Claims.
The Debtors are also represented by Joel C. Haims, Esq., James J.
Beha II, Esq., and Naomi Moss, Esq., at Morrison & Foerster LLP,
in New York.
About Residential Capital
Residential Capital LLC is one of the country's largest mortgage
originators and servicers. The Company, a subsidiary of Ally
Financial Inc., filed for bankruptcy protection on May 14, 2012,
in New York.
TORCHMARK CORPORATION: October Trial Set in Suit v. Subsidiary
--------------------------------------------------------------
The trial in a case against Torchmark Corporation's subsidiary has
been continued until October 21, 2013 after a denial of class
certification in the suit, according to the company's May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
Torchmark Corporation subsidiary, United American was named as
defendant in purported class action litigation filed on May 31,
2011 in Cross County Arkansas Circuit Court and subsequently
removed to the United States District Court, Eastern District of
Arkansas (Kennedy v. United American Insurance Company (Case No.
2:11-cv-00131-SWW).
In the litigation, filed on behalf of a proposed nationwide class
of owners of certain limited benefit hospital and surgical expense
policies from United American, the plaintiff alleged that United
American breached the policy by failing and/or refusing to pay
benefits for the total number of days an insured is confined to a
hospital and by limiting payment to the number of days for which
there are incurred hospital room charges despite policy
obligations allegedly requiring United American to pay benefits
for services and supplies in addition to room charges.
Claims for unjust enrichment, breach of contract, bad faith
refusal to pay first party benefits, breach of the implied duty of
good faith and fair dealing, bad faith, and violation of the
Arkansas Deceptive Trade Practices Act were initially asserted.
The plaintiff sought declaratory relief, restitution and/or
monetary damages, punitive damages, costs and attorneys' fees. In
September 2011, the plaintiff dismissed all causes of action,
except for the breach of contract claim.
On November 14, 2011, plaintiff filed an amended complaint based
upon the same facts asserting only breach of contract claims on
behalf of a purported nationwide restitution/monetary relief class
or, in the first alternative, a purported multiple- state
restitution/monetary relief class or, in the second alternative, a
purported Arkansas statewide restitution/monetary relief class.
Restitution and/or monetary relief for United American's alleged
breach of contract, costs, attorney's fees and expenses, expert
fees, prejudgment interest and other relief were being sought on
behalf of the plaintiff and members of the class. On December 7,
2011, United American filed a Motion to Dismiss the plaintiff's
amended complaint, which the Court subsequently denied on July 24,
2012.
On September 28, 2012, plaintiff filed a second amended and
supplemental complaint with the same allegations on behalf of a
nationwide class or alternatively, an Arkansas statewide class
limited to GSP2 policies. Plaintiff filed a third supplemental and
amending class action complaint and a motion for leave to file to
file an amended complaint on November 21, 2012 again with the same
allegations but a different plaintiff class and alternatively, for
sub-classes or a multistate class, which was opposed by United
American.
Plaintiff also filed a motion for class certification on November
21, 2012. On December 28, 2012, United American filed its response
to plaintiffs' motion for class certification. On April 3, 2013,
the Court denied plaintiff's motion for class certification and
plaintiff's motion for leave to file a third amended complaint.
The trial of this case has been continued until October 21, 2013.
TORCHMARK CORPORATION: Cal. Court Dismisses TCPA Violations Suit
----------------------------------------------------------------
The U.S. District Court for the Southern District of California
granted a motion by Torchmark Corporation to dismiss a suit
alleging it violated the Telephone Consumer Protection Act,
according to the company's May 9, 2013, Form 10-Q filing with the
U.S. Securities and Exchange Commission for the quarter ended
March 31, 2013.
Torchmark and its subsidiary, United American were named as
defendants in purported class action litigation filed November 27,
2012 in U.S. District Court for the Southern District of
California (Friedman, et al. v. Torchmark Corporation, et al.,
Case No. 12CV2837 IEGBGS).
In the litigation, filed on behalf of a nationwide class of
persons who had, within four years of the filing of the complaint,
received any sales or solicitation telephone calls from Torchmark
and United American to telephone numbers registered with the
National Do Not Call Registry and who had not maintained a
business relationship with the defendants within eighteen months
of receiving defendants' calls, plaintiff asserted violations of
the Telephone Consumer Protection Act (47 U.S.C. 27 et seq.) by
virtue of pre-recorded calls inviting the plaintiff to contact
United American to attend a "recruiting webinar". Monetary damages
for each separate violation of TCPA were sought.
On January 3, 2013, motions to dismiss were filed on behalf of
Torchmark (not objected to by plaintiff) and United American
(objected to by plaintiff). The Court granted Torchmark's motion
to dismiss on February 20, 2013 and United American's motion to
dismiss on April 16, 2013, with leave to the plaintiff to file an
amended complaint against Untied American by May 7, 2013.
VOTORANTIM CIMENTOS: Defends Class Suit Alleging Cartel Formation
-----------------------------------------------------------------
Votorantim Cimentos S.A. continues to defend itself against a
class action lawsuit alleging breach of Brazilian antitrust law as
a result of alleged cartel formation, according to the Company's
May 13, 2013, Form F-1/A filing with the U.S. Securities and
Exchange Commission.
The Office of the Public Prosecutor of Rio Grande do Norte filed a
civil class action against Votorantim Cimentos S.A. (VCSA),
together with eight other defendants, including several of
Brazil's largest cement manufacturers alleging breach of Brazilian
antitrust law as a result of alleged cartel formation, and
seeking, among other things, that: (1) the defendants pay an
indemnity, on joint basis, in the amount of R$5,600 million in
favor of the class action plaintiffs for moral and collective
damages; (2) the defendants pay 10.0% of the total amount paid for
cement or concrete acquired by the consumers of the brands
negotiated by the defendants, between the years 2002 and 2006; and
(3) the defendants suffer the following penalties under Articles
23, Item I and 24 of the Law No. 8.884/94: (i) in addition to the
fine referred to in item (1), a fine ranging from 1.0% to 30.0% of
the annual after-tax revenues relating to the fiscal year
immediately prior to the year in which the administrative
proceeding was initiated, and deriving from the cement business
activities of Votorantim Industrial S.A. (VID) and its
subsidiaries, which may never be in an amount less than the
monetary advantage gained; and (ii) ineligibility, for a period of
at least five years, to obtain financing from governmental
financial institutions or to participate in competitive government
bidding processes conducted by federal, state or municipal
governmental entities or with governmental agencies.
Because the total amount of the claims referred to in item (1)
amounts to R$5,600 million and the claims allege joint liability,
the Company has estimated that, based on its market share, its
share of the liability would be approximately R$2,400 million.
However, there can be no assurance that this apportionment would
prevail and that the Company will not be held liable for a
different portion, which may be larger, or for the entire amount
of this claim. The Company's expectation of loss under this
matter is considered possible, and the Company has not established
any provision for this claim. It is also not possible to ensure
that the Company will not be required to pay other amounts as
compensation for damages caused to consumers in accordance with
item (2), and/or the fine referred to in item (3).
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
VOTORANTIM CIMENTOS: Negotiates Deal to Settle Serra do Mar Suit
----------------------------------------------------------------
The parties in the class action lawsuit alleging Votorantim
Cimentos S.A. and other defendants' operations are causing serious
environmental damage in the Serra do Mar region are currently
negotiating a settlement with the Public Prosecutor of the State
of Sao Paulo, according to the Company's May 13, 2013, Form F-1/A
filing with the U.S. Securities and Exchange Commission.
The Office of the Public Prosecutor of the State of Sao Paulo has
filed a civil class action against Votorantim Cimentos S.A.
("VCSA") and other companies alleging that their respective
operations are causing serious environmental damage in the Serra
do Mar region and consequently seeking indemnification to
compensate such damage. The court has ordered expert testimony to
estimate the environmental damages in the Serra do Mar region.
However, this expert testimony has not yet been completed given
that the appointed expert has declined to testify. This civil
class action was last suspended in May 2012 for a term of 90 days.
The suspension was renewed for another 90-day period commencing in
August 2012. The parties are currently negotiating a settlement
with the Public Prosecutor of the State of Sao Paulo. Based on
the advice of its external legal counsel, the Company believes the
probability of loss under this claim is probable, and the Company
has recorded a provision of R$1.8 million in connection with this
claim.
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
VOTORANTIM CIMENTOS: Still Awaits Expert Report in Imbituba Suit
----------------------------------------------------------------
Votorantim Cimentos S.A. is still waiting for an expert report to
be prepared and issued in the class action lawsuit alleging that
thestorage and transportation of petcoke in the Port of Imbituba
resulted in environmental damage, according to the Company's
May 13, 2013, Form F-1/A filing with the U.S. Securities and
Exchange Commission.
In July 2011, the Associacao dos Moradores da Rua de Baixo, the
Instituto Conexao Ambiental and the Associacao de Surf de Imbituba
filed a class action against CRB Operacoes Portuarias S.A., or
CRB, the Company's indirect subsidiary, Companhia Docas de
Imbituba, the city of Imbituba and the Fundacao do Meio Ambiente,
or FATMA, claiming that the storage and transportation of petcoke
in the Port of Imbituba resulted in environmental damage and also
adversely affected the health of residents of the area. The
plaintiffs also claim that CRB breached a conduct agreement (termo
de ajustamento de conduta) it entered into with the State
Attorney's Office, pursuant to which it: (1) would adopt steps
towards adequate storage of petcoke at the terminal of the Port of
Imbituba; (2) would adequately store petcoke in the terminal until
November 30, 2003; (3) would provide an environmental operating
permit to FATMA by the end of 2003; (4) would delay restrictions
on the use of the property of the city's fire department until the
end of the concession of the Port of Imbituba, intermediate with
the federal government the permanent transfer property ownership
to the facilities of the city's fire department and stimulate the
local business community by donating R$52,000 to the Fundo
Municipal do Corpo de Bombeiros, or FMCB, by the end of 2003; (5)
would donate R$100,000 to the FMCB for the acquisition of a
paramedical vehicle to be used in the city by the end of 2003; and
(6) the State Attorney would agree not to take any legal action
against the agencies, entities or individuals that signed the
conduct agreement in the event the conditions of the conduct
agreement were fulfilled during the applicable period. In
addition, an injunction was issued against CRB and other
defendants that prohibited these companies from storing and
transporting petcoke in the Port of Imbituba. CRB has provided
evidence demonstrating the renovations and investments made and
appealed the injunction that caused it to close its petcoke
operations at the port and appealed a daily fine of US$100,000 in
the event that CRB did not close its petcoke operations. As a
result of the appeal, the injunction was temporarily suspended.
On December 12, 2011, the CRB and the plaintiffs reached a partial
agreement before the District Court of Imbituba, pursuant to which
CRB has undertaken to carry out six proposed improvements.
Moreover, on January 5, 2012, CRB entered into an adjustment of
conduct agreement (termo de ajustamento de conduta) with FATMA,
pursuant to which FATMA agreed to reduce certain previously
imposed penalties in light of the costs involved in implementing
the improvements. In May 2012, the District Court of Imbituba
appointed expert testimony to provide support for the alleged
environmental damage arising from the storage of petcoke at the
terminal of the Port of Imbituba. The District Court notified the
parties to present their inquiries and the names of their
technical assistants.
The Company is currently waiting for the expert report to be
prepared and issued by the court's expert. Based on the advice of
its external legal counsel, CRB believes the probability of loss
under this claim is probable. The Company has not recorded any
provision with respect to this claim because this claim is related
to an obligation to limit the emissions of solid particles with
respect to the Company's future operations. The amount in dispute
is approximately R$1,000.
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
VOTORANTIM CIMENTOS: Still Awaits for Fla. AG and DOJs' Next Move
-----------------------------------------------------------------
Votorantim Cimentos S.A. still awaits next step to be taken by the
Florida Attorney General and the U.S. Department of Justice,
according to the Company's May 13, 2013, Form F-1/A filing with
the U.S. Securities and Exchange Commission.
Prestige Concrete Products was party to two consolidated civil
class actions alleging antitrust violations by a number of
companies having cement and ready-mix concrete operations in the
State of Florida. The court dismissed certain of the claims and
parties in motions to dismiss and subsequently refused to certify
any classes. The cases were all settled and/or voluntarily
dismissed in February and March 2012. Subsequent to the
commencement of the civil class actions, the Florida Attorney
General and the U.S. Department of Justice conducted
investigations having, to the Company's knowledge, similar subject
matter but a narrower scope than the civil class actions. The
last communications with either agency occurred in May 2012 with
no indication by either agency of any intention to conduct further
investigation or to file any charges.
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
VOTORANTIM CIMENTOS: Still Awaits Ruling in "Mato Grosso" Suit
--------------------------------------------------------------
On December 11, 2000, the Public Prosecutor of Mato Grosso filed a
civil class action against Votorantim Cimentos S.A. seeking the
annulment of certain environmental licenses granted to the Company
and the suspension of its operations in the Paraguai/Parana River.
The court excluded the Company from the civil class action and the
Public Prosecutor has appealed. In August 2007, a court, in a
unanimous decision, agreed that Brazilian Institute of the
Environment and Renewable Natural Resources (Instituto Brasileiro
do Meio Ambiente e dos Recursos Naturais Renovaveis), or IBAMA,
correctly granted the licenses to the Company. The Company is
awaiting a final decision from a higher court.
No further updates were reported in the Company's May 13, 2013,
Form F-1/A filing with the U.S. Securities and Exchange
Commission.
Based on the advice of its external legal counsel, the Company
believes the probability of loss under this claim is possible.
The Company has not recorded any provision with respect to this
claim.
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
VOTORANTIM CIMENTOS: Still Defends "Oliveira" Suit vs. Unit
-----------------------------------------------------------
In August 2007, Marcelo Soares de Oliveira filed a class action
(acao popular) against Votorantim Cimentos S.A.'s subsidiary
Votorantim Cimentos Norte e Nordeste S.A. (VCNNE), the legal
representative of Companhia de Mineracao do Tocantins -
Mineratins, the State of Tocantins, State Governor of Tocantins
and the President of the Permanent Commission for Tender Processes
of the Treasury Secretariat of State of Tocantins, claiming that
the tender process by means of which VCNNE won the rights to be
the assignee of the mineral rights related to the DNPM Process No.
860.933/1982 then held by Companhia de Mineracao do Tocantins -
Mineratins should be nullified due to failure in the tender
procedures which shall cause damages to the State Treasury. It is
also requested an injunction in order to immediately suspend the
effects of the tender, which has not been decided by the court
yet.
In May 2008, VCNNE presented defense arguing that such lawsuit is
related (conexo) to another lawsuit and, therefore, this new one
should be judged together with the previously filed one and
requesting the lawsuit to be dismissed. In April 2009, the State
Prosecutor agreed that the lawsuits are related and should be
judged together. The expectation of loss under this claim is
considered possible and the Company has not recorded any provision
in connection with this claim.
No further updates were reported in the Company's May 13, 2013,
Form F-1/A filing with the U.S. Securities and Exchange
Commission.
Votorantim Cimentos S.A. -- http://www.vcimentos.com.br/-- is a
global vertically-integrated heavy building materials company,
with operations in North and South America, Europe, Africa and
Asia. The Company is headquartered in Sao Paulo, Brazil.
WMS INDUSTRIES: Illinois Court Dismisses Securities Lawsuit
-----------------------------------------------------------
The U.S. District Court for the Northern District of Illinois
granted a motion by WMS Industries Inc. to dismiss a securities
lawsuit filed against it, according to the company's May 9, 2013,
Form 10-Q filing with the U.S. Securities and Exchange Commission
for the quarter ended March 31, 2013.
On May 25, 2011, a putative class action was filed against the
company and certain of the company's executive officers in the
U.S. District Court for the Northern District of Illinois by Wayne
C. Conlee (the "Conlee lawsuit").
On October 13, 2011, the lead plaintiff filed an amended complaint
in the Conlee lawsuit. As amended, the lawsuit alleged that,
during the period from September 21, 2010 to August 4, 2011, (the
date the company announced the company's fiscal 2011 financial
results), the company made material misstatements and omitted
material information related to the company's fiscal year 2011
guidance.
Plaintiff sought to certify a class of stockholders who purchased
stock between these dates. The lawsuit specifically alleged
violations of (i) Section 10(b) of the Securities Exchange Act of
1934, as amended (the "34 Act"), and Rule 10b-5 promulgated
thereunder and (ii) Section 20(a) of the 34 Act. The amended
complaint sought unspecified damages. The company filed a motion
to dismiss the amended complaint on December 8, 2011, and, on July
25, 2012, the Court granted the company's motion without
prejudice.
On September 12, 2012, the Plaintiffs filed a further amended
complaint, which re-asserts claims under Sections 10(b) and 20(a)
of the 34 Act and under SEC Rule 10b-5. The company filed a
motion to dismiss the further amended complaint on October 26,
2012. On November 30, 2012, the Plaintiffs filed their opposition
to the company's motion. The company filed the company's reply
memorandum on December 21, 2012 and on April 24, 2013, the court
granted the company's motion to dismiss with prejudice. The
company has been advised that the plaintiffs may file a motion for
reconsideration or may appeal the decision and the period for such
actions is not yet expired.
WMS INDUSTRIES: Ill. Suits Over Scientific Merger Consolidated
--------------------------------------------------------------
Plaintiffs in the suit Gardner v. WMS Industries, Scientific Games
Corp. and the three other actions filed in Illinois moved for and
obtained consolidation of all the Illinois cases into the Gardner
Action, which is pending resolution, according to WMS Industries'
May 9, 2013, Form 10-Q filing with the U.S. Securities and
Exchange Commission for the quarter ended March 31, 2013.
The following complaints challenging the merger of WMS and
Scientific Games Corporation have been filed in various
jurisdictions:
(i) in the Delaware Court of Chancery, Shaev v. WMS
Industries, Gamache, et al., (C.A. No. 8279);
(ii) in the Circuit Court of Cook County, Illinois, Chancery
Division, Gardner v. WMS Industries, Scientific Games
Corp., et al., No. 2013 CH 3540 (Ill. Cir., Cook
County);
(iii) in the Circuit Court of the Nineteenth Judicial Circuit
of Lake County, Illinois, Gil v. WMS Industries,
Scientific Games Corp., et al., No. 13 CH 0473 (Ill.
Cir., Lake County);
(iv) in the Delaware Court of Chancery, Hornsby v. Gamache,
et al. (C.A. No. 8295);
(v) in the Circuit Court of the Nineteenth Judicial Circuit
of Lake County, Illinois, Sklodowski v. WMS Industries,
Inc. et al., (Ill. Cir., Lake County);
(vi) in the Delaware Court of Chancery, Barresi v. WMS
Industries Inc., Gamache, et al., (C.A. No. 8326); and
(vii) in the Circuit Court of Cook County, Illinois, Chancery
Division, Plumbers & Pipefitters Local 152 Pension Fund
and UA Local 152 Retirement Annuity Fund v. WMS
Industries Inc., Gamache, et al., (Ill. Cir., Cook
County).
Each of the actions is a putative class action filed on behalf of
the public stockholders of WMS and names as defendants the
Company, its directors and Scientific Games. The Shaev, Hornsby,
Barresi and Plumbers & Pipefitters actions also name Merger Sub
and Financing Sub as defendants. The complaints generally allege
that the individual defendants breached their fiduciary duties in
connection with their consideration and approval of the merger and
that the entity defendants aided and abetted those alleged
breaches. The complaints seek, among other relief, declaratory
judgment and an injunction against the merger.
On February 25, 2013, the Delaware Court of Chancery consolidated
the Delaware actions under In re WMS Industries Inc. Stockholder
Litigation (C.A. No. 8279-VCP). On March 1, 2013, the plaintiffs
in the consolidated Delaware actions filed an amended complaint,
adding allegations that the disclosures in WMS' preliminary proxy
statement were inadequate.
On March 7, 2013, plaintiff Gardner filed a Motion for Leave to
File Amended Complaint, asserting the same claims being asserted
in the consolidated Delaware action. On March 8, 2013, plaintiff
Gardner filed a Motion for Limited Expedited Discovery in which
she requested an order permitting her to conduct limited expedited
document and deposition discovery in anticipation of bringing a
motion to enjoin the shareholder vote on the proposed merger.
On March 18, 2013, WMS and the individual defendants filed a
Motion to Dismiss or Stay the Gardner action because the claims
are duplicative of those being pursued in the Delaware
consolidated action. On March 19, 2013, WMS and the individual
defendants filed an opposition to plaintiff Gardner's Motion for
Limited Expedited Discovery. Also on March 19, 2013, plaintiffs in
the consolidated Delaware action submitted a letter to the
Delaware Chancery Court stating that they had conferred with
plaintiffs in the Illinois actions and agreed to stay the
consolidated Delaware action.
On March 20, 2013, plaintiffs Gardner, Plumbers & Pipefitters
Local 152 Pension Fund, and UA Local 152 Retirement Annuity Fund
filed a motion to consolidate the Cook County, Illinois actions.
On March 27, 2013, plaintiffs Gil and Sklowdowski filed a motion
to transfer the Lake County, Illinois actions to Cook County,
Illinois for consolidation with the Gardner action.
Plaintiffs in the Gardner Action and the three other actions filed
in Illinois moved for and obtained consolidation of all the
Illinois cases into the Gardner Action. On April 1, 2013,
plaintiffs in the Gardner Action filed a motion for a preliminary
injunction to enjoin the stockholder vote on the merger, scheduled
for May 10, 2013. On April 19, 2013, plaintiffs in all other
actions agreed to a stay pending resolution of the Gardner Action.
On April 26, 2013, lead counsel in the Gardner Action, on behalf
of counsel for all plaintiffs in all actions, agreed with counsel
for all defendants in the Gardner Action to withdraw their motion
for preliminary injunction and not to seek to enjoin the
stockholder vote in return for the agreement by WMS to make
certain supplemental disclosures related to the merger, all of
which were set forth in a Report on Form 8K that was filed with
the Securities and Exchange Commission on April 29, 2013. The
agreement with lead counsel for the plaintiffs in the Gardner
Action will not affect the amount of merger consideration that the
Company's stockholders are entitled to receive in the merger or
any other terms of the Merger Agreement.
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