galemmo - joint motion for order preliminarily approving class action se... (2)
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motion to approve willner settlementTRANSCRIPT
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II:KCfCL.RKK OF COURTS
IN THE COURT OF COMMON PLEAS HAMILTON COUNTYHAMILTON COUNTY, OHIO WS ~2101~
CYNTHIA KHOO-ROBINSON,CHARLES LYTLE, and JACKTENKMAN, individually and on behalfof all others similarly situated,
Plaintiffs,
vs.
MICHAEL WILLNER,
Defendant.
CASE NO. A1401348I RACY IIINItLER
COMMON PLEAS COURTS
JUDGE CARL STICH JR.
JOINT MOTION FOR ORDERPRELIMINARILY APPROVINGCLASS ACTION SETTLEMENT,APPROVING NOTICE TO THECERTIFIED CLASS, ANDSCHEDULING FINAL APPROVALHEARING
Plaintiffs Cynthia Khoo-Robinson, Charles Lytle, and Jack Tenkman ("Plaintiffs" ) andDefendant Michael Willner ("Willner"), by and through their undersigned counsel, jointly move
the Court for entry of an order preliminarily approving the Class Action Settlement Agreement
("Settlement Aureement") between Plaintiffs and Willner, a copy of which is attached at ExhibitA. An agreed proposed form of an order preliminarily approving the Settlement Agreement is
attached as Exhibit B (it is also an Exhibit to the Settlement Agreement). The Settlement
Agreement is fair, reasonable, and the product of arms'ength negotiation between the parties
and their counsel. If finally approved, it is projected to result in over $ 1,400,000 of financial
recovery lo the Class. For these and ihe other reasons discussed below, Plaintiffs and Willner
respectfully request that the Court preliminarily approve the Settlement Agreement.
I. Introduction
This case was brought by named plaintiffs Cynthia Khoo-Robinson, Charles Lytle, and
Jack Tenkman, individually and as representatives of a putative class, against Defendant Michael
Willner for fraudulent transfer under R.C.1336.04(A)(1)and (2), and unjust enrichment based on
Defendant's receipt of distributions from Glenn Galemmo and affiliated entities ("Galemmo*') in
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excess of what Defendant invested with Galemmo. Prior to July 17, 2013, Galemmo purported to
be an investment advisor providing investment services to persons and entities. On or about July
17, 2013, Galemmo notified his investors that his businesses had ceased operation. Subsequent
investigations revealed that Galennno had perpetrated a scheme to defraud his investors.
Plaintiffs and the Class consist of individuals who invested more money with Galemmo than was
distributed to them. Defendant Michael Willner was an investor with Galemmo. Over a number
of years, Willner received distributions from Galemmo in excess of the amount he invested with
him or them.
Plaintiffs contend that they are the rightful owners of any amounts Michael Willner
received in excess of what he invested with Galemmo. Plaintiffs claim that any such excess
received by Willner constituted fraudulent transfers under R.C. 1336.04(A)(I) and (2) and unjust
enrichment. Michael Willner asserts a number of defenses, including that: the claims are barred
because Willner was a good faith transferee for value; the claims are barred by and limited to the
extent of the value provided by Willner; the claims are barred by the statute of limitations; the
claims are preempted; and that the unjust enrichment claim is barred by a lack of privity between
Willner and Plaintiffs.
Counsel for Plaintiffs and counsel for Willner have diligently and aggressively
represented their respective clients in this matter. Plaintiffs have sought and received thousands
of pages of information relating to Willner's dealings with Galermno. In addition to the
substance of the claims and defenses, the parties have conferred extensively regarding Willner's
financial condition. Willner has responded to requests for financial information and submitted to
an interview by counsel for Plaintiffs. After investigation of the matters relating to the dispute,
the parties entered into settlement discussions, which culminated in a Settlement Agreement. The
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parties submit that the Settlement Agreement is fair, reasonable, and in the best interests of the
class.
As set forth in more detail in the Settlement Agreement, in exchange for a release of all
claims related to investments with and distributions from Galemmo, Willner agrees to pay the
projected amount of $1,425,699.00 (the "Settlement Fund" ) to be distributed pursuant to thefurther orders of the Court regarding attorneys'ees and division among the members of the
Class. As detailed in the Settlement Agreement, the Settlement Fund consists of: I) an InitialPayment of $1,022,699.00 that is being held in a trust account and can be paid immediately upon
the Effective Date of the Settlement Agreement; and 2) a Subsequent Payment in the projected
amount of $403,000.00 that will be paid within 45 days of the Effective Date upon Willner's sale
of certain shares in On-Ramp Wireless, which he purchased with distributions to him from his
Galemmo-related account.
Class Counsel has investigated Willner's financial condition, including his federal and
state tax filings. In consideration of the release provided to Willner in the Settlement Agreement,
Class Counsel has obtained an affidavit of financial condition from Willner ("Affidavit" ), a copyof which (redacted for sensitive personal information) is attached to the Settlement Agreement.
Willner has made representations and warranties in the Settlement Agreement regarding the truth
and accuracy of the Affidavit and his financial condition. The alternative to the Settlement
Agreement is substantial expense and delay arising from further legal proceedings, including the
possibility of a bankruptcy filing by Willner in California, all of which would result in a
diminution of the funds available to pay claims asserted by Plaintiffs and the Class.
Conversely, a substantial portion of the funds for Willner's obligation under the
Settlement Agreement are being held in trust by counsel and can be available to the Class as soon
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as the Settlement Agreement is approved and becomes effective. Based on these factors, and as
set forth below, Plaintiffs and Willner respectfully request that the Court preliminarily approve
the Settlement Agreement, authorize notice to the Class, and schedule a hearing on the issue of
final approval of the Settlement Agreement as fair, adequate, and reasonable.
II. Law Br, Argument
A. The Court should preliminarily approve the Settlement Agreement.
Approval of a class action settlement is entrusted to the discretion of the trial court. Eg,
In re Kroger Co Shareholders Litig., 70 Ohio App. 3d 52, 68, 590 N.E.2d 391,401-02 (Ohio I"
Dist. App. 1990). In reaching ultimate settlement of a class action, "[t]he settlement shall first be
preliminarily approved by the court." Thonen v McNeil-Akron, Inc., 661 F. Supp. 1271, 1276
(N.D. Ohio 1987).'he purpose of such a determination is to "determine whether the proposedsettlement is 'within the range of possible approval.'" Armstrong v. Board ofSchool Directors of
the City of Mlivaukee, 616 F.2d 305, 314 (7th Cir. 1980). As one court observed, "this
determination is similar to a determination that there is 'probable cause'o think the settlement is
fair and reasonable." Alaniz v. California Processors, Inc., 73 F.R.D.269, 273 (N.D. Cal. 1976).
A final hearing should be scheduled and notice to the class should be given once the settlement is
found to be "within the range of possible approval," Id,
In this case, the Settlement Agreement provides a substantial benefit more than $1.4
million in projected financial recovery to the Class. There will be no distribution until further
order of the Court to ensure that the recovery is distributed fairly and appropriately. The
Settlement Agreement was negotiated at arm's length by counsel for Plaintiffs and counsel for
Willner. It accounts for Willner's financial condition and the possibility of further legal
1 Ohio Civ. R. 23 is substantially similar to Fed. R. Civ. P. 23 and Ohio courts frequently look to federalcaselaw iu construing the state rule.
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proceedings (including potential a bankruptcy filing) that could frustrate or delay any recovery to
the Class. The Class will receive notice of the proposed Settlement Agreement and an
opportunity to be heard prior to final approval. For all of these reasons, the Court should enter an
order preliminarily approve the Class.
B. The Court should approve the proposed Notice to the Class.
The Settlement Agreement calls for written notice to members of the Class. A copy of the
proposed Class Notice is attached as Exhibit A to the Settlement Agreement. The proposed Class
Notice advises Class Members of their available rights, including the ability to ob1cct or opt-out
of the Settlement Agreement. The Settlement Agreement provides the Class Notice by mail (as
well as email, where addresses are known) and directs the filing of a copy of the Notice in other
Galemmo-related cases. This proposed manner of notice is reasonable, diligent, and provides
Class Members with the best notice practicable under the circumstances. Eg., West v. Carfax,
Inc., 2009-Ohio-6857, P19 (Ohio 11 App. Dist. 2009) (noting desirability of notice by mail
where possible); Eisen v. Cavlisle d'c Jacquelin, 417 U.S. 156, 175 (1974) (providing for
individualized notice to class members who are "identifiable through reasonable effort"). The
proposed Class Notice in this case satisfies all requirement of Ohio Civil Rule 23, surpasses due
process requirements, and provides class members with reasonable and practical notice under the
circumstances of this case.
III. Conclusion
For all of the foregoing reasons, Plaintiffs and Willner jointly request that the Court enter
an order in the form proposed as Exhibit B preliminarily approving the Settlement Agreement,
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approving and directing written notice to the Class, and scheduling a hearing on final approval.
Respectfully submitted,
5a. &tie fte n"w-&rScott A. Kane, Esq. (0068839)Joseph P. Ashbrook (0091279)SQUIRE PATTON BOGGS (US) LLP221 East Fourth Street, Suite 2900Cincinnati, Ohio 45202(513) 361-1200(513) 361-1201 - faxscott.kaneCa!sauirenb.corniosenh.ashbrook(a)souirenb.corn
Charles E. Reynolds (0019935)Brian P. O'onnor (0086646)SANTEN & HUGFIES600 Vine Street, Suite 2700Cincinnati, Ohio 45202(513) 721-4450(513) 721-0109 faxcer(a&[email protected]
Counsel for Willne& Counsel for Plaint&ffs
PROOF OF SERVICE
The undersigned certifies that a true and accurate copy of the foregoing was served via
U.S. mail and electronic mail on the following, this/ Eday of November, 2014:Scott A. Kane, Esq. (0068839)SQUIRE PATTON BOGGS (US) LLP221 East Fourth Street, Suite 2900Cincinnati, Ohio 45202(513) 361-1240(513) 361-1201 Faxscott.kane@squirepb, corn
Counsel for Willner
James R. Cummins, Esq.Phyllis E. Brown, Esq.CUMMINS & BROWN, LLC312 Walnut Street, Suite 1000Cincinnati, OH 45202
Richard S. Wayne, Esq,Brett M. P.enzenbrink, Esq.STRAUSS TROY CO., LPAThe Federal Reserve 13uilding150 East Fourth StreetCincinnati, OI-I 45202
Counsel for Interested Parties
Brian P. O'onnor
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EXHIBIT A
IN THE COURT OF COMMON PLEASHAMILTON COUNTY, OHIO
CYNTHIA IAiOO-ROBINSON,CHARLES LYTLE, and JACKTENKMAN, individually and onbehalf of all others similarly situated,
Plaintiffs,
CASE NO. A1401348
JUDGE CARL STICH JR.
vs.
MICHAEL WILLNKR,
Defendant.
CLASS ACTION SETTLEMENT AGREEMENT
This Class Action Settlement Agreement ("Settlement Aareement") is made by andbetween Cynthia Khoo-Robinson, Charles Lytle, and Jack Tenkman (the "Plaintiffs" ), on behalf
of themselves and on behalf of the Class (as defined below), on the one hand, and Defendant
Michael Willner ("Willner") on the other hand (Plaintiffs and Willner sometimes individually a
"Party" and collectively the "Parties" ) as of the date first set forth below, and is intended, subject
to approval by the Court, to resolve, discharge, and settle all claims by Plaintiffs and the Class
against Willner fully, finally, and forever according to the terms and conditions set forth below.
RECITALS
WHEREAS, prior to July 17, 2013, Glen Galemmo (*'Galemmo") purported to be an
investment advisor providing investment services to persons and entities;
WHEREAS, on or about July 17, 2013, Galemmo notified his investors that his
businesses had ceased operation and subsequent investigations revealed that Galemmo had
perpetrated a scheme to defraud his investors;
105335/7/c/Nc/NNAT/
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WHEREAS, Plaintiffs are individuals who invested more money with Galemmo than
was distributed to them, and seek to act on behalf of other members of the Class with regard to
this Settlement Agreement;
WHEREAS, Defendant Willner was an investor with Galemmo and his affiliates and
over a number of years, Willner received distributions from Galemmo and the Galemmo
Affiliates in excess of the amount he invested with him or them;
WHEREAS, this case was commenced with the filing of a Complaint on March 5, 2014;
WHEREAS, Plaintiffs filed a Motion for Class Certification pursuant to Ohio Civil
Rules 23(B)(1)(a),23(B)(1)(b),23(B)(2) and 23(B)(3)on June 2, 2014;
WHEREAS Defendant did not object to class certification and on June 19, 2014, the
Court issued an order certifying the Class;
WHEREAS, Counsel for Plaintiffs and counsel for Defendant have engaged in extensive
discovery and settlement discussions which have resulted in this Settlement Agreement;
WHEREAS, the pleadings and discovery in this and related actions have revealed the
existence of contested issues of fact and law, as well as issues relating to the collectability of any
judgment which might or might not be obtained;
WHEREAS, Willner denies any liability or wrongdoing, whether asserted in the
Complaint or otherwise and wishes to enter into this Settlement Agreement solely for the
purpose of settling and compromising the claims of the Class and to avoid the time, expense, and
distraction that continued litigation would involve;
WHEREAS, counsel for Plaintiffs has made an investigation into the facts and
circumstances relevant to the allegations made against Willner in this action and believes they
have achieved a valuable and fair offer of settlement and compromise for claims asserted by
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Plaintiffs and on behalf of the Class;
WHEREAS, counsel for Plaintiffs also has evaluated the expense and length of time
necessary to prosecute this case against Defendant through trial, taking into account the
uncertainties of predicting the duration or outcome of complex litigation as well as the
collectability of any judgment which may be obtained; and
WHEREAS, based upon consideration of all these factors and the terms of this
Settlement Agreement, counsel for Plaintiffs has concluded that it is desirable and in the best
interest of the Class to settle with Willner as set forth in this Settlement Agreement, which will
result in substantial immediate benefits to members of the Class;
NOW, THEREFORE, in consideration of the foregoing, the Settlement Fund (as
defined below) and other covenants and agreements set forth in this Settlement Agreement,
including, but not limited to, the payments, releases, and dismissal with prejudice of all claims in
the Litigation, and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the Parties agree as follows.
AGREEMENT
I. Recitals. Except for the incorporated definitions, the recitals are not part of this
Agreement and the Parties'pecific obligations are set forth below.
H. Definitions
In addition to terms defined elsewhere in this Settlement Agreement, the following
defined terms used in this Settlement Agreement have the meanings described below.
2.01 "Class" means all persons and entities, individually and collectively, who invested
money in or through Glenn Galemmo or his affiliated entities from January 1, 2002 to July 26,
2013 and suffered a net loss (i.e., the funds invested exceeded the total of all funds received in
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the form of puiported income or return of principal), as set forth in the Court's June 19, 2014
order certifying the Class.
2.02 "Class Counsel" means the law firms of Santen & Hughes and Dimond Kaplan &
Rothstein.
2.03 '*Class Member" means a member of the Class.
2.04 "Class Notice" means the notice of this Agreement mailed to Class Members in
substantially the form attached as Exhibit A, together with a copy of the Preliminary Approval
Order.
2.05 "Effective Date" means the date by which (i) the Settlement Agreement is finally
approved in all respects by the Court, and (ii) a Final Approval Order as described in section
2.07 below has been entered, and (iii) the time for appeal from such entry of the Final Approval
Order shall have expired without the filing of a timely notice of appeal or, if one or more appeals
are taken, the date by wluch such appeal(s) shall have been finally determined by the highest
court before which appellate review is sought and upon such final appeal, the Final Approval
Order is affirmed in all respects.
2.06 "Final Hearing" means the hearing at which the Court will consider any
objections to the Settlement Agreenient and hear evidence and legal argument in support of, or in
opposition to, entry of the Final Approval Order.
2.07 "Final Aonroval Order" means the judgment entered by the Court in accordance
with Ohio Civil Rule 23 approving this Settlement Agreement, to be substantially in the foun
attached as Exhibit B.
2.08 "Galemmo Affiliates" or if the context requires, "Affiliates," means those persons
and entities that received funds from Plaintiffs and members of the Class as putative investments,
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including, without limitation, Queen City Investment Fund, Queen City Investment Fund II, and
QFC LLC.
2.09 "Preliminarv Anuroval Motion" means a motion substantially in the form attached
hereto as Exhibit C jointly requesting that the Court preliminarily approve this Settlement
Agreement and enter the Preliminary Approval Order.
2.10 "Preliminarv Apuroval Order" means the order substantially in the form attached
hereto as Exhibit D entered by the Court preliminarily approving the terms and conditions of this
Settlement Agreement and the manner of providing notice to the Class.
2.11 "Preliminarv I-Iearins" means the date set by this Court in advance of the Final
Settlement Hearing to review this Settlement Agreement and all issues related thereto in order to
determine on a preliminary basis whether the proposed settlement meets criteria pursuant to Ohio
Civil Rule 23.
2.12 "Settled Claims" means all claims that are or could have been asserted by
Plaintiffs or members of the Class against Willner, his spouse and children, and any Subsequent
Transferee(s) (as defined and to the extent specified below) of Willner arising out of or in any
way relating to Galemmo or the Galemmo Affiliates, any investment with them, and/or any
distribution to or on behalf of Willner from them, including but not limited to, any and all
manner of actions and causes of action, suits, obligations, claims, debts, demands, agreements,
promises, covenants, contracts, liabilities, controversies, costs, expenses and attorneys'ees, of
any nature whatsoever, in law or in equity, whether known or unknown, foreseen or unforeseen,
matured or unmatured, accrued or not accrued, direct or indirect, which the Plaintiffs and the
Class Members, or any of them, ever had, now have or can, shall or may hereafter have, against
Willner, either alone or in combination with others, arising from or relating to Willner's
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involvement with, relationship to, or receipt of funds from Galemmo or any of the Galemmo
Affiliates. The term "Settled Claims" shall not include any person or entity other than Willner
except as expressly set forth in this section 2.12. Subsequent Transferee has the meaning
provided in the Uniform Fraudulent Transfer Act. The release of any Subsequent Transferee(s)
provided in this Section 2.12 extends only to claims arising from or related to any transfer from
Willner and does not release any other claims of the Class against any person or entity who may
otherwise be a Subsequent Transferee, including but not limited to, any such claims arising from
or related to any direct transfer or payment to such persons or entities from Galemmo or the
Galemmo affiliates; rirovided. however, that Willner's purchase of ORW stock (as defined in
section 4.02 below) using proceeds from Galemmo investments was and shall be considered a
distribution on behalf of Willner and is included in the scope of Settled Claims.
2.13 "Settlement Fund" means the monetary sum, and potential transfer of ORW
shares, identified in sections 4.01 and 4.02 below, including both the Initial Payment and the
Subsequent Payment components of the Settlement Fund, as further defined in section 4.01. The
Initial Payment is currently being held in the trust account of Willner's attorneys, Squire Patton
Boggs (US) LLP and is available to fund Willner's obligations hereunder upon the Effective
Date.
III. Comnromise of Disputed Claims.
This Settlement Agreement is a compromise of disputed claims. Neither this Settlement
Agreement, nor any action taken by Willner in furtherance of this Settlement Agreement, is
intended to be, or should be construed to be, an admission or concession by Willner of liability to
the Plaintiffs or the Class. The Parties do not intend for this Settlement Agreement or the terms
of the settlement provided by this Agreement to be admissible in any subsequent proceeding in
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this case, or in any other lawsuit, arbitration, administrative action, or any judicial or
administrative proceeding involving Galemmo or the Galemmo Affiliates if offered to show,
demonstrate, evidence, or support a contention of wrongdoing by Willner or any other Party.
IV. Settlement and Release.
4.01 The Settlement Fund is projected to be $ 1,425,699.00, which shall be payable in
two installments as follows:
(a) Upon the Effective Date, Willner shall pay the amount of $1,022,699.00 (the
"Initial Pavment"); and
(b) Within 45 days of the Effective Date, Willner shall pay the additional amount
of $403,000.00 (the "Subseouent Pavment").
Willner shall pay the amount of the Settlement Fund (both the Initial Payment and the
Subsequent Payment) to Class Counsel, who shall hold that amount for the benefit of the Class,
subject to the provisions of Article V below.
4.02 It is contemplated that the Subsequent Payment will be funded by Willner's sale
of all stock in On Ramp Wireless ("ORW") owned by him, as reflected in the Affidavit (asdefined below). Willner shall use reasonable, diligent, and good faith efforts to close a sale of
his ORW stock as soon and expeditiously as possible for an amount not less than $480,000.00
with the sale proceeds paid to Willner within 40 days of the Effective Date (a sale satisfying all
of the foregoing an "ORW Sale"). The occurrence of an ORW Sale shall be a conditionprecedent to Willner's obligation to pay the Subsequent Payment within 45 days of the Effective
Date. In the event that an ORW Sale does not occur (including the payment of the sale proceeds
to Willner) within 40 days of the Effective Date, then Willner shall continue to use reasonable,
diligent, and good faith efforts to cause an ORW Sale to occur as soon as reasonably possible
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and Willner shall pay the Subsequent Payment within 5 business days of Willner's receipt of the
purchase price of any such ORW Sale. In the event that Willner closes an ORW Sale for a
purchase price greater than $480,000, then Willner shall pay 75'ro of the amount exceeding
$480,000 to Class Counsel (the "Surulus Pavment") and the Surplus Payment shall be added to
and included in the definition of the Subsequent Payment in Section 4.01. By way of illustration,
if the sale proceeds from an ORW Sale were $500,000.00, then the Surplus Payment would be
$ 15,000.00 (75'/o of $20,000.00) and the amount of the total Subsequent Payment would be
increased to $418,000 00 (the baseline amount of $403,000.00 plus the additional $ 15,000.00
Surplus Payment). Willner has no obligation to refuse or delay an ORW Sale to attempt to
generate a Surplus Payment. The amount of the purchase price in the ORW Sale shall include all
purchase consideration received by Willner (or by any other person associated with him) as a
result of the ORW Sale, including any non-cash and/or deferred payments. Upon request,
Willner will provide Class Counsel with a copy of the purchase agreement used in the ORW
Sale, and any documents referenced therein or which relate to the terms and conditions of the
ORW Sale. In the event that the ORW Sale has not occurred by May 31, 2015, Willner shall pay
the sum of $43,000 to Class Counsel (the "Transfer Pavment"), and shall transfer complete
owneiship of all ORW shares to Class Counsel or its designee, for the benefit of the Class (the
"ORW Transfer" ). Completion of each of the Transfer Payment and ORW Transfer shall satisfyWillner*s obligation to make the Subsequent Payment. If Willner becomes obligated to make the
ORW Transfer on May 31, 2015, he will cooperate with Class Counsel and use reasonable and
good faith efforts to ensure that the ORW Transfer occurs promptly and without undue delay or
expense.
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4.03 Payment of the Settlement Fund shall be the only financial obligation of Willner.
He shall have no other liability or responsibility of any kind to the Plaintiffs, Class Members, or
Class Counsel for payment of funds to Class Members, attorneys'ees, court costs, settlement
administration costs, division or amounts of distributions between Class Members, or any other
thing or matter on account of or related to the settlement provided by this Settlement Agreement.
4.04 In order to induce Plaintiffs to enter into tins Settlement Agreement, Willner
provided an Affidavit regarding his financial condition and his personal fiiiancial statement, a
true and accurate copy of which (redacted for account information and other sensitive personal
information) is attached hereto as Exhibit E (the "Affidavit" ). To induce Plaintiffs to enter intothis Settlement Agreement, Willner makes the following representations and warranties, which
are true on the date when made and shall remain true on the date of the Final Approval Order.
(a). The Affidavit is true and accurate in all material respects;
(b). Neither Willner nor anyone acting on his behalf has made any transfer in
the last four years except as set forth in the Affidavit;
(c). Willner has no expectation of receiving funds from any source, includingthrough inheritance or otherwise, other than his regular employment compensation except as set
forth in the Affidavit; and
(d). None of the representations or warranties contained herein is misleading,
or omits facts which, if stated, would make them misleading.
4.05 Upon the Effective Date and payment of the amount of the Settlement Fund by
Willner (including both the Initial Payment and the Subsequent Payment), Plaintiffs and all Class
Members (except as set forth in section 6.06 of this Settlement Agreement) and their respective
heirs, executors, administrators, representatives, agents, successors, and assigns, shall be deemed
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to (and by operation of the judgment in the Final Approval Order shall) fully, finally, and forever
release and forever discharge the Settled Claims.
V. Administration and Distribution of the Settlement Funds
5.01 The Settlement Fund will be distributed, pursuant to order(s) of the Court and
subject to Court-approved deductions for attorneys'ees, expenses and administration costs, to
members of the Class. No distributions of the Settlement Fund will be made for any reason
without approval of the Court. Willner shall have no responsibility or obligation concerning
distribution or division of the Settlement Fund among Class Members or Class Counsel.
5.02 Class Counsel will request reimbursement of expenses, and costs for settlement
administration from the amounts deposited and interest accrued on the Settlement Fund, in an
amount to be determined by the Court. Additionally, Plaintiffs and Class Counsel will file a
motion with this Court for approval of payment of attorneys'ees in an amount to be determined
by the Court. Plaintiffs may also request that the Court award an appropriate amount as an
incentive payment to them as Class representatives to compensate them for their time and reward
'their dedication towards the resolution of this case. Willner shall have no responsibility for or in
connection with any fee request or fee award and Willner's sole obligation shall be to pay the
amount of the Settlement Fund upon the Effective Date.
5.03 After the Effective Date, any dispute relating to the processing of claims, the
administration of the settlement, the identity of Class Members, or their entitlement to relief will
be addressed first by counsel for the parties and, if there is no resolution, shall be submitted to
the Court for resolution.
VI. Procedure for Preliminarv and Final Anuroval
6.01 As soon as practical after the execution of this Settlement Agreement by all of the
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Parties, their counsel shall jointly file with the Preliminary Approval Motion requesting that the
Court enter the Preliminary Approval Order. The Parties and their counsel shall in good faith
support the prompt entry of the Preliminary Approval Order and undertake any and all
reasonable efforts that in good faith are appropriate or necessary to obtain the Court's preliminary
approval of this Agreement.
6.02 Upon entry of the Preliminary Approval Order, Class Counsel shall provide notice
of this Settlement Agreement in the form of the Class Notice attached hereto as Exhibit A, by
(A) mailing, by first-class United States mail, postage prepaid, a copy of the Notice, to members
of the Class at their last known address and by sending a copy of the Notice by email to the
extent such email addresses are known; and (B) by serving a copy of the Class Notice on allcounsel of record in the cases consolidated before this Court concerning the Galemmo Affiliates;
and (C) by providing a copy of the Class Notice to counsel of record in any cases against
Galemmo or Galemmo Affiliates, including the putative class action currently pending in the
United States District Court for the Southern District of Ohio.
6.03 If the Court enters the Preliminary Approval Order, that shall represent the
Court's finding that the foregoing constitutes the best notice practicable under the circumstances
and constitutes due and sufficient notice of the proposed Settlement Agreement and the Final
Hearing.
6.04 Any Class Member who wishes to object to this Settlement Agreement must
timely file a written objection ("Obiection") not later than 10 days prior to the date of the Final
Hearing. The Objection shall include a statement of the net loss sustained by the person(s)
objecting. Any Class Member who does not timely submit an Objection which complies with
the requirements set forth in the Class Notice, or otherwise as ordered by the Court, shall not be
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treated as not having filed a valid Objection to the settlement provided by this Agreement. Any
and all timely Objections shall be considered by the Court at the Final Hearing.
6.05 Any Class Member may attend the Final Hearing. No Class Member will be
permitted to raise any objections at the Final Hearing that the Class Member could have raised in
an Objection but did not.
6.06 Class Members may elect to "opt out" of this Settlement Agreement and thus
exclude themselves from this case, the Class, and the terms of this Settlement Agreement. The
Class Notice advises of this right. Class Members who wish to exercise this option must do so in
writing by mail postmarked on or before deadline set forth in the Class Notice. Otherwise, those
Class Members will be deemed to have forever waived their right to opt out of the Settlement
Class.
6.07 Plaintiffs expressly acknowledge that, in providing the benefits to the Class set
forth in this Settlement Agreement, Willner intends to achieve a full and complete settlement,
compromise, resolution, release and termination of all differences between the releasing parties
and the released parties with respect to the matters within the scope of the Settled Claims and the
dismissal of this action with prejudice. Accordingly, either the Plaintiffs or Willner shall have
the right to terminate this Settlement Agreement if Class Members holding claims aggregating
more than $250,000 of net losses opt out of the Settlement Agreement. If the Plaintiffs or
Willner elects to exercise this right, they must do so in writing, with copies to opposing counsel
and to the Court, no later than 5 calendar days before the date set by the Court for the Final
Heanng If either the Plaintiffs or Willner exercises this right, this Settlement Agreement shall
be null and void for all purposes.
6.08 At the Final Hearing, Plaintiffs, Class Counsel and counsel for Willner will
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request that the Court enter the Final Approval Order, substantially in the form attached hereto as
Exhibit B or as otherwise agreed to by the Parties. The Parties and their counsel shall in good
faith support the entry of the Final Approval Order and shall undertake any and all efforts that in
good faith are appropriate or necessary to obtain the Final Approval Order. Among other things,
the Final Approval Order will approve the terms of this Settlement Agreement as final, fair,
reasonable, and adequate and binding on the Parties and all Class Members. In addition, the
Final Approval Order will dismiss the action with prejudice but provide that Court retains
jurisdiction over all matters relating to the interpretation and enforcement of this Settlement
Agreement and the distribution of the Settlement Fund.
6.09 If (A) the Court declines to enter a Preliminary Approval Order or Final ApprovalOrder as described herein, (B) the Effective Date does not take place within 6 months of the dateof the filing of this Settlement Agreement (or 18 months if there is any appeal of a Final
Approval Order by this Court) or (C) if either the Plaintiffs or Willner elects to terminate theSettlement Agreement as provided in 6.07, then the Settlement shall be null and void, shall have
no further force and effect with respect to any Party in this case or any Class Member, and
neither the Settlement Agreement nor any of its terms shall be used in this case or any other case
for any purpose. All negotiations, proceedings, and statements made in connection herewith
shall be without prejudice to any person or party, shall not be deemed or construed to be an
admission by any party of any act, matter, or proposition and shall not be used in any manner for
any purpose in any subsequent proceeding in this case or in any other action or proceeding.
VII. Miscellaneous Provisions
7.01 All Parties to this Settlement agree to reasonably cooperate in seeking Court
approval of the Settlement Agreement and to usc their best efforts to effect consummation of the
13
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Settlement Agreement.
7.02 All of the exhibits to this Settlement are an integral part of this Settlement
Agreement and part of the contract of the Parties to this Settlement Agreement
7.03 This Settlement may be executed in one or more counterparts, all of which
together shall be one and the same instrument.
7.04 This Settlement Agreement and its terms shall be governed by the law of the State
of Ohio.
7.05 The Court shall retain jurisdiction with respect to enforcement of the terms of the
Settlement Agreement.
7.06 This Settlement Agreement, including all exhibits, constitutes the entire, final, and
fully-integrated agreement of the Parties with respect to the subject matter hereof. This
Settlement Agreement may not be modified or amended except in writing signed by each of
Plaintiffs and Willner and any other attempted manner of modification shall be void (and not
merely voidable).
7.07 This Settlement Agreement shall be deemed to have been drafted jointly by the
Parties, and any rule that a document shall be interpreted against the drafter shall not apply to
this Settlement Agreement.
7.08 This Agreement shall inure to the benefit of the respective heirs, successors, and
assigns of the Parties.
IN WITNESS WHEREOF, and intending to be legally bound hereby, the Parties hereto
have caused the Settlement Agreement to be executed as of the dates indicated below.
[SIGNATURE PAGES FOLLOW]
14
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DATED.Kans~ ~~ 2014ZYNTkIIA KHOO-ROBINSON
Plaintiff and Class Representative
DATED: 2014 By:CFIARLES LYTLE
Plarntif't and Class Representative
DATED: , 2014 ByJACK TEMQvfAN
Plaintiff and Class Representative
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DATED: 2014 By:CYNTFIIA KHOO-ROBINSON
DATED: 5 I ~, 2044Plaintiff and Class Representative
CI-IARLES LYT E
Plaintiff and Class Representative
DATED: , 2014 By:JACK TE~N
Plaintiff and Class Representative
15
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, 2014 By:CYNTHIA KHOO-ROBINSON
Plaintiff and Class Representative
DATED: 2014 By:CHARLES LYTLE
Plaintiff and Class Representative
DATED: ha e /2 20l4 sr~ 7~%~JACK TENKMAN
Plaintiff and Class Representative
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Plaintiff and Class Representative
cMICItAEL WILLNER
Defendant
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EXHIBIT A
HAMILTON COUNTY, OHIO COURT OF COMMON PLEASCynthia Khoo-ilobtnson, et al v. Michael IPillner Case No.. A1401348
NOTICE OF CLASS ACTION SETTLEMENT
Please be advised that in the lawsuit described above, Plaintiffs Cynthia Khoo-Robinson,Charles Lytle, and Jack Tenkman ("Plaintiffs" ) and Defendant Michael Willner ("Willner")have reached a settlement ("Settlement" ) that will resolve all claims by Plaintiffs and the Class(as described below) related to investments with Glen Galemmo and affiliated entities, includirgQueen City Investment Fund, Queen City Investment Fund II, and QFC LLC or other entities.The Settlement only concerns claims against Willner and not claims or settlements with otherdefendants in other lawsuits.
PLEASE READ THIS NOTICE CAREFULLY BECAUSE THE SETTLEMKNTMAY AFiFKCT YOUR LEGAL RIGHTS
A Court authorized this Notice. It is not a solicitationpotn a lawyer.
Who is in the Class? The Class consists of all persons and entities, individually andcollectively, who invested money in or through Galemmo or his affiliated entities from JanuaryI, 2002 to July 26, 2013 and suffered a net loss (i.e., the funds invested exceeded the total of allfunds received in the form of purported income or return of principal). You are receiving thisnotice because you may be a member of the Class.
Who is Mr. Willner? Willner was an investor with Galemmo who, over the years of hisinvestment, received more in distributions than the amount of his investment. Claims arepending against other defendants in other lawsuits. The Settlement does not affect those claims.It only concerns the claims against Mr. Willner.
What is the Settlement? The terms of the Settlement are described in more detail below. Theterms include that Mr. Willner will pay a projected amount of $1,425,699 and that all claimsrelated to Galemmo investments by Plaintiffs or the Class against Mr. Willner will be settled andreleased. The settlement amount may be lower or higher as set forth in greater detail below, butnot less than $1,068,699 plus Willner's shares in On-Ramp Wireless, Inc., a Delawarecorporation.
Deadlines: If you wish to be included in the Settlement, you do not need to do anything. If youwish to object or exclude yourself from the Settlement, then the following deadlines apply
e Request Exclusion , 2014~ Object to the Settlement , 2014e Final fairness hearing seeking approval of the Settlement , 2014
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YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
PARTICIPATE IN THKSKTTLKMKNT
EXCLUDE YOURSELF
OBJECT TO THKSETTLEMENT
A.TTKND THEFINAL'AIRNESSHE'A'RINGi
',.'.'O
NOTHING
h
If you wish to be included in the Settlement, you do not needto take any action. If you are a member of the Class, you willbe automatically included in the Settlement unless youexclude yourself.You can exclude yourself from the Settlement by submittingthe Opt-Out Notice attached below. If you exclude yourselffiom the Settlement, you will not be entitled to receive anyfinancial distribution fiom the payment by Mr. Willner andwill not be bound by the release of claims against Mr.Willner. The deadline for excluding yourself is2014.If you object to the Settlement, you or your attorney can file awritten objection. If you wish to exclude yourself from theSettlement, you must submit the attached Opt-Out Notice;filing a written objection will not exclude you from theSettlement. The deadline for filing any objection is2014.The Court has scheduled a final fairness hearing on2014 to consider final approval of the Settlement and to hearany objections. You may attend the final fairness hearing. Ifyou wish to speak in opposition to the Settlement, you mustfirst file a written obIection.If you do nothing and are a member of the Class, you will beincluded in the Settlement.
The Court in charge of this case still has to decide whether to approve the Settlement, .includingafter consideration of any objections. Do not contact the Court with questions. If you havequestions about the Settlement or this Notice, you should contact Charles E. Reynolds, by mail atSanten k Hughes, 600 Vine Street, Suite 2700, Cincinnati, OH 45202, or by phone at 513-721-4450, or by email at [email protected]. Some frequently asked questions are addressedbelow.
1. What is this lawsuit about?
You are receiving this Notice because records available to Class Counsel indicate you investedfunds with Glen Galemmo or entities affiliated with him and suffered a net loss (i.e. you investedmore than was distributed to you). Mr. Galemmo perpetrated a fraudulent scheme to defraudinvestors, including using money from new investors to make distributions to earlier investors.Mr. Willner was an investor who received more in distributions than the total amount he invested
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(i.e., he is a so-called "net winner"). Plaintiffs filed this lawsuit against Mr. Willner on behalf ofthe Class to recover amounts paid to Mr. Willner above what he invested. Plaintiffs claim in thelawsuit that distributions made to Mr. Willner are recoverable as fraudulent transfers because ofthe nature of the fraudulent scheme perpetrated by Glen Galemmo and his affiliates. Mr. Willnercontends in the lawsuit that he is not liable for repayment of those distributions and that he is aninnocent investor who had no knowledge of Galemmo's fraudulent scheme. Plaintiffs (on behalfof the Class) and Mr. Willner now desire to settle the claims and defense asserted in the lawsuit.
2. Why is this a class action?
There are many former Galemmo investors. This class action against Mr. Willner is an attemptto resolve similar claims fairly and efficiently and to avoid possible inconsistent outcomes if theclaims were brought in separate lawsuits. In a class action, the Class representatives (in this caseCynthia Khoo-Robinson, Charles Lytle, and Jack Tenkinan) sue on behalf of all members of theClass. One court resolves the issues for all members of the Class, except for those who excludethemselves from the Class. The Settlement payment is for the benefit of the entire Class (exceptthose who exclude themselves) rather than individual Plaintiffs and the Settlement proceeds aredistributed only in accordance with the further orders of the Court. In this case, Judge Carl StichJr. of the Hamilton County Court of Common Pleas is presiding over this class action case andthe proposed Settlement.
3. Why is there a settlement?
The Court did not decide in favor of Plaintiffs or Willner. The Plaintiffs contend they wouldprevail if the claims in the case proceeded to trial. Mr. Willner contends Plaintiffs would notprevail. Both Plaintiffs and Mr. Willner desire to avoid the expense and time of a trial. ThePlaintiffs, as representatives of the entire Class, and Class Counsel (the attorneys representingmembers of the Class) believe the Settlement is fair to all members of the Class.
4. How do I know if I am part of the settlement?
The Court decided that everyone who fits this description is a member of the Class:
e All persons and entities, individually and collectively, who invested money in or throughGalemmo or his affiliated entities from January I, 2002 to July 26, 2013 and suffered anet loss (i.e., the funds invested exceeded the total of all funds received in the form ofpurported income or return of principal).
You are receiving this Notice because you have been identified by records available to ClassCounsel as someone falling within this description.
6. What does the Settlement provide'
Mr. Willner will make a Settlement payment projected to be $1,425,699, but which may be alower amount as described in the settlement Agreement (but not less than $1,068,699 plusWillner's shares in On-Ramp Wireless, Inc., a Delaware corporation). That amount will be held
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by Class Counsel subject to supervision of the Court and will be distributed only in accordancewith further orders of the Court. There are other cases pending against Glen Galemmo and otherDefendants. Plaintiffs and Class Counsel expect that the Settlement in this case will becoordinated with those in other cases so that all recoveries on behalf of Galemmo investors aredistributed fairly and consistently. If the Settlement is approved, Mr. Wi liner is released from allclaims once he makes the payment described above. If you do not exclude yourself from theSettlement, you will not be able to sue Mr. Willner in an individual lawsuit. Plaintiffs, on behalfof all members of the Class, and Class Counsel (the attorneys representing the Class) believe theSettlement is fair. The Settlement includes other teims, which are set forth in detail in theSettlement Agreement. You may obtain a copy of the Settlement Agreement by contacting ClassCounsel at:
Charles E. Reynolds, Esq.SANTEN 6'c HUGHES600 Vine Street, Suite 2700Cincinnati, Ohio 45202cerialsanten-huahes.corn
7. Is this the only settlement payment I will receive?
No. This case only concerns claims against Mr. Willner. There are other cases filed againstother defendants seeking recovery on behalf of Galemmo investors, including a forfeiture actionfiled by the United States government in which distributions to injured investors are expected.While neither Plaintiffs nor Class Counsel can make promises regarding future recoveries,additional settlements are anticipated. Participating in this Settlement does not affect your rightto participate in recoveries or settlements in other cases against other defendants. This case onlysettles the claims against Mr. Willner.
8. When will I receive a payment?
The Court will hold a hearing on to decide whether to approve the Settlement.If the Court approves the Settlement, then it becomes effective after any appeals (if any are filed)are resolved. Once the Settlement becomes effective, then Mr. Willner will make the paymentdescribed above and it will be distributed in accordance with further orders of the Court.Plaintiffs and Class Counsel expect that payments will be coordinated with recoveries in othercases and with forfeiture proceeds collected by the United States government. It could bemonths before any distribution occurs. Approval of the Settlement is the first step in anydistribution and the exact timing of any distribution cannot be predicted with certainty.
9. What if the Settlement is not approved?
lf the Court does not finally approve the Settlement at the hearing on then theSettlement will not become effective. Additionally, if investors holding more than $250,000 innet losses exclude themselves from the Settlement, then Mr. Willner has the right to terminatethe Settlement. If either of those things happens, then the Settlement becomes null and void as ifit never happened. Mr. Willner will not be obligated to make the financial payment required by
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the Settlement and the claims against him could proceed in the litigation.
10. What am I giving up to get a distribution from the Settlement?
Unless you exclude yourself, you are staying in the Class in exchange for the right to share in thefinancial distribution from the Settlement. If you do so, you will give up your right to sueWillner and you will be bound by the Settlement.
11. Do I have a lawyer in this case?
The Court appointed the law firm of Santen & Hughes to represent all the members of the Class.These lawyers are called Class Counsel. You will not be charged for these lawyers. Asexplained below, the Judge will grant them a fee award from the proceeds of the Settlement. Ifyou want to be represented by your own lawyer, you may hire one at your own expense but youdo not need to do that to participate in the Settlement. If you exclude yourself from theSettlement, then Santen & Hughes will not be representing you because they represent only themembers of the Class.
12. Do I have to pay Class Counsel?
You do not have to make an out-of-pocket payment to Class Counsel. Those lawyers will bepaid from a share of the proceeds of the Settlement. If the Settlement is approved, Class Counselwill file a later request with the Court to approve payment of attorneys'ees and expenses. Thefees would pay Class Counsel for investigating the facts, filing the Complaint, litigating the case,and negotiating the Settlement. Whatever amount of fees the Court approves would be deductedfrom the amount of the Settlement proceeds to be distributed to the Class.
13. Can I exclude myself from the Class?
Yes. If you do not wish to participate in the Settlement, you may exclude yourself from theClass by completing and signing the "Opt-Out Notification Foun" attached below. If you wish todo so, you must mail the Opt-Out Notification Form so that it is postmarked no later than
, 2014 to:
Charles E. Reynolds, Esq.SANTEN & HUGHES600 Vine Street, Suite 2700Cincinnati, Ohio 45202
If you do not mail the Opt-Out Notification Form, or if you mail it late, you will be included inthe Settlement. If you do timely mail the Opt-Out Notification Form, then you will be excludedfrom the Settlement and will not be entitled to share in the proceeds of the Settlement. Youwould retain the right to sue Willner. If members of the Class holding claims totaling more than$250,000 of net losses exclude themselves from the Class, then either the Class or Willner mayterminate the Settlement.
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14. If I do not exclude myself, can I sue Willner later?
No. If you do not exclude yourself and participate in the Settlement, then you are giving up yourright to sue Willner as provided in the terms of the Settlement.
15. If I exclude myself, can I receive a paynient from this Settlement?
No. If you exclude yourself from the Class, you cannot receive any distribution from theSettlement.
16. Can I object to the Settlement?Yes. You can object by mailing a written objection so that it is postmarked no later than
, 2014 to:
Charles E.Reynolds, Esq.SANTEN 6h HUGHES600 Vine Street, Suite 2700Cincinnati, Ohio 45202
Be sure to include your name, address, telephone number, your signature, and the reasons youobject to the settlement. If you do not object in writing to the Settlement, or mail your objectionlate, then you will not be permitted to oppose the Settlement at the final hearing on2014.
17. What is the difference between objecting and excluding myself from the Settlement?
Objecting notifies the Court that you oppose something about the proposed Settlement. You canobject only if you stay in the Class. Excluding yourself notifies the Court that you do not wish tobe a part of the Class and do not wish to participate in or be bound by the Settlement. If youexclude yourself from the Class, you are not permitted to object to the Settlement because theSettlement no longer affects you.
18. Do I neeii to mail anything if I support the Setticment?
If you support the Settlement, you do not need to mail anything. You will be included in theSettlement unless you exclude yourself.
19. When and where will the Court decide whether to approve the Settlement'
The Court will hold a final fairness hearing to decide whether to approve the Settlement. Thehearing will be held on, 2014 in Room 495 at the Hamilton County Courthouse,1000 Main Street, Cincinnati, Ohio 45202. At this hearing, the Court will consider whether thesettlement is fair, reasonable and adequate. If there are objections to be heard, the Court mayconsider them at the hearing.
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20. Do I have to come to the Hearing?
You are not required to attend the final fairness hearing. Class Counsel and counsel for Willnerwill answer questions the Court may have. But, you are welcome to attend at your own expense.If you mail an objection, you are not required to come to Court to talk about it. As long as youmailed your written objection on time, the Court will consider it.
21. May I speak at the hearing?
You may ask the Court for permission to speak at the final fairness hearing. The number ofpersons who may speak and the length of time they may speak will be determined by the Court atthe hearing. If you have not mailed an objection to the Settlement by March 2, 2015, then youwill not be permitted to speak to raise objections to the Settlement. The purpose of thisrequirement is to permit Class Counsel and counsel for Willner to be prepared to address anyconcerns about the Settlement.
22. What happens if I do nothing at all?If you do nothing, you will remain a member of the Class, will be included in and bound by theSettlement, and will be entitled to receive a financial distribution if the Settlement is approved.
23. How do I get more information?
This Notice is only a summary of the circumstances surrounding the litigation, the Class, theSettlement, and related matters. You may seek the advice and guidance of your own privateattorney, at your own expense, if you desire. For more detailed information, you may review thepleadings, records, and other papers on file in this litigation, which may be inspected duringregular business hours at the Clerk of Court, Hamilton County Courthouse, 1000 Main Street,Cincinnati, Ohio 45202. If you wish to communicate with Class Counsel identified above, youmay do so by writing to:
Charles E. Reynolds, Esq.SANTEN & HUGHES600 Vine Street, Suite 2700Cincinnati, Ohio 45202per&a,santen-huuhes.corn
DO NOT CONTACT THE COURT. The Court cannot provide you with additional informationregarding the Settlement due to ethical restrictions on contact with parties to a lawsuit.
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OPT-OUT FORM
Cynthia Khoo-Robinson, et al. v. Michael Willner Case No.: A1401348Hamilton County, Ohio Court of Common Pleas
'Th'is is,N/OCT/adciajiiiifor'mi'Atilt:,"KXCL'UDES,you:fr'omsthisiclassiaetion'/',i&",:-:,'i'.:=',;;:,'-"::':;::;",';.''DOI:;NONT!use,'tht'sTI/ro/r/m',,'ifAyou",.w'ish&4;:&li-::&~"',,=:A",'/''//oA3 lr';-". -'3:,":,'' 'i ',"3":3~p'ar'tici'pafefin'/t~tte'ipio''os'eAdtsettleni/en'ti;,'t/'ll's'ri:.5&'i:;-0 './; -': -': ':",!"',.-";=:-".';=:
Name of Class Member:
Address:Street City State Postal Code
Telephone:Area Code/Phone No. (Ext. if applicable)
Amount of my Net Losses from Galemmo-related investments: $
I understand that by opting out, I will not be eligible to receive any money that may result f/om theSeulement, ifthe proposed Settlement is approved.
If you wish to opt out of this Class Action, please check the box below
t3 By checking this box, I affirm that I wish to be excluded from this Class in this lawsuit and that I donot wish to participate in the proposed Settlement.
Date Signed Signature of Class Member or Executor, Administrator orPersonal Representative
To be effective as an election to opt-out of this Class Action, this Form must be completed, signed andsent by regular mail, postmarked no later , 2014, to the address listed below.
The consequences of returning this Form are explained in the Notice of Class Action Settlement in thiscase.
If you choose to opt out, you must mail this Opt-Out Form to Class Counsel at the followingaddress, in an envelope postmarked NO LATER THAN , 2014:
, 'Charles E::/Reynblds; Esq.'::.':,'0:3SANTENo;"&-,:HUGIIEIS ,.';:,.';;
'/cveAr'R'saiiteiT-'hiiv/h'es':corm
105333/3/C/NC/NNATI
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EXHIBIT B
IN THE COURT OF COMMON PLEASHAMILTON COUNTY, OHIO
CYNTHIA KHOO-ROBINSON, et al.,
Plaintiffs,
CASE NO. A1401348
JUDGE CARL STICH JR.
vs.
MICHAEL WILLNER,
Defendant.
FINAL ORDER APPROVING CLASS ACTION SETTLEMENT
This matter is before the Court on the joint motion of Plaintiffs Cynthia Khoo-Robinson,
Charles Lytle, and Jack Tenkman, individually and as representatives of the Class ("Plaintiffs" or"Class Representatives" ) and Defendant Michael Willner ("Defendant" ) (Plaintiffs andDefendant sometimes individually a "~Part " and collectively the "Parties" ) for final approval of
the Class Action Settlement Agreement dated November ~ 2014 (the "Settlement
Aareement"). Unless otherwise specified herein, all capitalized terms used in this Final Order
Approving Class Action Settlement ("Final Approval Order" ) shall have the saine meaning setforth in the Settlement Agreement. Based on the joint motion of the Parties, the terms of the
Settlement Agreement, the filings in this case and related consolidated cases, the arguments of
counsel, and the order dated granting preliminary approval of the Settlement
Agreement and directing notice to the Class (the "Preliminarv Approval Order" ), the Court
hereby FINDS and ORDERS as follows;
1. Class Members. Pursuant to Civ. R. 23(A) and 23(B)(3), the Court preliminanly
certified a class consisting of:
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All persons and entities, individually and collectively, who invested money in orthrough Glen Galemmo or his affiliated entities from January 1, 2002 to July 26,2013 and suffered a net loss (i.e., the funds invested exceeded the total of allfunds received in the form of purported income or return of prmcipal).
(the "Class"). The Class did and does satisfy all of the requires of Civ. R. 23(A) because (1) theClass is so numerous that joinder of all members is impracticable; (2) there are questions of law
or fact common to the Class; (3) the claims or defenses of the Class Representatives are typicalof the claims or defenses of the Class; and (4) the Class Representatives will (and did) fairly and
adequately protect the interests of the Class. The Class did and does satisfy Civ. R. 23(B)because questions of law and fact common to the Class predominate over questions affecting
only individual members and a class action is superior to other available methods for the fair and
efficient resolution of this action. Accordingly, the Class is hereby finally certified and
confirmed.
2. Class Representatives and Class Counsel. Pursuant to Civ. R. 23, the Court
appointed Plaintiffs, Cynthia Khoo-Robinson, Charles Lytle, and Jack Tenkman, as the Class
Representatives and Charles E. Reynolds and Brian P. O'onnor of Santen de Hughes, LPA and
Jared A. Levy of Dimond, Kaplan k, Rothstein P.A. as Class Counsel, as set forth in the Court's
June 19, 2014 order certifying the Class. The Class Representatives and Class Counsel have
fully, diligently, and adequately represented the Class in this settlement and their appointment is
hereby finally approved and confirmed.
3. Class Notice. The Preliminary Approval Order directed that Class Counsel
provide written notice of the Settlement Agreement, in the form attached to the Settlement
Agreement as Exhibit A (the "Class Notice" ) to all members of the Class. The Court having
determined that the Class Notice was provided to the Class and that it fully, reasonably, and fairly
apprised the members of the Class of the pendency of this case, the terms of the proposed
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Settlement Agreement, and the rights of members of the Class concerning the proposed
Settlement Agreement hereby finally approves the Class Notice. The form and method for
notifying the Class of the settlement and its terms and conditions was in conformity with the
Settlement Agreement and the Preliminary Approval Order. The Class Notice satisfied the
requirements of Civ. R. 23 and due process and constituted the best notice practicable under the
circinnstances.
4. Jurisdiction. As adequate notice has been disseminated and all Class Members
have been provided an opportunity to opt-out of the Settlement Agreement, the Court has
personal jurisdiction with respect to the claims of all members of the Class against Defendant and
has subject matter jurisdiction over this case.
5. Final Fairness Hearing. The Court set December , 2014 as the deadline
for objections to the Settlement Agreement and held a final fairness hearing on December ~
2014 (the "Fairness Hearing") to determine whether the proposed Settlement Agreement was fair,
reasonable, and adequate, and should be finally approved. Notice of the Fairness Hearing was
provided as part of the Class Notice.
6. Obiections and Exclusions. Members of the Class were given an opportunity to
opt-out of this settlement or object to the Settlement Agreement. These rights were detailed in
the Class Notice, which fully, fairly, and reasonably explained the rights and the associated
deadlines. No member of the Class requested exclusion from the settlement or objected to the
Settlement Agreement.
7 Final Settlement Annrovah The terms and provisions of the Settlement
Agreement have been entered into in good faith and are hereby fully and finally adopted and
approved as fair, reasonable, and adequate as to, and in the best interests of, each of the Parties
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and the Class, and in full compliance with all apphcable requirements of the Ohio Rules of Civil
Procedure, due process requirements, and any other applicable law. The Parties and their counsel
are hereby directed to implement and consummate the Settlement Agreement according to its
terms and provisions, which are hereby incorporated into this Final Approval Order.
8. No Admissions. Neither this Final Approval Order nor the Settlement Agreement
is, or should be construed as, an admission or concession by Defendant of any liability or
wrongdoing in this or any other proceeding.
9. Bindine Effect. The terms of this Final Approval Order and the Settlement
Agreement are binding on the Parties and all members of the Class, as well as their successors,
heirs, and assigns.
10. Release and Dismissal of Claims. The Class Representatives, Class Members, and
their successors, heirs, and assigns, are hereby permanently barred and enjoined from instituting
or prosecuting, individually or as a class, any of the Settled Claims against Defendant or any
Subsequent Transferee (as defined and to the extent specified in Section 2.12 of the Settlement
Agreement) and the Settled Claims are hereby fully, finally, and forever released, discharged, and
dismissed with prejudice. Defendant is hereby dismissed with prejudice as a defendant in this
action.
11. Fees, Expenses, and Awards. Notwithstanding paragraph 10, Class
Representatives and Class Counsel may apply to the Court for attorneys'ees, costs, and
expenses and Class Representative awards, any and all of which shall be funded by the
Settlement Fund (as provided in the Settlement Agreement) and not tluough any further payment
or obligation of Defendant. The filing deadlines for applications and motions regarding
attorney's fees, costs, expenses, and Class Representative awards are as follows: Plaintiffs'
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motion and supporting documentation is due ; memorandum contra due ; and
reply memorandum due
12. ~Dis osition of Settlement Fund. Other than any payment or awards authorized
pursuant to paragraph 11, Class Counsel shall not distribute any portion of the Settlement Fund
except in accordance with further orders of this Court. Class Counsel shall continue to
communicate and coordinate with parties and counsel in other Galemmo-related litigation in
order to propose a distribution of the Settlement Fund that treats Class Members fairly and
consistently.
13. Retention of Jurisdiction. Without in any way affecting the finality of this Final
Approval Order, this Court expressly retains exclusive and continuing jurisdiction as to all
matters relating to the administration, consummation, enforcement, and interpretation of the
Settlement Agreement and this Final Approval Order.
SO ORDERED.
Judge Carl Stich, Jr.
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EXHIBIT C
IN THE COURT OF COMMON PLEASHAMILTON COUNTY, OI-IIO
CYNTHIA KHOO-ROBINSON,CHARLES LYTLE, and JACKTENKMAN, individually and on behalfof all others similarly situated,
Plaintiffs,
vs.
MICHAEL WILLNER,
Defendant.
CASE NO. A1401348
JUDGE CARL STICH JR.
JOINT MOTION FOR ORDERPRELIMINARILY APPROVINGCLASS ACTION SETTLEMENT,APPROVING NOTICE TO THECERTIFIED CLASS, ANDSCHEDULING FINAL APPROVALHEARING
Plaintiffs Cynthia Khoo-Robinson, Charles Lytle, and Jack Tenkman ("Plaintiffs" ) andDefendant Michael Willner ("Willner"), by and through their undersigned counsel, jointly move
the Court for entry of an order preliminarily approving the Class Action Settlement Agreement
("Settlement Asreement") between Plaintiffs and Willner, a copy of which is attached at ExhibitA. An agreed proposed form of an order preliminarily approving the Settlement Agreement is
attached as Exhibit B (it is also an Exhibit to the Settlement Agreement). The Settlement
Agreement is fair, reasonable, and the product of arms'ength negotiation between the parties
and their counsel. If finally approved, it is projected to result in over $ 1,400,000 of financial
recovery to th- Class. For these and the other reasons discussed below, Plaintiffs and Willner
respectfully request that the Court prelinunarily approve the Settlement Agreement.
I. Introduction
This case was brought by named plaintiffs Cyntlua Khoo-Robinson, Charles Lytle, and
Jack Tenkman, individually and as representatives of a putative class, against Defendant Michael
Willner for fraudulent transfer under R.C.1336.04(A)(1)and (2), and unjust enrichment based on
Defendant's receipt of distributions from Glenn Galemmo and affiliated entities ("Galemmo") in
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excess of what Defendant invested with Galemmo. Prior to July 17, 2013, Galemmo purported to
be an investment advisor providing investment services to persons and entities. On or about July
17, 2013, Galemmo notified his investors that his businesses had ceased operation. Subsequent
investigations revealed that Galemmo had perpetrated a scheme to defraud his investors.
Plaintiffs and the Class consist of individuals who invested more money with Galemmo than was
distributed to them. Defendant Michael Willner was an investor with Galemmo. Over a number
of years, Willner received distributions fmm Galemmo in excess of the amount he invested with
him or them.
Plaintiffs contend that they are the rightful owners of any amounts Michael Willner
received in excess of what he invested with Galemmo. Plaintiffs claim that any such excess
received by Willner constituted fraudulent transfers under R.C. 1336.04(A)(l) and (2) and unjustenrichment. Michael Willner asserts a number of defenses, including that: the claims are barred
because Willner was a good faith transferee for value; the claims are barred by and limited to the
extent of the value provided by Willner; the claims are barred by the statute of limitations; the
claims are preempted; and that the unjust enrichment claim is barred by a lack of privity between
Willner and Plaintiffs.
Counsel for Plaintiffs and counsel for Willner have diligently and aggressively
represented their respective clients in this matter. Plaintiffs have sought and received thousands
of pages of information relating to Willner's dealings with Galemmo. In addition to the
substance of the claims and defenses, the parties have conferred extensively regarding Willner's
financial condition. Willner has responded to requests for financial information and submitted to
an interview by counsel for Plaintiffs. After investigation of the matters relating to the dispute,
the parties entered into settlement discussions, which culminated in a Settlement Agreement. The
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parties submit that the Settlement Agreement is fair, reasonable, and in the best interests of the
class.
As set forth in more detail in the Settlement Agreement, in exchange for a release of all
claims related to investments with and distributions from Galemmo, Willner agrees to pay the
projected amount of $ 1,425,699.00 (the "Settlement Fund" ) to be distributed pursuant to the
further orders of the Court regarding attorneys'ees and division among the members of the
Class. As detailed in the Settlement Agreement, the Settlement Fund consists of: 1) an Initial
Payment of $1,022,699.00 that is being held in a trust account and can be paid immediately upon
the Effective Date of the Settlement Agreement; and 2) a Subsequent Payment in the projected
amount of $403,000.00 that will be paid within 45 days of the Effective Date upon Willner's sale
of certain shares in On-Ramp Wireless, which he purchased with distributions to him Irom his
Galemmo-related account.
Class Counsel has investigated Willner's financial condition, including his federal and
state tax filings. In consideration of the release provided to Willner in the Settlement Agreement,
Class Counsel has obtained an affidavit of financial condition from Willner ("Affidavit" ), a copyof which (redacted for sensitive personal information) is attached to the Settlement Agreement.
Willner has made representations and warranties in the Settlement Agreement regarding the truth
and accuracy of the Affidavit and his financial condition. The alternative to the Settlement
Agreement is substantial expense and delay arising from further legal proceedings, including the
possibility of a bankruptcy filing by Willner in California, all of which would result in a
diminution of the funds available to pay claims asserted by Plaintiffs and the Class
Conversely, a substantial portion of the funds for Willner's obligation under the
Settlement Agreement are being held in trust by counsel and can be available to the Class as soon
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as the Settlement Agreement is approved and becomes effective. Based on these factors, and as
set forth below, Plaintiffs and Willner respectfully request that the Court preliminarily approve
the Settlement Agreement, authorize notice to the Class, and schedule a hearing on the issue of
final approval of the Settlement Agreement as fair, adequate, and reasonable.
Il. Law & Araument
A. The Court should preliminarily approve the Settlement Agreement.
Approval of a class action settlen:ent is entrusted to the d!scretion of the trial court. E.g,
In re Kroger Co. Shareholders Litig., 70 Ohio App. 3d 52, 68, 590 N.E.2d 391, 401-02 (Ohio I"
Dist. App. 1990). In reaching ultimate settlement of a class action, "[t]he settlement shall first be
preliminarily approved by the court." Thonen v. McNeil-Akron, Inc., 661 F. Supp. 1271, 1276
(N.D. Ohio 1987).'he purpose of such a determination is to "determine whether the proposedsettlement is 'within the range of possible approvaL'" Armstrong v. Board ofSchool Directors of
the City of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980). As one court observed, "this
determination is similar to a determination that there is 'probable cause'o think the settlement is
fair and reasonable." Alaniz v. California Processors, Inc., 73 F.R.D.269, 273 (N.D. CaL 1976).
A final hearing should be scheduled and notice to the class should be given once the settlement is
found to be "within the range of possible approval." Id.
In this case, the Settlement Agreement provides a substantial benefit more than $ 1.4
million in projected financial recovery to the Class. There will be no distribution until further
order of the Court to ensure that the recovery is distributed fairly and appropriately. The
Settlement Agreement was negotiated at arm's length by counsel for Plaintiffs and counsel for
Willner. It accounts for Willner's financial condition and the possibility of further legal
i Ohio Civ. R 23 is substantially similar to Fed. R. Civ P 23 and Ohio courts frequently look to federalcaselaw in construing the state rule.
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proceedings (including potential a bankmptcy filing) that could frustrate or delay any recovery to
the Class. The Class will receive notice of the proposed Settlement Agreement and an
opportunity to be heard prior to final approval. For all of these reasons, the Court should enter an
order preliminarily approve the Class.
B. The Court should approve the proposed Notice to the Class.
The Settlement Agreement calls for written notice to members of the Class. A copy of the
proposed Class Notice is attached as Exhibit A to the Settlement Agreement. The proposed Class
Notice advises Class Members of their available rights, including the ability to object or opt-out
of the Settlement Agreement. The Settlement Agreement provides the Class Notice by mail (as
well as email, where addresses are known) and directs the filing of a copy of the Notice in other
Galemmo-related cases. This proposed manner of notice is reasonable, diligent, and provides
Class Members with the best notice practicable under the circumstances. E.g., II'est v. Carfax,
Inc., 2009-Ohio-6857, P19 (Ohio 11'" App. Dist. 2009) (noting desirability of notice by mail
where possible); Eisen v. Carlisle &f. Jacquelin, 417 U.S. 156, 175 (1974) (providing for
individualized notice to class members who are "identifiable through reasonable effort"). The
proposed Class Notice in this case satisfies all requirement of Ohio Civil Rule 23, surpasses due
process requirements, and provides class members with reasonable and practical notice under the
circumstances of this case.
III. Conclusion
For all of the foregoing reasons, Plaintiffs and Willner jointly request that the Court enter
an order in the form proposed as Exhibit B preliminarily approving the Settlement Agreement,
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approving and directing written notice to the Class, and scheduling a hearing on final approval.
Respectfully submitted,
Scott A. Kane, Esq. (0068839)Joseph P. Ashbrook (0091279)SQUIRE PATTON BOGGS (US) LLP221 East Fourth Street, Suite 2900Cincinnati, Ohio 45202(513) 361-1200(513) 361-1201 - faxscott.kane{Rsauirenb.corniosenh.ashbrook(ksuuirenb.corn
Charles E. Reynolds (0019935)Brian P. O'onnor (0086646)SANTEN tk HUGHES600 Vine Street, Suite 2700Cincinnati, Ohio 45202(513) 721-4450(513) 721-0109 - faxcer(Rsanten-huahes. cornboo&santen-huahes.corn
Counsel for g'illner Counsel for Plaintiffs
PROOF OF SERVICE
The undersigned certifies that a true and accurate copy of the foregoing was served via
U.S. mail and electronic mail on the following, this day of November, 2014:
Scott A. Kane, Esq. (0068839)SQUIRE PATTON BOGGS (US) LLP221 East Fourth Street, Suite 2900Cincinnati, Ohio 45202(513) 361-1240(513) 361-1201 Faxscott.kane(ltIsquirepb.corn
Counsel for g'illner
James R. Cummins, Esq.Phyllis E. Brown, Esq.CUMMINS it. BRowN, LLC312 Walnut Street, Suite 1000Cincinnati, OH 45202
Richard S. Wayne, Esq.Brett M. Renzenbrink, Esq.STRAUSS TROY CO., LPAThe Federal Reserve Building150 East Fourth StreetCincinnati, OH 45202
Counsel for Interested Parties
Brian P. O'onnor
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EXHIBIT D
IN THE COURT OF COMMON PLEASHAMILTON COUNTY, OHIO
CYNTHIA KHOO-ROBINSON, et al.,
Plaintiffs,
CASE NO. A1401348
JUDGE CARL STICH JR.
vs.
MICHAEL WILLNER,
Defendant.
ORDER PRELIMINARILY APPROVING CLASS ACTION SETTLEMENTAGREEMENT AND DIRECTING NOTICE TO CLASS
This matter is before the Court on the joint motion of Plaintiffs Cynthia Khoo-Robinson,
Charles Lytle, and Jack Tenkman, individually and as representatives of the Class ("Plaintiffs" or"Class Renresentatives") and Defendant Michael Willner ("Defendant" ) (Plaintiffs andDefendant sometimes individually a "~Part " and collectively the "Parties" ) for preliminary
approval of the Class Action Settlement Agreement dated November 2014 (the "Settlement
Aareement"). Unless otherwise specified herein, all capitalized terms used in this Preliminary
Order Approving Class Action Settlement ("Preliminarv Anuroval Order" ) shall have the same
meaning set forth in the Settlement Agreement. Based on the joint motion of the Parties, the
terms of the Settlement Agreement, the filings in tlus case and related consolidated cases, the
argmnents of counsel, and being fully advised, the Court hereby FINDS and ORDERS as
follows:
1. Class Members. Pursuant to Civ. R. 23(A) and (B)(3), this case was certified as a
class action on June 19, 2014 on behalf of the following Class of plaintiffs:
All persons and entities, individually and collectively, who invested money in orthrough Glen Galcmmo or his affiliated entities from January 1, 2002 to July 26,
I
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2013 and suffered a net loss (i.e., the funds invested exceeded the total of allfunds received in the form of puiported income or return of principal).
(the "Class").2. Class Representatives and Class Counsel. Pursuant to Civ. R. 23, the Court
appointed Plaintiffs, Cynthia Khoo-Robinson, Charles Lytle, and Jack Tenkman, as the Class
Representatives and Charles E. Reynolds and Brian P. O'onnor of Santen Jk Hughes, LPA and
Jared A. Levy of Dimond, Kaplan & Rothstein P.A. as Class Counsel, as set forth in the Court's
June 19, 2014 order certifying the Class.
3. Preliminarv Annroval. The settlement set forth in the Settlement Agreement
between the Parties is preliminarily approved as fair, reasonable, adequate, within the range of
possible approval, and in the best interests of the Class, subject to a hearing for final approval as
provided herein. The proposed Settlement Agreement is sufficient to justify the issuance of
notice of the settlement to the Class.
4. Class Notice. The Court approves the form and substance of the Notice of Class
Action Settlement attached to the Settlement Agreement as Exhibit A ("Class Notice" ). TheClass Notice is fair, reasonable, and adequate and the proposed form and method for notifying the
Class of the settlement and its terms and conditions meet the requirements of Civ. R. 23,
constitutes the best notice practicable under the circumstances of this case, and shall constitute
due and sufficient notice to all persons and entities entitled to notice. In accordance with the
Settlement Agreement, Class Counsel shall cause the Class Notice to be mailed to the Class
Members as expeditiously as possible and by disseminating the Class Notice through the methods
specified in Section 6.02 of the Settlement Agreement
5. Exclusions. Any Class Members who elects to "opt out" of the Settlement
Agreement and be excluded from this case, the Class, and the terms of the Settlement Agreement
must return to Class Counsel the "Opt-Out Notification Form" attached to the Class Notice with a
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postmarked date on or before To be effective, the Opt-Out Notification Form
must be completed in its entirety. All Class Members who timely submit the Opt-Out
Notification Form shall be excluded from the settlement, shall have no rights with respect to the
settlement and no interest in the settlement proceeds, and shall not be bound by the terms of the
Settlement Agreement. All Class Members who do not timely submit the Opt-Out Notification
Form shall be included in the settlement if finally approved by this Court, shall be bound by the
judgment of this Court, and shall be bound by the terms of the Settlement Agreement.
6. Obiections. Any member of the Class who intends to object to this settlement
must submit a written Objection to Class Counsel at the address noted on the Class Notice with a
postmarked date on or before To be considered, the Objection must state: the
Class Member's name, address, telephone number, signature, and reasons for objecting to the
settlement. The Objection must iso include a statement of the net loss sustained by the objecting
member of the Class. Any member of the Class who does not timely submit an Objection in this
manner will be treated as not having filed a valid Objection and be deemed to have waived all
objections. No member of the Class will be permitted to raise any objections at the Final
Fairness Hearing that the Class member could have raised in an Objection but did not.
7. Entrv of Annearance. Any member of the Class who properly objects to the
approval of the settlement may appear and be heard at the Final Fairness Heaiang
8. Final Annroval. The Court shall conduct a Final Fairness Hearing regarding the
proposed settlement (the "Final Fairness Hearine") on at the I-lamilton County
Courthouse, Room 495, 1000 Main Street, Cincinnati, Ohio 45202. At the Fmal Fairness
Hearing, the Court will consider whether the proposed settlement is fair, reasonable, and
adequate and in the best interest of the Class. The Court will also determine whether the Final
Approval Order, as provided in the Settlement Agreement, should be entered, thereby dismissing
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the case with pre)udice and releasing the Settled Claims against Defendant. The Final Fairness
Hearing descnbed herein may be postponed, adjourned, or continued by journalized order of theCourt without further notice to the Class Members. Attendance at the Final Fairness Hearing is
not required and Class Members need not take any other action to indicate their approval of the
proposed Settlement Agreement. Any Class Members who object to the settlement must submitan Objection pursuant to paragraph 6 above.
9. Effect of Termination. If (A) the Court declines to enter Final Approval Order asdescribed herein, (B) the Effective Date of the Settlement Agreement does not take place on orbefore May 31, 2015 (or within 18 months of the date of filing of this Settlement Agreement ifthere is any appeal of a Final Approval Order entered by this Court), or (C) if either the Plaintiffsor Defendant elects to terminate the Settlement Agreement as provided therein, then the
Settlement shall be null and void, shall have no further force and effect with respect to any Party
in this case or any member of the Class, and neither the Settlement Agreement nor any of its
terms shall be used in this case or any other case for any purpose.
SO ORDERED.
Judge Carl Stich, Jr.
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EXHIBIT E
Al FIDAVIT OF FINANCIAL CONDITION
STATE OF CALI I'ORNI A )) ss:
COUNTY OF ORANGE )
I, Michael A. Willner, am over the age of 21 years and reside at 6 Davis, lrvine, California96260. I make this affidavit (the "Affidavit*') in connection with the class action lawsuitthat has been filed against me!n the Court of Common Pleas, Hamilton County Ohio, CaseNo. A1401348, for the purpose of informing the Plaintif Class of my present and historicalfinancia! condition. I know that any possible agreement with the Plaintiff Class of its claimsagainst me will be in reliance upon the accuracy and truth of the statements and representationsmade by me herein.
I oivn no property or assets, whether directly, indirectly, or beneficially owned, and have nocurrent or prospective income except as hereinafter stated.
When this Affidavit describes assets that I "own" or "hold", or income and I "receive", thedescription includes without limitation (i) assets or properties which are owned or held bytrustees, agents or nominees for my benefit, or on my behalf, and income received by suchpersons for my benefit or on my behalf; and (ii) assets or properties which are owned or heldby my spouse, ex.-spouse, fiancd, and iiicome received by my spouse, ex-spouse, fiance whichsuch person has received directly or indirectly from me within the past forty-eight (48) months.
The Joint Personal Financial Statement of Michael and Marta Willner certified by meunder penalty of perjury on November, 2014 ("Financial Statement" ) attached heretoas Schedule 1 is uue and correct in all respects, properly and fairly presents my financialcondition and describes or includes all of my assets, including all assets in which I have abeneficial or equitable interest, and all my liabilities as of the date of the Financial Statement.Since the date of such financial statement, there have been no material changes in my fmanciaicondition or position except as set forth below.
Without limiting the foregoing, I hereby state and affirm that:
1. In the past 24 months, neither I nor anyone on my behalf has received income,payments, commissions or other value in exchange for my services, except as follows:
Section I of'he Financial Statement sets forth my and Marta's combined annualsalary and commissions. My annual salary as an employee of MW Partners is$126,000. In addition to my salary, I receive a 15'lo commission on gross marginof the sales that I make. The commission averages approximately $500 per month.Marta has gone back to