lerach coughlin stoia geller rudman ......2007/03/12 · 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17...
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LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP PATRICK J. COUGHLIN (111070) JEFFREY W. LAWRENCE (166806) DENNIS J. HERMAN (220163) CHRISTOPHER P. SEEFER (201197) SHIRLEY H. HUANG (206854) 100 Pine Street, Suite 2600 San Francisco, CA 94111 Telephone: 415/288-4545 415/288-4534 (fax) [email protected] [email protected] [email protected] [email protected] [email protected]
– and – WILLIAM S. LERACH (68581) JOY ANN BULL (138009) 655 West Broadway, Suite 1900 San Diego, CA 92101 Telephone: 619/231-1058 619/231-7423 (fax) [email protected] [email protected]
Lead Counsel for Plaintiffs
UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA
SAN JOSE DIVISION
In re VERISIGN, INC. SECURITIES LITIGATION
This Document Relates To:
ALL ACTIONS.
) ) ) ) ) ) ) )
Master File No. C-02-2270-JW(PVT)
CLASS ACTION
DECLARATION OF JOY ANN BULL IN SUPPORT OF AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES
DATE: March 12, 2007 TIME: 9:00 a.m. COURTROOM: The Honorable James Ware
Case 5:02-cv-02270-JW Document 517 Filed 03/05/2007 Page 1 of 7
DECLARATION OF JOY ANN BULL IN SUPPORT OF AN AWARD OF ATTORNEYS’ FEES AND REIMBURSEMENT OF EXPENSES - C-02-2270-JW(PVT) - 1 -
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I, JOY ANN BULL, declare as follows:
1. I am a member of the law firm of Lerach Coughlin Stoia Geller Rudman & Robbins
LLP. I am submitting this Declaration in support of an award of attorneys’ fees and reimbursement
of expenses.
2. Attached are true and correct copies of the relevant portions of the following
documents:
Exhibit 1: Ronald I. Miller, Ph.D., Todd Foster, Elaine Buckberg, Ph.D., Recent Trends in Shareholder Class Action Litigation: Beyond the Mega-Settlements, is Stabilization Ahead? (NERA Apr. 2006);
Exhibit 2: Thomas E. Willging, Laural L. Hooper & Robert J. Niemic, Empirical Study of Class Actions in Four Federal District Courts: Final Report to the Advisory Committee on Civil Rules (Federal Judicial Center 1996);
Exhibit 3: Denise N. Martin, Vinita M. Juneja, Todd S. Foster, Frederick C. Dunbar, Recent Trends IV: What Explains Filings and Settlements in Shareholders Class Actions? (NERA Nov. 1996);
Exhibit 4: Wayne Schneider, Objections to Attorneys Fee Requests in Federal Securities Class Actions, The NAPPA Report, Vol. 19, No. 1, February 2005;
Exhibit 5: Wayne Schneider, An Obligation to Pursue Litigation? Really?, The NAPPA Report, May 1997;
Exhibit 6: In re Charter Commc’ns, Inc. Sec. Litig., MDL No. 1506 (E.D. Mo. June 30, 2005);
Exhibit 7: Scheiner v. i2 Techs., Inc., No. 3:01-CV-418-H (N.D. Tex. Oct. 1, 2004);
Exhibit 8: In re Titan, Inc. Sec. Litig., No. 04-CV-0676-LAB (NLS) (S.D. Cal. Dec. 20, 2005); and
Exhibit 9: In re Krispy Kreme Doughnuts, Inc. Sec. Litig., No. 1:04CV00416 (M.D.N.C. Feb. 15, 2007).
I declare under penalty of perjury under the laws of the State of California that the foregoing
is true and correct. Executed this 5th day of March, 2007, at San Diego, California.
s/ Joy Ann Bull JOY ANN BULL
S:\Settlement\Verisign.set\DECL JAB 00039541.doc
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CERTIFICATE OF SERVICE
I hereby certify that on March 5, 2007, I electronically filed the foregoing with the Clerk of
the Court using the CM/ECF system which will send notification of such filing to the e-mail
addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I have
mailed the foregoing document or paper via the United States Postal Service to the non-CM/ECF
participants indicated on the attached Manual Notice List.
I further certify that I caused this document to be forwarded to the following designated
Internet site at: http://securities.lerachlaw.com/.
s/ Joy Ann Bull JOY ANN BULL
LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-3301 Telephone: 619/231-1058 619/231-7423 (fax) E-mail:[email protected]
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EXHIB IT 1
..
il ~ur v,v 1t i i i ,wi~1u.uvuJ..:: ~` L „J fIN~f2
'r
: i is ~ ~c1. _. n MIN rit EMA
Dismissal Rates By Circuit Within Two Years Of Filin g
45%
40
35
30
25
20
15
10
5
18i
5th 6th
Dismissals
Dismissal rates have doubled since PSLRA .° Dismissals accounted for
only 19 .4% of dispositions for cases filed between 1991 and 1995
More recently, for cases filed between 1998 and 2003, dismissals I i :ne_-
accounted for 40 .3% of dispositions .' Our post-PSLRA dismissal rate
may be slightly overstated, as it may include some dismissals withou
prejudice that will be reversed by amended and better-pled complaints
or dismissals with prejudice that will be successfully appealed There is
no indication that dismissal rates have continued to rise after an ;nil al
adjustment to the tougher pleading provisions of PSLRA .
Dismissal rates vary by circuit . Both the Second and Ninth Circuits,
.which together receive the majority of cases, dismiss approximate)
25% of cases within two years of the filing date The Fourth Circul l ns
the highest rate, dismissing more than 409/o of filings within two years
35%
~f
20 %
7th 8th
Although high, it
appears that settlements
have reached a plateau
as opposed to being on a
continually rising trend .
4
1st 2nd 3rd 4th 9th 10th 11th
EXHIBIT 2
Empirical Study of Class Actions in FourFederal District Courts :Final Report to the Advisory Committee onCivil Rules
Thomas E. Willging, Laural L . Hooper & Robert J. Niemic
.rt
NFederal Judicial Center
1996
This Federal Judicial Center publication was undertaken in furtherance of the Ccritcr'sstatutory mission to conduct and stimulate research and development for the improve-incnt o hjudicial administration . The views expressed are those of the authors and notnecessarily those oldie federal Judicial Center .
(b) How did class action trial rates-compare with trial rates for all other civil caseswithin the districts'As discussed srr(trrr, ill section 2(b), the rate of trial (ju,ry and bench) for class actions and othercivil cases was ill the 3% to G% range in the four districts (scc'i'al)le 1(i) .
(1G) Fee/Recovery Rate sOvervieru. An overarching question concerning attorneys' fees is whether, in addition to cunfcr•ring benefits on attorneys, class action outcomes confer substantial bcucits on class tnenibcct .The major questions I>nscd in this section are : What were the ratios ofattorticys' fees to recovcries? What nlctltods outer titan lodestar have courts used to regulate fees? To what extcut aremethods of fee regulation taken into account the bcnc(t to the class '
(a) What were the ratios of attorneys' fees to recoveries ?Background. Professor Cooper has referred to the "cynical belief' that "many class actions sen•conly to confer benefits oil class counsel ."110 To address this issue, we computed a "fee-recoveryrate" (attorneys' fee awards1'tt divided by gross monetary settlcmcnt21 for ccrtilted class ac-lions where the court a)tl>rovc(l a scttlctncttt .2'1t This rate is mcaningful only in "distributioncases," cases where some form of monetary benefit was available for distribution to class tncm-bcrs after payment of attorneys' fees and exp)etlses, notice costs, and other administrative ex-ltcnscs . Interestingly, itt two districts $0/6 of certified cases that settled were distribution cases,but the comparable figure in the other two courts was 53o/u . 21a
Debt and Di.rars.tion . There were no ice awards to, and few fee requests by, counsel othertitan Illajntifi's' Couuscl.215 In most cases, net monetary distributions to the class exceeded at .
140, Cooper , .mpra note G, at ;}q . Some argue that class counsel at times receive large fees from scale icnts thatprovide nominal benefits or only speculative benefits to the class . See %ICL jd, supra "Ole 34, § 5o.4a, at 23 .()-4 () . Seeoleo Senate S taff Report , frrpra note S, at 73-74-
2.1t . Fee aware!, exclude sanctions and out •nfalockct expenses.4 t. Gross moneta ry settlement includes any. cash payments or quantifiable benefits to class mcmhcrs, sepa rate
payments to class represcntativice , donations to cla ri tics or public interest groups, attorneys' ices and espcuscsawarded by the court, and administrative costs oftile settlement .
2.13 No case that went to trial and did not settle restilted in a final judgment tar verdict inc favor or a class . See irr•Pia § t5(a)•
atq . In the balance of certified and tctihcd cases , the class received sonic (bruit of equitable relief, coupons, pricereductions, or other benefits !bat the court could ti nt oluantify, that the parties did not quantify, or that led to unre•solved disputes concerning value in the litigation or on appeal . We refer to those as "tau distribution cases." In dierenered Afolnrl /'iek• (/p Tnrrk /.irr'atinn, the principal settlement ( vacated on appeal) consisted ofdistrihutiun of$1,nnn coupon certificates to an estimated 5-6 million class members. Objecting class members placed economicvalue on the coupon distribution that differed significantly from tlcfcnelant 's estimates . In re Central ,1Lrtor, Corp.('irk-Up Truck F'uel'l'ank Prods . Liao, Litig ., 55 F,3c1 768, 307 (311 Cir.), rerf, denier!, u(i S . Co . 1 8 (t1p ) . The feeaward, vacated not appeal, was 59 .5 million . /d, at 8 :m
Sometimes litigants tetded on IiaLility issues hut left each class rucntber ' s claim to lie detcnuincd individualh,such that the total amount to be distributed to the class was not known at the time of the fee award . For example,under the claitos resu lotion procecture in n ot e settled ca s e, class nletnhers who filed valid clainss could receive too% ofthe medical insurance benefits ctue to them for certain medical sc rv ices ,'I'1te settlcntrtrt did tent place a dollar limit tanclaim reroveries . Fee awards totaled $g ,7 Million-
24r, f)efe darts ' moose! unsuccessfully requested fees in ti ne case each in three districts ; case tiles did not Co ol .
torocys ' fees by substantial margins . The fee-recove ry rate infrequen t ly exceeded the traditional
3 .3 .3% contingency fee rate. Median rates ranged from 27% to 30 % . Most fee awards ill the study
were between 20% and 40 % of tltc gross moneta ry settlement (see Figures (i7 and 63) . '
Some distribution cases also included other class relief that the court did not quantify .2t7
Tltis occurred about a third of the dine ill two districts and about 17 % and ;zy% of the time in
the other two courts . To the extent that moneta ry value can be associated with that relief, the
data I)rescntctl ill this subsection understate tits value of gross settlement and thus possibly
overstate fcc- recove ry rates .
'1•Ite fcc-recovery rate calcul ations discussed ill this subsection do riot include cases with no
nct moneta ry distribution to class mentbers (no distribution cases ), because those settlements
coutaincd only equitable or outer nouquautiftable relie f. Fees and costs comprised all or a large
1/crccnt :tge of the scttlelllctlt funds in those cascs . 2
(b) I I ow were fees calculated' :'
Background. In most study cases-as in most class actions generally- the court awarded attor-
neys' fees under the centu ry-old co mm on fund doctrine .1'rtTraditionally, in determining fees in
common fund cases, courts included the size of the fund as a principal factor and frequentl y
Lain the amounts sought . Parties other than plaintiffs or defendants requested fees in two cases in only one dist ri ct.
The fi rst was a $300,ouo fee application by noalcatl counsel relating to legal services performed before the court
appointed lead counsel pursuant to a competitive bidding process . Although the court declined to award the rc-
questcd fees front the settlement lurid, the order stated that nunlead counsel might Ire entitled to fees on the basis of
quantum ,inns (. In the other case, counsel for a ct objecting class member unsuccessfully requested $ t$t,nnn in fees .
a.lfi . In one district, N .I), Cal ., the median fee award to class counsel was $1 .5 million, with an average fee award
ofapproxirnatcly $2 .5 million . In the other three districts , the median and average fee awards were smaller-with
medians ranging between $o .G million and approximately $ t million and averages from just under $0 .75 million to
approximately $ t .4 million ( see Figure Grp) . I lowevcr, the N .D . Cal . average fee award was within the range of theother three districts ifouc excludes the district's largest fee award ($ ty .9 million).
N .D . Cal, also had the highest median ($ 5 .t million) and average ($ to million ) gross monetary settlement . In
comparison, the other three districts' median settlement amtnmts were between just under $ i million and approxi-
statcly $3 million, with average amounts betwent $ 3 .2 and $ 4,7 Million (sec Figure 70) . For N.D . Cal., even if the
largest senlemcnt ($7j .(i million) is excluded , the district still had a comparatively large mean settlement amount
($7. 2 ruillion ) . I lowcvcr, sonic perspective is offered by looking at the district's average gross mone tary settlement )xr
notice sent , which was only slightly above die compa ra ble average (or time other three districts combined ,
x17. For example , in One case , class counsel valued the settlement' s "noncasli" bene fi ts at $fi .y million in addition
.) ..g million monetary distribution . In another case, the defendant sultlclectuntetl the$457,000 mone tary die-to the $ (tribution by agreeing to implement practices designed to increase the representation of women and Afri can .
Americans in its workforce .it . Set atrpra note 144 .'1'ylcically, the only payments defendants nude in these cases were to attorneys, class
rcprescnutives , and noticing companies . We will refer to these payments collectively as "settlement costs ." Fee
awards as a percentage u(drese scttlewent cost were f.6%, qt%, 85%, and So"% on the average for the four districts
(see Table 45) . The median percentage of gross settlement amounts attributable to costs of administe ri ng the settle
ncent (primarily notice) was s % across the four districts in the 21 cases for which data were asailahlc . In these ras m
the median amount of such expenses was $tuo,unn .
2.19 . The principle govcruing the doctrine is that "persons who obtain the benefit or a Inwsu ;t without t'ssnuihat•47; .ing to its cost are unjustly enriched at the successful litigant's expense ;' Boeing Co . V . Van ( : enters , 444 U .S .
478-79 ( t98 0) . See aLro Mills Y, Electric Autu•Lite Co ., :m U .y. :175,392 (1 })7o) . Srr~rnrrnllr Alan 1 ticec'h l Diane
Shcchey, Awarding Atturncys' Fees and Ntanaging Fee Litigation 5 .44 & 75,•1ti (Fedctal,ludicial Center n94) ,
M Pc'scclin rC/us.t Ar(iaru fi ha
EXHIBIT 3
a
RECENT TRENDS IV:
WHAT EXPLAINS FILINGS AND SETTLEMENTS
IN SHAREHOLDER CLASS ACTIONS ?
by
Denise N. Martin, Vinita M. Juneja,
Todd S. Foster, Frederick C. Dunbar
1
L1
1
NATIONAL ECONOMIC
RESEARCH ASSOCIATES
Exhibit 3
I u'DomiaConsulting Economist,
RECENT TRENDS IV:
WHAT EXPLAINS FILINGS AND SETTLEMENTS
IN SHAREHOLDER CLASS ACTIONS ?
by
Denise N. Martin , Vinita M. Juneja,Todd S. Foster, Frederick C. Dunbar
November 199 6
NATIONAL ECONOMIC
RESEARCH ASSOCIATES
50 MMN STREET, WHITE PLAINS . NEW YOU 10606
TELEPHONE : 914.448.4000 FAcsI iII1 914.448.4040
<<
National Economic Research Associates . Inc. (4ERA), a Marsh & McLennan Company, is aninternationalfirm of consulting economists that provides research and analysis on a wide varie ty ofbusiness and public policy issues. We support our findings with careful docwnentation and translatecomplex material into clear language.
Established in 1961 . NER.4 has earned wide recognition for its work in energy, public utilityregulation, antitrust, environment, securities litigation , transportation, health, intern ational trade,labor, teleeommunicatiors and sports. The firer consists of more than 275 full- time staff membershighly qualified in economics, finance, statistics, business administration , computer science andmathematics. NERA has completed assignments for many of the world's larg es t corporations and lawfirms, federal, state and municipal agencies , and governments.
•
Consulting Economists
L
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L
shareholder litigation reform. Consistent with the results in Grundfest's study, the sample of
cases for which we have plaintiffs' claimed damages indicates that 20 percent settled for less than
S2 million (Table 8a) . The ratio of awards to claimed. damages has a mean and dispersion similar
to the larger investor losses sample described below .1 6
In Table 8b, we examine the sample of cases for which we calculated investor losses I
and find, similarly, that about 26 percent of the settlements between 1991 and June 1996 are less
than $2 million. As in the plaintiffs' claimed damages analysis, our data also reveal that many o f
these cases settle for a lower proportion of investor losses than suits with higher absolut e
settlements (Figure 5) . 1
We estimate that at least 21 percent, and possibly 42 percent of these low-value I
settlements may well be nuisance suits, and are likely settling for nuisance value . We first note
that about 9 percent of settlements are for less than $1 million . Of these, about two-thirds settle
for an amount that is a much smaller fraction of total investor losses than the average for the
whole sample . Most of the rest of the suits with settlements under S2 million also settle at less
than the average percentage of investor losses but only about a third of them are at a much
smaller fraction of total investor losses than the average for the -whole sample. Notably, we find
that the average settlement as a percentage of investor losses for the settlements betwee n
$1 million and S2 million is also lower than the average for the full sample .
E. Plaintiffs' Attorney s' Fees
In Table 9, we present the fees (and fees and expenses, when known) allocated t o
plaintiffs' attorneys . Not much here has changed over the past several years . Regardless of case
(. . .cont'd)avoidable defense costs unless the defendant recognizes some probability, however small, that a jury will rulein plaintiffs' favor." Joseph A. Grundfest, "Why Disimply?" Harvard Law Review, Vol. 108, 1995,
pp. 740-741 .
16 Low value suits are not necessarily indicative of a lack of merit . For example, these settlements mayrepresent the efficient outcome of negotiations between plaintiffs and defendants in cases where a jury trialwould be particularly costly or risky. For a more detailed description of the theoretical reasoning, seeDunbar, et al., October 1995 . _
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size, fees average approximately 32 percent of the settlement . This finding holds even for cases
with settlements in excess of $50 million. For the period 1991 through June 1996, fees to
plaintiffs' attorneys (in cases where fees could be separated from expenses) total $1 billion .
Cases for which an aggregated figure for fees and expenses was reported are
presented in the bottom half of Table .9. In contrast to the findings for fees alone, the total of fees
and expenses decline as a percentage of settlement value when settlement value exceeds $50
million. This result may indicate that expenses are relatively independent of size of settlement ;
that is, a case with a large settlement incurs about the same expenses as a small case . Given the
small sample of cases in this category, however, we cannot draw any general conclusions about
the pattern of expenses .
F. Case Dispositions and Filings by Defendants' Primary Industr y
As is apparent from Table I Oa, high-technology companies are a major focus of
securities fraud class actions . In -the past, almost one-third of the settlements have come from this
sector. However, in 1995, only 27 percent of settlements came from the high-technology sector,
down from 34 percent in 1994 . And, so far in 1996, the percentage of settlements by high-
-Mai technology companies has slowed considerably to 15 percent . In addition, as Table 10b
demonstrates, dismissals as a percent of all dispositions in this sector are somewhat higher than
the average dismissal rate. So although cases continue to be filed in this sector more than ever,
either plaintiffs or defendants seem to be waiting to settle, perhaps waiting for a motion to dismiss
to be decided .
Over the past six months, approximately 10 percent of settlements involved the
financial and insurance sector (a group that excludes commercial banking), the highest percentage
settled in this industry over the 19.91 to 1996 time period . Similarly, filings in this sector over the
past 10 months are at a higher percentage of the total filings than they have been since 1994 .
Also, as Table 10b demonstrates, dismissals as a percent of dispositions in this sector run at a
much higher rate than the average dismissal rate and than the rate for other sectors we have
classified . The data also suggest that plaintiffs' attorneys' fees as a percentage of the settlement
EXHIBIT 4
NAPPA Executive Board :
Keith L . JohnsonPresidentState of Wisconsin Investment Board
Everard DavenportVice Presiden tDallas Police and Fire Pension Syste m
Mary Beth BraitmanIce Miller
Alan P. Clevelan dNew Hampshire Retirement SystemsSheehan, Phinney, Bass & Green
Bruce Gambl eMilberg Weiss Bershad & Schulman
Diane LeaseOhio Police & Fire Pension Fun d
Denise MoungerMississippi Public Employees'
Retirement System
David MuirLos Angeles County Employees'
Retirement Association
Dan M. SlackState Universities Retirement System
of Illinois
IN THIS ISSUE:
• Pension & InvestmentsLetters to the Editor :The Future of Public DB Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
• Pension & InvestmentsOther ViewsAn Invaluable Tool in Corporate Reform ... . . . . . . . . . . . 5
• Sacramento Business JournalLetters to the Editor:A Defined Benefit PlanSuch as Ca1PERS is Superior . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
• Legislative Update . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
• Objections to Attorneys Fee Requests inFederal Securities Class Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Hyatt RegencyLake Tahoe (North Shore), Nevada
June 29 - July 1Richard H . KoppesAdminis trative OfficerEditor, The NAP-PA Report
Pamela AndersonNAPPA Administrative Assistant(916) 429-2545 Fax (916) 429-8616
Conference Brochure will be mailedby April 1, 2005
NAPPA Website : www.nappa .org
NATIONAL ASSOCIATION OF PUBLIC PENSION ATTORNEYS • 930 FLORIN ROAD, SUITE 200, SACRAMENTO, CA 95831
Pension Proposals .With the President's emphasis on Social Security and tax code
reforms, it's not clear how much time the Administration will devoteto its pension package . In each of the past two years, the Adminis-
tration has offered such a package in its budget proposal and isexpected to do so again this year. The package includes LifetimeSavings Accounts (LSAs), Retirement Savings Accounts (RSAs),
and Employer Retirement Savings Accounts (ERSAs) . Both LSAsand RSAs establish accounts into which individuals could save up to$5,000 per year in after-tax funds . Earnings on funds would be tax-free, similar to Roth IRAs . Under an LSA, an individual could
withdraw savings at any time and for any purpose . as opposed to anRSA from which an individual could make withdrawals only afterage 58 . The ERSA would consolidate 401(k)s, 403(b)s, 457s, andother savings vehicles into a single new plan .
More likely to receive attention are the proposals of the Housepension champions, Rob Portman ( R-OH) and Ben Cardin (D-MD),and Senate Finance Committee Chair , Charles Grassley (R-IA) .Both the House and Senate pension proposals received committeeaction during the last Congress , but failed to move to eitherchamber'sfloor .
Objections To Attorneys Fee Requests In Federa lSecurities Class Action s
By Wayne Schneider
General Counsel, New York State Teachers' Retirement System '
As many readers of the NAPPA Report may be aware, NYSTRShas recently begun to challenge attorneys' fee requests in certainfederal securities class action settlements . Like many of you, we hadbeen following the successes achieved by public funds serving aslead plaintiff in federal securities class actions in obtaining favorablesettlements and quite reasonable fees paid to class counsel . Likeyou, we had been particularly impressed with highly favorablecounsel fee paid to class counsel in the Cendant case .2 Obviously,if the level of fees being negotiated by public sector funds were toprevail generally in federal securities class actions, public pensionplans, as well as all other investors, would reap a considerablebenefit, inasmuch as every dollar which does not go to counsel goesto investors .
We were, therefore, shocked when the settlement notice in the1 securities class action came to our attention . According to thenotice, class counsel would be requesting a fee of 35% of the $112million settlement amount. How could they do that? Wasn't thattotally out of line with the fees awarded when public pension fundsserved as lead plaintiffs? With apologies to Richard Koppes, didn'tthey get it ?
Although the time to object in DPL had passed, NYSTRS felt itcould not let this outrageous request just pass by . We wrote a letterto the judge in the DPL case . And we did not stop there . We startedlooking at other settlement notices . Unfortunately, we started seeing
other cases in which a significant settlement had been achieved butclass counsel was asking for a fee that appeared to be excessive andunreasonable in light of the fees public funds had been negotiatingin federal securities class actions . Letters to the judges in the CBT
Gr oup case' and the Info ace case soon followed .
Although the court in DPL treated our letter and a letter sent bythe State of Wisconsin Investment Board as "untimely" objections,
the court wound up awarding a 20% fee, instead of the 35% feerequested!° The court in InfoSpace likewise treated our letter (and
letters sent on behalf of the Public Employee Retirement System ofIdaho (PERSI) and the State Retirement and Pension System ofMaryland) as objections and set the fee application down for aseparate hearing on June 28, 2004 (which happened to be the Fridayof the NAPPA Educational Conference in St. Louis) . Subsequently,we received a stack of papers from plaintiffs' class counsel inInfoSpace and prepared an additional letter to the court . We thenappeared at the hearing on June 28th .
In the meantime, we spotted the settlement notice in Honeywellindicating that class counsel would be asking for 25% of a $100million settlement . We filed a letter containing a discussion whichbuilt upon our experiences in the previous cases . We were pleasedto be joined by PERSI again and by the Pennsylvania Public SchoolEmployees' Retirement System . At the hearing in Honeywell, JudgeDebevoise awarded 20% instead of the 25% requested .' Thefollowing week, we learned of the decision in InfoSpace . Instead ofthe 25% fee which had been requested, Judge Zilly awarded a fee ofabout 12% !
More recently, however, results have been mixed . In i2 Tec -nolo Ries , the court awarded 25% fee in a case involving a settlemen tof some $85 million over our objection . We considered it a moralvictory because the settlement notice stated that counsel would beasking for a third of the settlement. In Aft, following letters frommy System and PERSI and fruitful discussions with plaintiffs' classcounsel, Judge Pauley awarded a fee of 24% of a $6 .75 million
settlement, rather than the one-third fee proposed in the settlementnotice ?
NYSTRS is continuing to review notices of settlement and willcontinue to object to fee requests which we believe are unreason-able .' We see three positive benefits from this effort :
(1) To the extent the objections are sustained, NYSTRS as wellas all members of the class realize a benefit in the form of a larger
residual fund available to pay investor claims .
9
• (2) When the courts write opinions explaining why they haveawarded a reduced fee, their opinions ultimately become availableto the rest of the federal bench and increase judicial awareness ofinvestor concerns with excessive fee requests .
(3) Even where the objection is not sustained, the court willhave still been made aware of investors' concerns with excessive feerequests and of the growing number of favorable fee awards obtained
by public pension funds that show far lower fees can provideadequate and fair compensation to class counsel . Over the long run,these actions will, we feel, eventually find expression in reduced feeawards by courts in federal securities class actions .
The balance of this article will summarize what we have learne dfrom our experiences to date .
1 . An objection to a fee request would not be necessary if thelead plaintiff engaged in hard fee negotiations at the frontend of the case .
Lead plaintiffs are fiduciaries for the absent class of investorswhose interests they are supposed to represent . One of the mostvaluable services, if not the most valuable service that lead plaintiffsperform for their classes is the selection of appropriate class counseland the negotiation of a reasonable and fair fee arrangement' Thetangible benefits flowing from the proper discharge of this functionby public sector funds have been illustrated again and again in thecases we cite in our letters to courts .
Without doubt, a lead plaintiff has the maximum negotiatingleverage at the outset of the case. If one firm doesn't want to do thecase on an investor-friendly fee basis , the lead plaintiff can alwayslook for another qualified firm willing to take the assignment for afavorable fee . Today, securities class action lawyers are literallyfalling all over themselves, trying to get appointed class counsel bypotential lead plaintiffs . The haunt the meetings of NAPPA , theCouncil of Institutional Investors, and other organizations in whichpublic pension funds are represented . They send out innumerablenewsletters, hold conferences an cocktail parties, and engage inendless other activities to promote themselves . In this highlycompetitive environment, potential lead plaintiffs should have everyreason to expect they can engage competent counsel at favorablerates .
-* Moreover, courts ought to wel come the fee requests publicfunds have negotiated. r a wi"' n winsituation . investors obviouslyend e fit because more of the settlement will be coming to them and
not going into the pockets of the lawyers . The conscientious workof lead plaintiff in assuring that the fee request is fair an reas ocons dera blx eases the burdens on the court when it comes to time
to review the fee request . And class counsel knows that they will getthe fee they agreed to, provided it is reasonable .1 °
Unfortunately, however, notwithstanding the irrefutable ben-efits of negotiating a favorable fee agreement on the front end andthe buyer's market for class counsel, there still appear to be numer-ous cases in which lead plaintiffs do not engage in hard fee
negotiations at the front end . For example, we haven't seen a lot ofevidence of hard upfront fee negotiations in cases in which my
System has filed an objection . Usually, there is only a hint as to whatthe initial fee arrangement was, if it is mentioned at all .
So far as we can tell from our experience, if the lead plaintiffholds off negotiating the fee arrangement it does not have an awful
lot of leverage when the matter is finally raised. The lead plaintiffcan't very well go into court and admit that it did not negotiate a feearrangement or, worse, that it acquiesced to the fee proposal of class
counsel without any negotiation . Class counsel will assert the leadplaintiff is acting in bad faith in attempting to reduce their fee afterthey have done the work on the case . The lead plaintiff may bereduced to begging class counsel not to put in a fee request that is soexcessive as to totally embarrass the lead plaintiff.
Negotiating hard on the front end is particularly critical forpublic sector pension plans, even apart from the benefits to the absentclass . We all know there are many opponents of public sectordefined benefit pension plans who are ready to seize on and trumpetevery-perceived or imagined failure of public sector pension funds . "
ny un w c an y agrees to so-called "benchmark" 25%, 30%or one-third fees provides easy grist for their mill . Today, the hardnegotiation of favorable fee arrangements represents not only theproper discharge of the lead plaintiff's duty to the absent class butalso a matter of self-defense .
The investor community owes a tremendous debt of gratitude tothose public pension funds which, having undertaken to serve as leadplaintiff, have taken their responsibility to the absent class seriously,have negotiated hard on fees and thereb benefited their classest ough favorable fee arrangements . But these public funds havealso convincingly demonstrated 25% or one-third fees awards arenot necessary to adequately compensate class counsel . Their workhas given considerable weight to objections in cases where a fair andreasonable fee arrangement was not negotiated.
2. An objection to a fee request would not be necessary if classcounsel policed themselves and limited their fee requests topercentages that were reasonable.
At the fee-setting stage, class counsel obviously have a funda-mental conflict of interest. Every additional dollar that goes into thepockets of class counsel is one less dollar that goes into the pocketsof their real client, the absent class. We would not have to object ifclass counsel, as fiduciaries to the class, took the lead in asking fora reduced fee, rather than putting in an excessive request and thenhoping no one complains . If class counsel policed themselves andlimited their fee requests, there would be no reason for public fundslike NYSTRS to file an objection with the court . For example, eventhe plaintiffs class action bar will now roundly condemn the 35% feerequest in DPL and implicitly acknowledge that NYSTRS and SWIB
were entirely justified in complaining about it . But why did classcounsel request a 35% fee in the first place? Why didn't they stepback and admit to themselves this request was just too high?
Class counsel should know that, for years, public sector pensionfunds have been engaging investment managers, consultants, law-yers and other professionals to assist them in managing the billionsof dollars in pension assets under their care . Class counsel shouldalso know that, in the process, public funds have learned it neve r
10
makes sense to do business with someone you cannot trust will do theright thing . It never, ever pays . A plaintiffs' class action firm shouldnot expect to get assignments from public sector funds serving aslead plaintiffs if it goes out and makes excessive fee requests in othercases (presumably on the assumption that our backs are turned andit can get away with it) and, on top of that, makes ridiculousarguments when it is called upon to justify an excessive request .Why would any public pension fund ever want to work with a firm
like that? How could a fund ever believe anything that counsel toldthe fund? In the long run, I believe, those firms which self police andare recognized as makers of reasonable fee requests will get theassignments from public sector funds .
With public funds continually demonstrating that competentclass counsel will work for fees which are below the level of feescommonly awarded in securities class actions heretofore, trying toturn back the clock should not be the right response . Class actionfirms should instead seek to become "leaner and meaner" and watchthe time spent on cases a lot more closely . As reduced fees becomemore prevalent, it may be the case that class action firms will nolonger be able to subsidize marginal cases brought on speculation outof the excessive fees reaped from other cases . But public pensionfunds, as well as investors generally, will likely take that as a benefitbecause it will mean that the targets of such speculative cases willno longer have to bear all the burdens of defending them but willinstead be able to devote their full attention to making their busi-nesses more profitable .
3 . An objection to a fee request is ultimately an appeal to theconscience of the court.
Our efforts to date have taught us that the fee awarded very muchdepends upon the judge who is handling the case . This is hardly arevelation as the judge is the one who has been through the case,heard the arguments, read the papers, and dealt with issues . Whetherthe fee requested gets reduced or not depends upon how the courtfeels about the case, the work performed by class counsel, and whatthe court thinks ought to be an appropriate fee . Investors, of course,very much welcome and appreciate those court decisions which arereining in excessive fee requests and limiting class counsel to feesthat are reasonable . On the other hand, inasmuch as every judge isgoing to go at the question in his/her own way, investors should notbe discouraged by any adverse decisions. We should just continuebuilding up the record of favorable fee awards and continue makingthe point that the reasonableness of fee requests must be judged inlight of those awards .
4 . Keep in mind class counsel invariably argue a lack ofobjections means investors acquiesce in the fee request.
As ridiculous as it may seem, plaintiffs' class counsel invariablyargue that an objection to a fee request should not be given seriousconsideration because all or most of the rest of the class has not comeforward with an objection. Indeed, they suggest that the lack ofobjections from the rest of the class indicates that the class (otherthan objectors) acquiesce to the fee request . And, as unbelievable asthat may seem, some courts, as part of their criteria for judging feerequests, look to whether objections to a proposed fee request havebeen received from the class .12
Somehow it is conveniently forgotten that the reason why classactions exist in the first place is that the claims of individual classmembers are too small to be prosecuted on an individual basis . If
they are too small to be individually prosecuted, how do theysuddenly become so large when the case is settled for a few cents onthe dollar that the typical class member can be reasonably be
expected to come up with an informed opinion about the reasonable-ness of the fee request? Moreover, the settlement notice that is sentout to the class rarely has the information a class member might need
to make -an informed decision about the reasonableness of the fee .
There is only a brief discussion of the history of the litigation andthere is never any discussion of the hours claimed to have beenexpended and the rates used to determine value of the servicesrendered .
At bottom, the argument is nothing more than a rhetorical trap .
Even if 5, 10, 20 or 100 class members were to file objections, classcounsel would invariably say the objections still have to be dis-counted because the "vast" majority of the class has not objected .
That said, we have repeatedly found that even if only one or a fewdisinterested investors speak up and say the fee requested is just toohigh, the courts will take notice and the class is better positioned toget a fee award which is fair and reasonable . So why not help out indepriving class counsel of the opportunity to make this frivolousargument?
5 . If there is a fiduciary obligation on the front end to considerbringing a federal securities action or seeking lead plaintiffstatus, there must , a fortiori, be a fiduciary obligation toconsider whether fee requests at the back end are reasonableand not excessive.
Over the years, NAPPA members have received all sorts ofpitches that there is a fiduciary obligation to consider whether a planshould seek lead plaintiff status in pending federal securities classactions or otherwise bring their own actions . Whatever the merits ofthis argument, the argument that there is a fiduciary obligation toscrutinize class counsel fee requests has to be so much stronger .
Unlike the consideration of whether to bring an action wheremost of the relevant facts are not known and cannot be found out untildiscovery is permitted, the facts relevant to a fee application areeither known or ascertainable. Being a lead plaintiff in auablyentails years of work toward an unce rtain end; being an objec tor
enters only a few hours o research an etter writing . While ove
200 securities cases are brought each year, the num er of settlementsthat have to be reviewed can be kept to a reasonable number by anappropriate screen .13 Unlike the consideration of whether to bring anaction where the amount of the eventua recovery i own, there
is absolute certainty as to the amo s e w en the fee request
i beina considered . When considering whether to see ea p aintiffstatus, there are a myriad of considerations . When consideringwhether to object to a fee request, there is really only one : is the fee
request reasonable? And, of course, there is class counsel's inherentconflict of interest, as discussed above. If all of the foregoing werenot sufficient, shouldn't plan counsel consider the fact that much of
any settlement comes either from the target company or the insur-ance carrier whose premiums are ultimately paid by shareholders .
As Keith Johnson was quoted in the Forbes article (at p 153), "You'rejust taking money out of one pocket and putting it, in the other .""Since you are being paid with what is largely your own money, don' tyou have some obligation to assess whether the toll charge you pay
on that transaction is reasonable, and not excessive .
Most federal securities class actions settle for less than $10million, and often for less than $5 million . A well-plead objection
to an unreasonable fee request following a large settlement can yieldan amount of additional money to the class which is greater than thegross amount of the settlement in any number of federal securitiesclass actions . DPL and Honeywell are good examples of that .1 5
ConclusionPublic pension plans have a lot of different issues competing for
their attention, may not have instant access to information about the
plan's purchases and sales of a particular stock during a particularperiod, and/or may not have a lot of familiarity with federalsecurities class actions . But this is an area in which a concerted effortby public pension plans today can reap tangible benefits goingforward .
Endnotes1 The opinions expressed are solely those of the author and do not
necessarily represent the views of the System by which he isemployed.
See In re Cendant Corp . Securities Litigation, 109 F Supp2d285,302 '306 (D NJ 2000), vacated, 264 F3d 201 (3d Cir 2001),cert denied, 535 US 929 (2002), after remand, 243 F Supp2d166, 174 (D NJ 2003) involved a settlement of extraordinarymagnitude, but the fee initially awarded was only 8 .275% of thesettlement amount, albeit some $262 million . On remand, it wasreduced to $55 million pursuant to counsel's agreement with thelead plaintiffs.
3 We never heard anything from the court in CBT and nothing hasbeen said by the plaintiffs' bar about what happened in that case .
4
5
6
The fee decision is reported as In re DPL Inc ., SecuritiesLitigation, 307 F Supp2d 947 (SD OH 2004) . Fortunately, as itturned out, there had been some timely objections to the feerequest . But this raises the troubling question whether the courtwould have actually awarded 35% if there had been no objec-tions . A state court did just that in the parallel state court suitagainst DPL that was settled for $35 .5 million . 307 F Supp2dat 949n4 .
Judge Debevoise dictated his decision to the court reporter .Although his decision has not been published, we have ob-tained a copy of the transcript .
In re InfoSpace Securities Litigation, 330 F Supp2d 1203 (WDWA 2004) .
County Retirement Association and NYSTRS had written let-ters . There Judge Castel awarded a fee of 25%, rather than the30% proposed in the second of two settlement notices .
Obviously, the ability of any fund counsel to prepare and file anobjection in a given case is constrained by a number of factors .In some cases, the fund is not a member of the class and does nothave standing to object . In many, the amount of the settlementand fee request is too small to justify spending time on anobjection even on behalf of a fund as large as NYSTRS . Finally,
the time plan counsel has available to devote to this effort issubject to all the other matters which have to be handled bycounsel, including fiduciary, investment and benefits issues .
There are, of course, many different approaches available forstructuring the fee arrangement, including differing percent-ages based upon the amount of the settlement and/or the stageat which the settlement occurs and for capping the fee so as tokeep it within reason . This means lead plaintiffs have to put alot of thought and analysis into the fee question before agreeingto any fee arrangement .
10 Consider In re Interpublic Securities Litigation, 2004 US DistLEXIS 21429 (SD NY 2004) . Although the lead plaintiff hadnegotiated a 20% cap on fees, Judge Cote determined a fee of12% of a settlement having a minimum value of $77 million wasreasonable .
11 See e .g . "Dirty Money : The Class Action Industrial Complex"Forbes, pp 150 et seq (September 20, 2004). In its transparenteffort to bash public sector funds over the level of fees awardedin federal securities class actions, this cover article completelyoverlooked the fact that public sector funds have actually beendoing a lot to bring the fees paid to class counsel down .
12 See e .g . Reinhardt v . Lucent Techs ., 327 F Supp2d 426,435-36(D NJ 2004) .
13 As previously noted, there are a variety of re asons which placea practical limit on the number of cases which a pl an counsel canconsider . In the case of much smaller funds , it may not beneither practical nor cost effective for plan counsel to do anyreview .
14 Keith's point and the undeniable asymmetry of benefits underthe current system where class member realize a few cents on thedollar while class action lawyers reap multiples of their timeexpended raise real questions whether the current system is thebest way to resolve complaints of investors arising out of thefederal securities laws . If fees in federal securities class actionsdo not settle to levels which are generally fair and reasonable,
institutional investors may well have to start thinking aboutdeveloping an alternative mechanism for resolving these claimswhich is fairer and less costly .to the investors and may in theprocess eliminate needless speculative cases .
7 In re Alloy, Inc ., Securi ties Litigation , 2004 US Dist LEXIS 1524129 (SD NY 2004) . See also In re AMF Bowling SecuritiesLitigation , 334 F Supp2d 462 (SD NY 2004), a case involvin gan aggregate settlement of $20 million in which the Los Angeles
Please do not be deterred by the fact that your fund has notsought lead plaintiff status in a federal securities class action, ifthat is the case . Your fund has every right to object to a proposedfee request just like any other member of the class, 99 .99% ofwhich have never been lead plaintiffs .
12
EXHIBIT 5
The NAPPA ReportAN OBLIGATION TO PURSUE LITIGATION? REALLY?
ByWayne Schneider, General Counse lNew York State Teachers' Retirement System *
It was suggested in this newsletter (February 1997 issue) that public employee pension plans areobligated to pursue Federal securities litigations, presumably as lead counsel under the recentamendments to the Federal securities laws .
At the outset, I agree plans ought to file proofs of claim in securities litigation . Doing so involvesa small amount of effort and the return can be significant .
But do plans have an obligation to do anything more than that? The following outlines the kindof inquiry which might be made when considering whether to intervene in a Federal securitieslitigation .
Why Doesn't Fidelity Sue?
The governing prudence standard, however formulated, refers one to the hypothetical "prudentperson" or "prudent expert" . One might observe the Fidelitys of the world almost never enter theFederal securities litigation arena . Why not? In instance after instance, they are the largestshareholders. Why aren't they exercising superior wisdom and perspicacity in deciding not tosue?
I have heard the Fidelitys of the world fear their investment departments will be turned upsidedown for weeks on end during discovery. This threat alone makes the thought of pursinglitigation unpalatable . Shouldn't public plans have the same concern? If not, why not? Even if aplan were not concerned for its own staff, should it not be concerned where the stock at issuewas purchased by an outside manager? Before urging a plan to rush to the front, aspiring planlitigation counsel, I believe, must address the concerns that keep the Fidelitys on the sidelines .
Federal Securities Claims as Plan Assets .
Yes, a class action claim may be characterized as a plan "asset" . But plan executives do notconsider assets and their prospects in isolation . They make a rational calculation whether pursingone investment is better than pursing another . Isn't a plan entitled to make the same kind ofcalculation here ?
he Issue is Additional Incremental Return.
We all know there are any number of plaintiffs and their lawyers out there willing to bringFederal securities law claims . The question is typically not whether there will be a return, buthow much better off will a plan be by taking the lead . In other words, what's the expectedadditional return ?
It is argued one advantage of taking the lead would be to lower the attorney's cut from 30% to 25or 20%. This is, without a doubt, a significant and welcome concession and, if widely adopted,would be of substantial benefit to all investors, not just public sector plans . Notwithstanding,from the standpoint of an individual plan in a given litigation, this concession only increases theplan's return by 7 or 14% . In other words, if a plan would "normally" net $70,000 from a clas s
DOCS\224967v1
Exhibit 5 .
action, taking the lead and obtaining the appointment of its counsel would only net an additional$5,000 or $10,000. Plan executives have to ask themselves: is that amount of additional returnworth the effort ?
Aspiring plan counsel will probably argue that additional incremental return will come from alarger overall settlement achieved through their superior skill and diligence . Even so, how muchbetter do they think they can do? Suppose a plan would expect "normally" to receive a $100,000by merely filing a proof of claim but would be willing to shoulder the burdens of becoming alead plaintiff if it could recover an additional $100,000 . Is it realistic to expect aspiring plancounsel will do 100% better job?
Presumably aspiring plan counsel would point out all the uncertainties in Federal securities classaction litigation. One must frame a complaint which will pass muster under the supposedlyheightened pleading requirements for Federal securities claims, just to get in the court housedoor, One must find defendants who are, in fact, good for the money . One must develop a casewhich will cause these solvent defendants to part with a good chunk of money . And finally, andperhaps most important, the plan itself must have a significant enough stake in the settlement thatthe increased settlement pot, in fact, results in the desired additional recovery .
By way of illustration, my plan recently received a check for approximately $118,000,representing approximately 16% of its reported loss . Suppose my plan's threshold forintervention had been $100,000, aspiring plaintiffs counsel would have had to achieve asettlement of about 30 cents on the dollar . Where would aspiring plan counsel get the additionalmoney? Bear in mind the overall settlement fund was $55 million .
Working for Someone Else .
There is at least one significant difference between being lead plaintiff in a Federal securitieslawsuit and almost any other kind of investment a plan might make . The plan will mostly beworking for others, not the plan's participants and beneficiaries . (Most of the purported benefitsto the plan from taking the lead are in "the long run .") Doesn't this raise a fiduciary issue?
Conclusion.
As I see it today, being lead plaintiff doesn't make much sense except possibly where the planhas sustained such a large loss that receiving even one or two cents more on the dollar wouldmean hundreds of thousands of dollars in additional recovery . Where have I gone wrong?
(Editor's Note : The issue of securities litigation will be more fully explained at a workshopsession entitled "Securities Litigation : A Brave New World?, "at this June's NAPPA conferencein Monterey. Richard Walker, General Counsel of the Securities and Exchange Commission willbe the speaker)
These views expressed are solely those of the author and do not necessarily represent the viewsof the system for which he works .
DOCS\224967v1
EXHIBIT 6
s
UNITED STATES DISTRICT COURTEASTERN DISTRICT OF NIISSOURI
EASTERN DIVISION
IN RE CHARTER COMMUNICATIONS, INC ., )SECURITIES LITIGATION )
STONERIDGE INVESTMENT PARTNERSLLC, Individually and On Behalfof All. Others,Similarly Situated,
Plaintiffs ,
V.
CHARTER COMMUNICATIONS, INC .,et al.,
Defendants .
MDL DOCKET NO. 1506ALL CASES
Consolidated CaseNo, 4:02-CV-1186 CA S
MEMORANDUM AND ORDE R
This consolidated multi-district litigation came before the Court on May 23, 2005 . Lead
Plaintiff; StoneRidge Investment Partners LLC ("StoneRidge") seeks final approval ofthe settlements
("Settlement") reached between it and Charter Communications, Inc . ("Charter" or "Company") ;
certain individual officers and directors of Charter; and Arthur Anderson LLP ("Andersen'),
Charter's outside auditor. The Settlement provides for payment of $146,250,000, consisting of
$66,250,000 in cash (of which $2,250,000 is being paid by Andersen) ; $40,000,000 in Charter
common stock; and $40,000,000 of Charter warrants . Charter and Plaintiff amended the'Stipulation
of Settlement to allow the Company, the option, at its sole discretion, to satisfy its payment obligation
under the Stipulation with cash rather than issuing the Settlement Securities in -amounts up to and
including $80 million on a dollar-for-dollar basis . (Doc. 330.) In addition, Charter has agreed to
Exhibit 6
certain corporate governance reforms intended to avoid the recurrence of the problems that led to
this lawsuit. To effectuate this Settlement, Lead Plaintiff also seeks final certification of the
settlement class ofinvestors in Charter common stock during the'period November 8, 1999 through
August 16, 2002 ("Class Period"). Based on the Court's review of the file, the record and
proceedings herein, and for the reasons stated below, the Court will grant the relief sought by Lead
Plaintiff.
The Court is advised that according to a study by Bloomberg News , the Settlement falls
within the top 25 securities fraud class action settlements of all time . See Supplemental Compendium
("Sapp . Comp."), Ex. 3 and as detailed in the Declaration of Marc I . Gross dated April 14, 2005
("Gross Deci .") . The Court concludes the Settlement is fair, reasonable and adequate, and warrants
approval .
The Court notes in particular, the Settlement was reached by well informed and experience d
counsel who conducted a thorough investigation of the claims, including interviews with over 20
former Charter employees, several defendants, and analysis of several hundred thousand pages of
documents produced by the Company . Gross Decl . ¶j 33-43,71-77 . Negotiations with Charter and
the individual defendants were arms' length and supervised by a retired federal judge experienced in
these matters acting as mediator. The parties met on 7 days over the course of 6 months before
reaching an agreement in principle . Gross Decl, IN 78-88 . Negotiations continued over the precise
terries of the agreement, as Lead Counsel negotiated measures designed to protect the value of the
securities being contributed to the Settlement by Charter . Gross Decl . IT 89-100 .
Lead Plaintiff had the benefit of a restatement of Charter's financial reports and guilty pleas
entered by several Charter officers to charges that they schemed to inflate the Company's customer
2
growth rate. Gross Decl . ( 26-28 . However, there were substantial risks in proving that defendants'
accounting issues were the result of deliberate misconduct rather than negligent mismanagement .
There were similar risks in proving that the customer overcount was material to investors, since
Charter's write-off of a significant number of accounts in February 2002 resulted in its stock price
rising, not falling . Gross Decl. ¶¶ 110-180 .
The Settlement represents upwards of 32% to 93% of Lead PlaintiEs estimate of damages
that likely would have been recovered for those Class Members who are likely to file claims on the
Settlement Fund . Gross Decl . IN 181-97.
There was a significant risk that damages would be limited to the two declines of Charter' s
stock price ($0 .70 per share) that followed disclosures at the end of the Class Period (and not a third
decline following a disclosure regarding lower customer growth rate that occurred 9 months earlier) .
If damages were so limited, the recovery represents over 100% ofthe losses for those Class Members
likely to file claims on the Settlement Fund . Gross Decl.11198,
The Settlement is also remarkable given Charter's precarious financial condition . The
Company has been losing money and bleeding cash, hampered by its $18 billion debt load . Its stock
price has dropped to around $1,50 per share . The insurance policies covering the individual
defendants have been exhausted . Charter's former auditor, settling defendant Andersen, is defunct
and facing billions in claims arising out of its failed audits for other companies . Gross Decl . $1201-
06 .
As set forth below, given these circumstances, this Court believes approval ofthe Settlement
is more than appropriate . In re BankAmerica Corp . Secs . Litig:, 210 F .R.D . 694, 701 (E .D. Mo .
2002) ; In re Wireless Tel . Fed . Cost Recovery Fees Litig. , 396 F .3d 922, 934 (8 ` Cir . 2005) .
3
ti
The Plan of Allocation also warrants approval . The Plan was formulated by Lead Plaintiff
and Lead Counsel based on consultation with a valuation firm that also assisted in analysis of
recoverable damages during settlement negotiations . The Plan factors in Lead Counsel's assessment
ofthe strength ofclaims during several segments ofthe Class Period, and also the amount ofdamages
per share that could be linked to such claims . Such amounts varied during the Class Period as
different aspects of the accounting and overcount schemes commenced, and certain aspects of those
schemes were arguably disclosed to the market .
Pursuant to this Court's Order of Preliminary Approval dated February 15, 2005, over
500,000 notices were mailed to potential Class Members, and Summary Notice was published in The
Wall Street Journal and Business Wire. See Declaration of Michael Rosenbaum, Supp . Comp ., Ex. 1 .
Among other things, the Notice described the background of the case ; the terms of the proposed
Settlement and Plan of Allocation; the hearing scheduled for May 23, 2005 to consider approval of
these matters ; Lead Plaintiffs request for payment of attorneys' fees and expenses; and Class
Members' right to. opt-out, object to or file a claim on Settlement .
I. BACKGROUND
Charter is one of the nation's largest providers of cable services, with over six i-illion
customers . Lead Plaintiff asserted that during the Class Period, the Company inflated its "internal"
customer growth by improperly deferring the termination of a significant number of customers who
had either requested termination, or who were significantly late in their payments . Asa result,
Charter reported industry-leading customer growth rates from marketing efforts (rather than
acquisitions of other cable companies), thus giving the false impression that Charter was successfull y
4
The typical class representative is unlikely to be able to pursue long and protracted litigation at his
or her own expense, particularlywith theknowledge that others similarly situatedwillbe able to "free ride"
on these efforts atno cost or risk to themselves . Furthermore, the significant expense combined with the
highdegree ofuncertainty ofultimate success means that contingencyarrangements arenecessaryto retain
competent counsel . Indeed, lawyers that pursue private suits such as this onbehalf of investors augment
the overburdened SEC by "acting as `private attorneys general . "' Ressler v. Jacobsen, 149 P.RD. 651,
657 (M.D. Fla . 1992) (citation omitted) . Thus, "public policy favors the granting of [attorneys'] fees
sufficient to reward counsel for bringing these actions and to encourage them to bring additional such
actions ." " Id.
6. Objections -
Six objections to the fee request have been filed, including three by state employee pensio n
'funds, the New York State Teachers' Retirement System ("NYS Teachers"), Public Employee
Retirement System of Idaho (' PERSI"), and Pennsylvania Public School Employees' Retirement
System (' PPSERS"). The Court believes the paucity of objections validates the fairness of the fee
request . In evaluating these objections, the Court has considered the constituency of the Class, and
with the possible exception ofthe state employee pension funds, the absence of objections from other
large institutional investors who purchased Charter stock during the Class Period .
This Court notes that other district courts in this Circuit have denied similar objections b y
these same three pension funds in granting a 25% fee from an $84 million settlement in In re Excel
Energy, Inc., 2005 WL 840370 at *2 (D . Minn . April 8, 2005) . The lodestar multiplier in that case
was 4 .7 . As detailed below, many other institutional investors have endorsed fee awards of 20% or
more in comparable cases .
32
The Court Arst notes that NYS Teachers have misstated the fee request . Contrary to its
eomputatior4-the amount requested is not $35 .2 million, but $29 .25 million, of which approximately
55% will be in Charter stock and warrants . NYS Teachers question the efficiency of the litigation .
However, the due diligence discovery program was conducted on an expedited basis and was
concluded 12 weeks after execution of the August 5, 2004 Memorandum of Understanding
"MOU"). It was staffed by associates, except for interviews of defendants and other key Charter
employees . The discovery program served not only to confirm Lead Counsel's assumptions regarding
the evidence regarding the claims being settled--which was an express pre-condition to the
Settlement— but also aided the continued prosecution of claims against the then non-settling
defendants.
By focusing on the attorney time spent on the case, NYS Teachers also ignores what is a
critical focus of any fee determination - the recovery achieved for the Class . As discussed below,
objector's position is contrary to case law in this Circuit . See e .g . , Xcel ; Johnston v.,Comeriod
Mort. Corp., 83 F .3d 241, 245 (8th Cir . 1996) .
There are also three objections to the amount of the fee request from individual shareholders ,
Ann Mitchell, Susan Lockshine, and Rory Valas, all of whom have objected through counsel, Valas
purchased 400 shares of Charter. Valas argues the request for 20% of the settlement fund is
excessive . Valas argues that ifthis percentage was negotiated between class counsel and leadplaintiff
at the inception of the case, then this suggests Stoneridge was a mere figurehead plaintiff. Valas
further argues the case was a low risk securities class action and merits a commensurate fee award .
He cites Inre BristolMyers Squibb Sec. Litig . 2005 U.S.Dist . LEXIS 2917 at 25 n .8 (S .D.N.Y. Feb .
24, 2005), as nearly factually identical, particularly the company's restatement of its financials . He
33
BankAmerica (compensation totaling $130,000 paid to the class representatives) ; U.S . Bancorr~ (8th Cir.
2002) .
Objector Lockshinequestions the $26,625 compensatory award requested by Lead Plaintiff. The
Affidavit of Joseph Stocke shows that the Class clearly benefitted from the time Lead Plaintiff expended
aiding the pursuit ofthese claims . Therequest is in line relative to otherawards . See 2005 U.S. Dist.
LEKIS 6432, at *43, 2005 WL 840370 at * 13 ($100,000 to one lead plaintiff ; In re Dun & Bradstreet
Credit Serv. Cust . Litig. 130 F.R.D. 366, 376 (S .D. Ohio 1990) ($215, 000 to four named plaints) .
m. CONCLUSION
Based on all of the reasons stated above and the entire record herein, the Court will: (1 )
certify the proposed Settlement Class ; (2) deny the objections; (3) approve the Settlement; (4)
approve the Plan of Allocation; and (5) award the requested (a) 20% in fees to plaintiffs' counsel, (b )
$671,734 .64 in expenses and (c) $26,625 Compensatory Award to Lead Plaintiff.
Accordingly,
IT IS HEREBY ORDERED that Lead Plaintiffs motion for Final Approval of the
Settlement and Plan of Allocation is GRANTED . (Doc. 306)
ITIS FURTHERORDERED that Lead Plaintiffs motion for attorneys' fees is GRANTED .
(Doc. 306 .)
42
IT IS FURTHER ORDERED that Lead Plaintffs motion for leave to file in excess ofpag e
limit is GRANTED. (Doc . 319 .)
CHARLES A. SHAWUNITED STATES DISTRICT JUDGE
Dated this 30th day of June, 2005 .
43
EXHIBIT 7
May-i8-05 03 :08ptn Froi-LERACH ET AL 6182304187
r%\O~0 UNITED STATES DIS CT COURTNORTm N DISTRICT OF TES
DALLAS DIVISION
ALLrEN V. SC Ate, On Behalf OfHimself and All Others Similarly Situated;
PLAUMN.
iz TECENOLOG]ES, INC., SA2 JWS. SIDHLT, GRWMY A. BRADY,WIIIL M. BEECHER and,ARTHUR ANDERSE LI,P,
T-358 P .002/010 F-060N010:11MUMIMALUP
FEM-
~9- Tcpfli
c INo 3:01(Consolidated)
CLASS ACTION
DEFENDANTS .
QM"I AM MIA H~W ~
On the lot by of October, 2004, a hearing barring been held before this Court to
detemmiue: (1) whew the terms and conditions of the Stipulation and Agreement of Settles en t
with Certain Defendants dated Miy 7, 20M (the "Sripuiation") are fir, reasonable and adequate
for the patte r of all claims asserted by the Settlement Class and current holds s against the
Settling Defendants in the actions now pm4xg in this Court under the above captions, including
the release of to Settling Defendants and the Released Parties, and abould be appmved; (2)
Whet= j est shams be entered dismissing the actions an the merits and with p indite in
favor of the Settling De£e tents only and as against all persons or entities who are rnexubas of
the Settlement Class herein who have not requested excllusian therefrom; (3) whether to approve
the Plan of Allocation as a fair and reasonable method to allocate the settle tproceeds among
the members of the Segment Class ; and (4) wheffier and in what amount to award P]au ff'
Counsel fees and reimbuzsament of expenses . The Court having considered all matters
submitted to it at the hearing and otherwise; and it appearing that a notice of the hearing
Exhibit 7
may-18-Q 5 03 :08pm From-LERACH ET ALO f-l-4Ju• VU . MVEm IIwl r[IWWOItr 11. WW 6182394187 T-358 P .003/010 F-06 9
w •subvhwti Uy in the farm approved by the Court was =fled to of persons or entities wbo
purchased or otherwise acquired 12 common stack between March A 2000 and Judy 21, 2003,
inclusive (the "Settlement Class Period"), and who were changed thereby (the "S mt
Class"), or were current holders of 12 c o mon stack except those persons or amities excluded
from the defniiion of the S l.emmt Glass, as sbown by the records of M's transfer again at the
respective ad iesses set fa& in such records, and t a sn inaIy notice of the heading
sub~y in the form approved by the Court was published in the national edition of The Wall
Straet .Toni pun=ant to the spedfications of the Court ; and the Court having considered a d
des____ d the fairness and reasonableness of the award of atomeys' fees and wcpenses
requested; and all c apitaXized terms used herein having the meanings as set forth and de find i n
the Stipt on.
IT IS DEMY ORt RED THAT:
1. The Court has jurisdiction over the subject der of the Actin the Lead
Plaintiff , all Seltleme (mss Members and the Set ling Defendants.
2. The Court dds 1 9 for the purposes of to Settlement, the prerequisites f Or a
elm action under Rules 23(a) and (b)(3) of the Feder Rules of Civil Prooedure have been
sa dud in that (a) the member of S ementt Class Members is so nonz us that joinder of alt
members tbexvof is imp~cticabte~ (b) them are questions of law and fact cornru on to the
Settlement Class; (c) the claims aft Class Raprescatative are typical. of the chit of the
Scent Class they seelc to represent (d) the Class Representatives have end will, fairly and
adequately represent the Us musts of the Seulemet Class ; (a) the questions of law end fact
common to the, members of the Settlement Class predominate over any questions affecting only
individual members of the Setttleme Cass ; and (1) it clam action is superior to oilier available
methods for the fair and efcic ad udication of the controversy .
2
Nay-•18-06 US : 08pm From-LERACH ET AL 6102384187 T-368 P . 004/010 F-06 0• toItl'"U4 . uuuuurm rnVdI'i i w m lwrur . . . .._. . ..
3. Pursuant to Rule 23 of the Federal Rules of Civil 1 cedure and #br to pupos S
of dm Settlement this Court hereby finally certifies tit action as a class action on behalf of all
persons or entities who phased or otherwise acquired 32 coumion stock between March A2,
2D00 and July 21, 2003, inclusive„ and who were damaged d =by. Excluded ft= the
Set lease tt Class are the Deftdw in this action, members oftbo immediate f=lies (pa enfs,
spouses, siblings, and children) of each of the Dom, any pion, fi=.v vu.% corporation,
OM=, director or other individual or entity in which anyDdimdM has a con olliug interest or
which is related to or alt iated with any of the Defeaden , and the legal representatives, heirs,
m== in interest or assigns of any such excluded party . Alm excluded from the Settleme
Class are the putative Clan Mambas listed. on &biibit "I" annexed hate, who have excluded
them elves from the S rient Class.
4. Plaintiffs assert claims under Sections 10(b) and 20(a) of the Securities Ex e
Act of 1934 agfust 12 Technologies, Inc. and its present and former officers. Sanjiv S. Sidhc„
Gregory A. Brady and William 1VL. Beeeb er. The Complaint alleges tha Stein Defend nta
made maternally false and misleadi statements ragardvag the d ultim and delays associated
Vft the uuplemeatation and integration of M's software products and about 12°s financial
condition and future earnings. For purposes of the Settlement, the Cow caifies these oleo
for class treatzaent
5. Having wul&wed the fartoss de='bed in Rule 23(g)(1) of the Federal Rules o f
Civil Pn,cadu re, the Court hereby appoints the law s ofMilberg Weiss B=bad & Schubn n
LI.P, Johnson & Pre Mnson anad Girard Gibbs & De Bartolomeo LLP as class counsel and the
law fuze ofStunley, Mandel & Iola, LLP . as Beason counsel for the plaintiffs.
4. Notice of the pendency of this Action as a class action and of the proposed
Settlement was given to ai, Settlement Class Members and those current holders of i2 = ==
3
may-1 n-ua u3 :uvpm Fro -LERACH ET AL 638M4197 i-35a Y .VUO/UU F UauYW 1W WW WV . WWI NI { n.m NI, It n- . .. . . . .
stock wbo could be idon ed with reasonable wort The fm and method of notifying the
Settlement Class oft a pendency of the action as a class action and of the terms and cow itions
of the proposed SaWement met the requurncn#s of Rules 23 and 23 .1 of the Faded des of
Civil Procure, Section 21D(a)(7) of the Socnrities Exchange Act of 1934, 15 U .S.C. lSUr
4(a)C1) as amended by the Private S cities Uitigatron Reform Act of 1995 (' ST . A`), due
process and any other applicable law, constituted the best notice pracdcable umdcr the
ors, and constituted due and suf ci.ent notice to all pons and entities entitled
flumeto.
7. The Settlement is approved as fair, reazunab a and udcqm% and the Settlement
Class Meamber; , c ent holden of i2 common stock and the parties are directed to consummate
the S eme in accordance with the Rena and provisions oftbe Stipulet o n
8. The CompJa iit, which the Court finds was filed on a good faith bay in
accordance with the PSLRA and Rule I1 of the Federal Rules of Civil Prooedurebssed upon all
publicly a available information, is h= by dismissed with prejudice and without costs, except as
provided n the Stipulation, as asdat the Sing Defendants only.
9. Members of the Settlement Class and the success and assigns of any of them,
We hereby pe> eatly barred and a oined from instituting, commencing or prasect ag, either
directly ar is any other capacity, any and all Seed Claims against any and all, of the Released
Parities. ` e1essed Parties" does not include Won-Seftling Defeod~ Arthur Andersen I or
any of its partnat, principals, officerts, d ctors, or employees, its predecessors, successors, and
assigns, and any divisions or coasab , or consti eafts . The Settled Claims are b eby
oomprusnieed, seed, released, discharged and dismissed as agabist the Released Parties as the
merits and with prejudice by virtue of the proceedings herein and this Order and Piual. Iu t
4
May-19-05 03 : 08pm From-LERACH ET AL 6192394187• Ala-En'"Yii . a . •uv'YYiMI In" MIkWWnr T-368 P.006/010 F-060
r* 1 .
1~. The Set ing Defendants and the successors and assigns of any oft em, are herby
pewanently barred and enjoined from institutin& connmecing Or proseca mac day or
in any Dour capacity, any and all Settled Defe nd nts' Claims against any of the Lead Plaint,
Settlement Class Members or diet attorneys. The Steed Duets' Claims of all the
Mewed Patties are hereby compmmise settled relied, discharged and dismissed on the
merits and with prejudice by vkWo of ftproceedings herein and this Order and Final Judgment
it The eased Parties are hereby discharged from, all claims for indoor y an d
coutdbution by any parson or entity, whether arising under state, red l or aotiman law, based
upon, arising out of , rAWng Ia or in comuection with the Scaled Claims of the Settlement Class
or any SettIemit Class Member, other than claims for indemnity asswed aZ*i t a Released
Party by a parson or verity whoso liability to the Settlement Class has been eztingaished pursuant
to the Stipulation of Se ent and th is Order and Final Judgment Acorrlingly, the Court
h =by bars ail claims for indemnity and/or eonin'bu t ion by or agate the Released Parties based `~.•Y
Tzpon, arising out of, relating to or in cozmection with. the Settled Clam of the Sett Class
or any Set]=em Class Member; provided, bows. that this bar order does not prevent any
pion or entity whose liability to the Class has been extinguished pursuant to the Stipulation of
SeWemmit and this Order and Final Judi form asserting a claim for indemnity against a
Released Pariy.
12. New this Order and Find Judgment, the Stipulat 3 u, nor any of its terms and
provisions, nor any of the negotiations ar proceedings c nected with it, nor any of the
documents or statements ref=cd to the shall be:
(a) offered or received against the Settling Defesdeats or against the Lead
Pl ainfiM or the Settlement Class as evida of or construed as or doeraod to be evidence of any
pr sump tion, coneeuion, or admis4sion by any of the Settli Dere idats or by any of the Lead
5
may-19-06 03 :08pm From-LERACH ET AL 6192304167 1-362 P .001/010 F-060~Y 1W YY , ww.wwp m u 1 . .0 mpg ..Fwv .wlr.
Pains or tho SeWeaaer Clays wjth inspect 1D the truth of any fact alleged by Load P11 4M
or the vsiidity of any claim that had been or could bavc been asserteii in the Action or in an y
li ion, or the deficiency of any defense ffid his been or could have been asserted in the
Action or in any Wgation, or of any Iial LIi±y, negligence, fault, or wrongdoing of the Set i x
Iafead ;
(b) offered or rived aphmt the Settling De, louts as evidence of a
Piumpfio concession or aftdo ion. of any fault, ml proton or oniission wit .respect to
any statemact or wdttea doc mz appzoved or made by any Settling nit, or against the
Lead Plaintiffs -and the Se mint Class as evidence of any hERmnity in the claim of bead
1lainti s and the Settleem Class ;
(c) off d or received against the Settling Dahandazst or against the Lead
Plainti 's or the Settlement Class as evidence of a presumption, concession or admission wit h
Pe to any qty= negligence, ft4t or wrongdoing, or in any way Feted to for any other
reason as against any of the parties to the Stipulation, in any other dvt7, cdminal or
eve action or proceeding, otba than such proceedings as may be necess ary to
actuate the provisions of the Stipt> ation; provided, however, that Settling I) oats may
refer to the Stipulationto cff=W* the babilityprotection wanted them thaeundes
(d) construed against the Settling Dcfendanis or the Lead PWndM and th e
Scdkuvmt Class as an admisffian or concession that the consideration to be given bet nder
repres the amo>mt which could be or would have beenreeovered after tial ; or
(e) consfiued as or raved in evidence as as admisdon, concession o r
preaulnption age Lead PIab fs or the Sef ent Class or any of them that any of thei r
claims are without meat or that damages recoverable under the Complaint would not hav e
exceeded the Settlement Fm d.
6
May-•1s-o5 03 :08pm From-LERACH ET AL 6192$94187• tl0"Etl-UD . UU MOr,7 raw-wiT way RMIYY . . . T-$69 p .OD8~O1D F-060
` S .
13. De Plata. of Allocation is moved as fair and reaso lo, and the Claims
.AdmidsWor is directed to admit ster the Stipulation in accordance with its tc and
pzovisirn3L
14. The Court finds that all pa ies and 1 camel have complied with each
r quirametrt of RWe I I aftbe Fede l Rules of Civil Procedure as to all prod perdu .
15. Plate ' Counsel are hereby awarded v- _% d1 of t
Cass Setttemeat Fund in fees, which sum the Court > ds to ba fair and reasonable, and
in rvimbursmeat of expeuscs, which exp enses mallS Of,
be paU to Pis' Co-Lead Counsel from the Settlement Fund with intmest from date such
Settlement Fund was funded to the date ofpayment at the s net rate that the Settlement Fund
earas. The award of attomeys' fm shall be allocated among Pla'atif' Counsel in a fashion
whin , in the opinion of Plaintiffs' Ca-Lead Coaa~a~, mrly compensates Plata ' Cou set for
dwk respective contributions in the prosecution ofthe Action.
16. In making this award of attorneys' fam and reimb rseme of expenses to be paid
from the •Cmss Settlement Fund, the Court has considered and found tha t
(a) the settlement has created a fiend of $84,850,000 .00 in t did is already
an deposit plus inert thereon and that numerous Settlemeat Class Members who file
acceptableproofs of claim will bent from the Settlement created by Plaintils' Course;
(b) i2's adoption of substantial corporate governance reforms proposed and
negptisted by PlaiuM' Course];
(c) A total of 454,417 copies of the Settlement Notice were disseminated to
putative Class Members indicaiia,S that PIdufM' Ca-Lead Counsel were moving far at cv eys'
fees in the amount of up to of thud (33 1/3%) of the Owes Settlement ltd and for
reimbursement of ev=es In an amount of apply $1,500 ,000 and ci ain objections
7
Nay-19-06 03 :09pm From-LERACH ET AL 61823841ST T-358 P . 009/010 F-060• 013 lu-m uu ;vorn rIwwomowiina q4 .I ui
were Med against the teas of the purposed Settl=e t or the maximum fees and e$pcnses
requested. which could be requesfe . by MUM' Counsel contained in the SettieM" Notice
and P1dnti$s' Counsel filed asugpl l bxiefresponding to a such objec ns ;
(d) FIainiffs' Co-Lead. Counsel have conducted the li1igaion and achieve d
the Setdemo with s perseverance and diligent advocacy ;
(e) The action involves complex factual and legal issues and was tvely
prosecuted over #lee yeazs and, in the absence of a settle ent, would involve further lengthy
prbccrdi s with uncertain resolution oft to complac factud and legal muss ;
(1) Had P nit S' Cu-Lead Counsel not achi .ev'od the Seettlemern *=would
remain a slgni giant i that the Settlement Clams may have recovered ess or nothing from th e
SethDe ad~1s;
(g) plaintiffs' Counsel have devoted over 14,800 hours with a lodes Value
of$6,569,655.13, to =Move the SOW=ant; and
(h) T e amounts of attorneyys' fees awarded and mxpruses zrimbursed from the
Settlement Fund are consistent w t awards in similar cases.
17- Exclusive jurisdiet is hereby retained over It parties and the Class A+tembam
for all mars relying to t is Action, including the administration, it pretation, effectuation Or
o orcemark of Stigolatiou and Us Order and k raal Judgment, and including any applicatio n
for fees and expenses incurred in c ction with Adm s'en and distributing the settlement
pracr to the members of the Settles Gass .
18. Without futthc r order of the Court, the parties may agree to reasonable exte ns
oftims to c= y out any ofthe prvisiens of the Stipulation.
8
Nay-10-Q5 03 : O 9pm From-LERACH ET AL 619239418 7FR IIIWIHG Wain T-359 P .fl30/010 F -060
%
19. Thew is no just ar oii for delay in the vatay of t is O dcr andFinaI Judgm=t and
imm&atr entry by the Cif of the Court is expr .y aimed pmmm to We 54 (b) of the
Federal Rules of Civil Procedure .
20. The, Cl of the Court is roc to Dater WSis osier in the rtes of M, of to
above-captianed 40 actions.
0..-day of October, 2OD4SIGNED this /
TAESTATES RWGE
9
EXHIBIT 8
• ORIGINAL •r
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FILED05 AC 20 PHI S 1 6f ii ISTa1CT QF CALL(F aNk
DEPUTY
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF CALIFORNIA
In re TITAN, INC . SECURITIES ) Master File No. 04-CV-0676-LAB(NLS)LITIGATION )
(Consolidated with 04-CV-0701-K(NLS))
This Document Relates To: ) . CLASS ACTION)
ALL ACTIONS. ) ] ORDER AWARDINGATTORNEYS' FEES ANDREIMBURSEMENT OF EXPENSES,INCLUDING LEAD PLAINTIFF'SEXPENSES
DATE : December 19, 2005TIME: 10:30 a .m .COURTROOM : The Honorable
Larry Alan Burns
0
Exhibit 8
r
1 THIS MATTER having come before the Court on December 19, 2005 , on the application of
2 Plaintiffs ' Counsel for an award of a ttorneys ' fees and reimbursement of expenses incurred in the
3 Litigation ; the Court, having considered all papers filed and proceedings conducted herein , having
4 found the settlement of this Litigation to be fair , reasonable and adequate and otherwise being fully4-0
5 informed in the premises and good u appp nan g therefor;
6 IT IS HEREBY ORDERED, ADJUDGED AND DECREED that :
7 1. All of the capitalized terms used herein shall have the same meanings as set forth in
8 the Stipulation of Settlement dated as of July 22, 2005 (the "Stipulation") .
9 2. This Court has jurisdiction over the subject matter of this application and all matters
10 relating thereto, including all Members of the Settlement Class who have not timely and validly
11 requested exclusion.
12 3. TheCourt finds that the percentage fee negotiated with the Lead Plaintiff at the outset
13 of the case enjoys a presumption of reasonableness . The Court further finds that the presumption
14 that a 25% fee award is reasonable has not been rebutted.
15 4. The Court finds that the amount of fees awarded is fair and reasonable under the
16 "percentage-of-recovery" method .
17 5. The Court finds that a fee award of 25% is consistent with awards made in similar
18 cases .
19 6. The Court has considered the objections received from Steven W. Suflas and New
20 York State Teachers' Retirement System . The Court finds these objections to be without merit and
21 hereby overrules all objections concerning payment of attorneys' fees and expenses .
22 7. The Court hereby awards Plaintiffs ' Counsel attorneys ' fees of 25% of the Settlement
23 Fund and reimbursement of expenses in an aggregate amount of $247,549.25 together with the
24 interest earned thereon for the same time period and at the same rate as that earned on the Settlement
25 Fund until paid . Said fees shall be allocated by Plaintiffs' Co-Lead Counsel in a manner which, in
26 'their good -faith judgment, reflects each counsel's cont ribution to the institution, prosecution and
27 resolution of the Litigation .
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8. The awarded attorneys ' fees and expenses , and interest earned thereon , shall be paid
to Plaintiffs ' Co-Lead Counsel from the Settlement Fund immediately after the date this Order is
executed subject to the terms, conditions , and obligations of the Stipulation and in particular ¶6 .2
thereof, which terms, conditions , and obligations are incorporated herein .
9. Pursuant to 15 U .S .C. §78u -4(a)(4), Lead Plaintiff Israel Shurkin is awarded the
amount of $2,050 for reimbursement of time and expenses incurred in representing the Securities
Class .
IT IS SO ORDERED .
DATED: • 12 • ~q•o~ 41*1,4 " 6ww,3---THE HONORABLE LARRY ALAN BURNSUNITED STATES DISTRICT JUDG E
Submitted by:
LERACH COUGHLIN STOIA GELLERRUDMAN & ROBBINS LL P
REED R. KATHREINJAMES W. OLIVER100 Pine Street , Suite 2600San Francisco , CA 94111Telephone : 415/288-45454151288-4534 (fax)
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LERACH COUGHLIN STOIA GELLERRUDMAN & ROBBINS LL P
JOY ANN BULLBRIAN O. O'MARA
VOY ANN BULL
655 West Broadway, Suite 1900San Diego, CA 9210 1Telephone : 619/231-10586 1 9123 1 -7423 (fax)
ROBBINS UMEDA & FINK, LLPBRIAN J . ROBBIN SJEFFREY P. FINKCAROLINE A. SCHNURERSTEVEN R . WEDEKING610 West Ash Street, Suite 1800San Diego , CA 92101Telephone : 6191525-3990619/525-3991 -(fax)
Co-Lead Counsel for Plaintiffs
LABATON SUCHAROW & RUDOFF LLPLAWRENCE A. SUCHARO WIRA A. SCHOCHET100 Park Avenue , 12th FloorNew York, NY 10017-5563Telephone : 2121907-0700212/818-0477 (fax)
PASKOWITZ & ASSOCIATES,LAURENCE D . PASKOWITZ60 East 42nd Street, 46th FloorNew York , NY 10165
1 Telephone : 2121685-0969212/685-2306 (fax)
Counsel for the Holder Class
S:1Settlcment\TilanCorpScc .sct%ORDER FEE 00026697 .doc
0
EXHIBIT 9
IN THE UNTIED STATES DISTRICT COURTFOR THE MIDDLE DISTRICT OF NORTH CAROLINA
In re KRISPY KREME DOUGHNUTS, INCSECURITIES LITIGATION
ORDER AWARDING ATTORNEYS' FEES AND
REIMBURSEMENT OF EXPENSE S
This Document Relates To :
ALL ACTIONS . Master File No. I :04C V 0041 6
Exhibit 9
Case 1 :04-cv-00416-WLO Document 203 Filed 02/15/2007 Paae 1 of 3
THIS MATTER having come before the Court on February 7, 2007, on the application of
Class Lead Counsel for an award of attorneys' fees and reimbursement of expenses incurred i n
the Class Action; the Court, having considered all papers filed and proceedings conducte d
herein, having found the settlement of the Class Action to be fair, reasonable and adequate and
otherwise being fully informed in the premises and good cause appearing therefor;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED that :
1 . All of the capitalized terms used herein shall have the same meanings as set forth
in the Stipulation and Agreement of Class and Derivative Settlement dated as of October 30 ,
2006 ( the "Stipulation" )
2. This Court has jurisdiction over the subject matter of the application and al l
matters relating thereto, including all Members of the Settlement Class who have not timely an d
validly requested exclusion .
3. The Court has reviewed and considered the objections submitted by Dennis P .
McBride and the New York State Teachers' Retirement System . The Court finds the above
objections to be without merit and hereby overrules each of the objections.
4. The Court finds that the amount of fees awarded is fair and reasonable under the
percentage of recovery method and further finds that a fee award of 23 .5% of the Class
Settlement Fund is consistent with awards made in similar cases .
5. The Court hereby awards Class Lead Counsel attorneys' fees of 23 .5% of the
Class Settlement Fund . Said fees shall be paid in cash, stock and warrants in the same
proportions that the aggregate Net Settlement Fund is distributed to Authorized Claimants. The
Court hereby awards reimbursement of expenses in an aggregate amount of $423,244 .81 to be
paid from the cash portion of the Class Settlement Fund . Said fees and expenses shall include
- I -
Case I :04-cv-00416-WLO Document 203 Filed 02/15/2007 Paae 2 of 3
interest earned on the cash portion of the Class Settlement Fund for the same time period and at
the same rate as that earned on the Class Settlement Fund until paid . Said fees shall be allocated
by Class Lead Counsel in a manner which, in their good faith judgment, reflects each counsel's
contribution to the institution, prosecution and resolution of the Class Action .
6 . To the extent available, the awarded attorneys' fees and expenses, and interes t
earned thereon, shall be paid from the Class Settlement Fund immediately after the date thi s
Order is executed subject to the terms, conditions , and obligations of the Stipulation and in
particular $ 6 .2 thereof, which terms, conditions, and obligations are incorporated herein .
IT IS SO ORDERED .
DATED : February 15, 2007IAM L. OSTEEN
UNITED STATES DISTRICT JUDG E
-2-
Case 1 :04-cv-004116-WLO Document 203 Filed 02/15/2007 Page 3 of 3