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awarding an incentive award of $6,600 in a securities class action
Summary of this case from Wong v. Arlo Techs.Opinion
Case No. CV-10-6352 MMM (JCGx)
07-29-2014
IN RE AMERICAN APPAREL, INC. SHAREHOLDER LITIGATION This Document Relates To: All Actions
KESSLER TOPAZ MELTZER & CHECK, LLP Eli R. Greenstein (217945) egreenstein@ktmc.com Stacey M. Kaplan (241989) skaplan@ktmc.com Paul A. Breucop (278807) pbreucop@ktmc.com Ioana A. Brooks (253123) ibrooks@ktmc.com One Sansome Street, Suite 1850 San Francisco, CA 94104 Telephone: (415) 400-3000 Facsimile: (415) 400-3001 Lead Counsel for Lead Plaintiff and the Class SKADDEN, ARPS, SLATE, MEAGHER & FLOM LLP Harriet S. Posner (116097) harriet.posner@skadden.com Peter B. Morrison (230148) peter.morrison@skadden.com Allison B. Holcombe (268198) allison.holcombe@skadden.com 300 South Grand Avenue Los Angeles, California 90071-3144 Telephone: (213) 687-5000 Facsimile: (213) 687-5600 Attorneys for Defendant American Apparel, Inc. O'MELVENY AND MYERS LLP Seth A. Aronson (100153) saronson@omm.com 400 South Hope Street 18th Floor Los Angeles, CA 90071-2899 Telephone: (213) 430-6000 Facsimile: (213) 430-6407 Attorneys for Defendants Dov Charney and Adrian Kowalewski SIMPSON THACHER & BARTLETT LLP Chet A. Kronenberg (222335) ckronenberg@stblaw.com 1999 Avenue of the Stars 29th Floor Los Angeles, CA 90067-4607 Telephone: (310) 407-7500 Facsimile: (310) 407-7502 Attorneys for Defendants Lion Capital LLP and Lion Capital (Americas) Inc.
KESSLER TOPAZ MELTZER
& CHECK, LLP
Eli R. Greenstein (217945)
egreenstein@ktmc.com
Stacey M. Kaplan (241989)
skaplan@ktmc.com
Paul A. Breucop (278807)
pbreucop@ktmc.com
Ioana A. Brooks (253123)
ibrooks@ktmc.com
One Sansome Street, Suite 1850
San Francisco, CA 94104
Telephone: (415) 400-3000
Facsimile: (415) 400-3001
Lead Counsel for Lead Plaintiff and the Class
(Consolidated)
FINAL JUDGMENT
SKADDEN, ARPS, SLATE, MEAGHER
& FLOM LLP
Harriet S. Posner (116097)
harriet.posner@skadden.com
Peter B. Morrison (230148)
peter.morrison@skadden.com
Allison B. Holcombe (268198)
allison.holcombe@skadden.com
300 South Grand Avenue
Los Angeles, California 90071-3144
Telephone: (213) 687-5000
Facsimile: (213) 687-5600
Attorneys for Defendant
American Apparel, Inc.
O'MELVENY AND MYERS LLP
Seth A. Aronson (100153)
saronson@omm.com
400 South Hope Street 18th Floor
Los Angeles, CA 90071-2899
Telephone: (213) 430-6000
Facsimile: (213) 430-6407
Attorneys for Defendants
Dov Charney and Adrian Kowalewski
SIMPSON THACHER
& BARTLETT LLP
Chet A. Kronenberg (222335)
ckronenberg@stblaw.com
1999 Avenue of the Stars 29th Floor
Los Angeles, CA 90067-4607
Telephone: (310) 407-7500
Facsimile: (310) 407-7502
Attorneys for Defendants
Lion Capital LLP and Lion Capital (Americas) Inc.
WHEREAS, a consolidated class action is pending before this Court captioned In re American Apparel, Inc. Shareholder Litigation, Case No. CV-10-6352 MMM (JCGx) (the "Action");
WHEREAS, this matter came before the Court for hearing pursuant to the Order Preliminarily Approving Settlement and Providing for Notice dated April 16, 2014 (the "Preliminary Approval Order"), and on the application of the parties for approval of the settlement set forth in the Stipulation and Agreement of Settlement dated January 17, 2014 (the "Stipulation") entered into by Charles Rendelman (the "Lead Plaintiff"), on behalf of himself and the Class (as defined herein), and defendants American Apparel, Inc. ("American Apparel" or the "Company"), Dov Charney, Adrian Kowalewski, Lion Capital LLP and Lion Capital (Americas) Inc. (collectively, the "Defendants"); and
WHEREAS, due and adequate notice having been given to the Class, pursuant to the Preliminary Approval Order, and the Court having considered all papers filed and proceedings had herein and otherwise being fully informed in the premises and good cause appearing therefore;
IT IS HEREBY ORDERED, ADJUDGED AND DECREED as follows:
1. This Final Judgment (the "Judgment") incorporates by reference the definitions in the Stipulation and all terms used herein shall have the same meanings as set forth in the Stipulation.
2. This Court has jurisdiction over the subject matter of the Action, and over all Parties to the Action, including all members of the Class.
3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby certifies the Action as a class action for purposes of the Settlement. The Class consists of all persons and entities who purchased or otherwise acquired the publicly traded common stock of American Apparel between November 28, 2007 and August 17, 2010, inclusive. Excluded from the Class are Defendants, the directors and officers of American Apparel and their families and affiliates. Also excluded from the Class are all persons and entities who excluded themselves from the Class by timely requesting exclusion in accordance with the requirements of the Notice, a list of which is attached hereto as Exhibit 1.
4. With respect to the Class, this Court finds, solely for the purposes of the Settlement, that the prerequisites for a class action under Rules 23(a) and (b)(3) have been satisfied in that:
(a) members of the Class are so numerous that joinder of all Class Members in the Action is impracticable;
(b) there are questions of law and fact common to the Class;
(c) the claims by Lead Plaintiff, as class representative, are typical of the claims of the Class;
(d) Lead Plaintiff and Lead Counsel have and will fairly and adequately represent and protect the interests of Class Members;
(e) the questions of law and fact common to the members of the Class predominate over any questions affecting only individual members; and
(f) a class action is superior to other available methods for the fair and efficient adjudication of the controversy, considering: (i) the interests of the Class Members in individually controlling the prosecution of separate actions; (ii) the extent and nature of any litigation concerning the controversy already commenced by Class Members; and (iii) the desirability or undesirability of concentrating the litigation of these claims in this particular forum.
5. Pursuant to Rule 23, and solely for the purposes of the Settlement, the Court further finally certifies Lead Plaintiff as class representative for the Class and appoints Lead Counsel as counsel for the Class.
6. The Court hereby finds that notice of the pendency of this Action as a class action and of the proposed Settlement -- including the plan of allocation, the attorneys' fees and expenses sought by Lead Counsel, and the incentive award sought by Lead Plaintiff Charles Rendelmann -- was given to all Class Members who could be identified with reasonable effort. The notification provided for and given to the Class was in compliance with the Preliminary Approval Order, and it constituted the best notice practicable under the circumstances, including individual notice to all Class Members who could be identified through reasonable effort. The distribution of the Notice and the publication of the Summary Notice provided the best notice practicable under the circumstances of those proceedings and of the matters set forth therein, including the proposed Settlement set forth in the Stipulation, to all Persons entitled to such notice, and said notice fully satisfied the requirements of Rule 23; Section 21D(a)(7) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act of 1995, 15 U.S.C. §78u-4(a)(7), the Constitution of the United States, and any other applicable law, and it is further determined that all members of the Class (excluding those Persons listed on Exhibit 1 hereto) are bound by the Judgment herein.
7. Pursuant to Federal Rule of Civil Procedure 23, the Court hereby approves the Settlement set forth in the Stipulation and finds that the Settlement is, in all respects, fair, reasonable, and adequate to Lead Plaintiff and the Class. The Court further finds that the Settlement set forth in the Stipulation is the result of arm's-length negotiations between experienced counsel representing the interests of the Parties and is in the best interest of the Class. The Court further finds that the record is sufficiently developed and complete to have enabled the Parties to have adequately evaluated and considered their positions. Accordingly, the Settlement embodied in the Stipulation is hereby finally approved in all respects. The Parties are hereby directed to perform its terms.
8. The Action and all claims included therein, as well as all of the Settled Claims (defined in the Stipulation and in Paragraph 9(b) below) are dismissed with prejudice as to Lead Plaintiff and the other members of the Class, and as against each and all of the Released Parties (defined in the Stipulation and in Paragraph 9(a) below). The Parties are to bear their own costs, except as otherwise provided in the Stipulation.
9. As used in this Judgment, the terms "Released Parties," "Settled Claims," "Released Parties' Claims," and "Unknown Claims" shall have the meanings as provided in the Stipulation, and specified below:
(a) "Released Parties" means the Defendants and their respective past or present officers, directors, partners, members, parents, subsidiaries, controlling persons, affiliates, employees, agents, attorneys, auditors, underwriters, insurers, representatives, spouses, immediate family members, heirs, predecessors, successors in interest and assigns of the Defendants.
(b) "Settled Claims" means, to the extent allowed by law, all claims and causes of action of every nature and description, whether known or unknown, whether arising under federal, state, common or foreign law, that Lead Plaintiff or any other member of the Class (a) asserted in the Complaint, or (b) could have asserted in any forum that arise out of or are based upon the allegations, transactions, facts, matters or occurrences, representations or omission involved, set forth, or referred to in the Complaint and that relate to the purchase or other acquisition of the publicly-traded common stock of American Apparel during the Class Period. Notwithstanding the foregoing, "Settled Claims" does not include claims asserted in any derivative action or ERISA action based on similar allegations or any claims relating to the enforcement of the Settlement.
(c) "Released Parties' Claims" means, to the extent allowed by law, all claims and causes of action of every nature and description, whether known or unknown, whether arising under federal, state, common or foreign law, that arise out of or relate in any way to the institution, prosecution, or settlement of the claims against the Defendants, except for claims relating to the enforcement of the Settlement.
(d) "Unknown Claims" means any and all Settled Claims that Lead Plaintiff and/or any Class Member does not know or suspect to exist in his, her or its favor as of the Effective Date and any Released Parties' Claims that Defendants or any Released Party does not know or suspect to exist in his, her or its favor as of the Effective Date, which if known by him, her or it might have affected his, her or its decision(s) with respect to the Settlement. With respect to any and all Settled Claims and Released Parties' Claims, the Parties stipulate and agree that upon the Effective Date, Lead Plaintiff and Defendants shall expressly waive, and each Class Member and Released Party shall be deemed to have waived, and by operation of the Judgment shall expressly have waived, any and all provisions, rights and benefits conferred by any law of any state of the United States, or principle of common law or otherwise, which is similar, comparable, or equivalent to California Civil Code §1542, which provides:
A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.The Parties acknowledge, and Class Members and Released Parties by operation of law shall be deemed to have acknowledged, that the inclusion of "Unknown Claims" in the definition of Settled Claims and Released Parties' Claims was separately bargained for and was a key element of the Settlement.
10. Upon the Effective Date of the Settlement, Lead Plaintiff and members of the Class, on behalf of themselves and each of their heirs, executors, administrators, successors and assigns, shall, with respect to each and every Settled Claim, release and forever discharge, and shall forever be enjoined from prosecuting, any Settled Claims against any of the Released Parties, regardless of whether or not such Class Member executed and delivers a Proof of Claim Form.
11. Upon the Effective Date of the Settlement, each of the Released Parties, on behalf of themselves and each of their heirs, executors, administrators, successors and assigns, shall, with respect to each and every Released Parties' Claim, release and forever discharge, and shall forever be enjoined from prosecuting any of the Released Parties' Claims against Lead Plaintiff, and his attorneys, and all other Class Members.
12. The Stipulation and all negotiations, statements, and proceedings in connection therewith shall not, in any event, be construed or deemed to be evidence of an admission or concession on the part of Lead Plaintiff, any Defendant, any member of the Class, or any other Person, of any liability or wrongdoing of any nature by them, or any of them, and shall not be offered or received in evidence in any action or proceeding (except an action to enforce the Stipulation and Settlement contemplated thereby), or be used in any way as an admission, concession, or evidence of any liability or wrongdoing of any nature, and shall not be construed as, or deemed to be evidence of, an admission or concession that Lead Plaintiff, any member of the Class, or any other Person, has or has not suffered any damage.
13. The Court finds that all Parties and their counsel have complied with each requirement of the Private Securities Litigation Reform Act of 1995 and Rule 11 of the Federal Rules of Civil Procedure as to all proceedings herein.
14. Only those Class Members filing valid Claim Forms shall be entitled to participate in the Settlement and to receive a distribution from the Settlement Fund. The Claim Form to be executed by Class Members shall further release all Settled Claims against the Released Parties. All Class Members shall, as of the Effective Date, be bound by the releases set forth herein whether or not they submit a valid and timely Claim Form.
15. No Authorized Claimant shall have any claim against Lead Plaintiff, Lead Counsel, the Claims Administrator, or any other agent designated by Lead Counsel based on the distributions made substantially in accordance with the Settlement and Plan of Allocation as approved by the Court and further orders of the Court. No Authorized Claimant shall have any claim against Defendants, Defendants' Counsel, or any of the Released Parties with respect to the investment or distribution of the Net Settlement Fund, the determination, administration, calculation or payment of claims, the administration of the escrow account, or any losses incurred in connection therewith, the Plan of Allocation, or the giving of notice to Class Members.
16. The Court finds and concludes that the formula for the calculation of the Claims of Claimants as set forth in the Plan of Allocation mailed to Class Members provides a fair and reasonable basis upon which to allocate the proceeds of the Net Settlement Fund among eligible Class Members with due consideration having been given to administrative convenience and necessity. The court therefore finds and concludes that the Plan of Allocation is, in all respects, fair and reasonable to the Class. Accordingly, the Court approves the Plan of Allocation proposed by Lead Plaintiff.
17. Any order modifying the Plan of Allocation set forth in the Notice or Lead Counsel's request for attorneys' fees and reimbursement of Litigation Expenses and/or Lead Plaintiff's request for reimbursement of costs and expenses (including lost wages) in connection with his representation of the Class shall not disturb or affect the finality of this Judgment, the Stipulation or the Settlement contained therein.
18. Without affecting the finality of this Judgment in any way, the Court reserves exclusive and continuing jurisdiction over the Action, Lead Plaintiff, the Class, and the Released Parties for the purposes of: (1) supervising the implementation, enforcement, construction, and interpretation of the Stipulation, the Plan of Allocation, and this Judgment; (2) hearing and determining any request by Lead Counsel for an award of attorneys' fees and reimbursement of Litigation Expenses and/or any request of Lead Plaintiff for reimbursement of costs and expenses (including lost wages) in connection with his representation of the Class; and (3) supervising the distribution of the Settlement Fund.
19. In the event that the Settlement does not become effective in accordance with the terms of the Stipulation or in the event that the Settlement Fund, or any portion thereof, is returned to Defendants, then this Judgment shall be rendered null and void to the extent provided by and in accordance with the Stipulation and shall be vacated and, in such event, all orders entered and releases delivered in connection herewith shall be null and void to the extent provided by and in accordance with the Stipulation.
20. Lead Counsel is awarded attorneys' fees in the amount of $1,200,000.00, which constitutes 25% of the common fund created by the Settlement and which the court finds to be fair and reasonable. Lead Counsel is also awarded reasonable expenses in the amount of $211,305.91. The foregoing attorneys' fees and expenses shall be paid from the Settlement Fund in accordance with the terms of the Stipulation.
21. Lead Plaintiff Charles Rendelman is awarded $6,600.00 from the Settlement Fund as reimbursement for his reasonable costs and expenses directly relating to his representation of the Class.
22. Any appeal or any challenge affecting this Court's approval of regarding any attorneys' fees and expense application shall in no way disturb or affect the finality of this Judgment.
23. The action is hereby dismissed. DATED: July 29, 2014
/s/_________
HON. MARGARET M. MORROW
UNITED STATES DISTRICT JUDGE
EXHIBIT 1
List of Persons Excluded from the Class
1. Stephen G. Fridl
Asheville, NC