Opinion
02-CIV-6527-DIC.
November 28, 2005
MEMORANDUM OPINION AND ORDER
Plaintiffs' counsel in this securities class action has petitioned for distribution of the settlement fund. In support of this petition they describe disputes with forty-eight claimants who have sought judicial review of the rejection of their claims by claims administrator The Garden City Group LLC ("GCG") and class counsel. The petition attaches a CD-Rom containing the supporting documentation and written correspondence concerning the forty-eight claimants. A hearing was held on November 23, 2005 to address four of these claims.
Forty-three claimants sold their IPG common stock on or before August 2, 2002. As the class notice ("Notice") explained, class members who sold their shares of IPG common stock on or before August 2, 2002 "will not recover any damages because the value of IPG common stock was inflated during that entire period of time — the first drop in IPG common stock's value which is attributable to the alleged misrepresentations did not occur until after August 2, 2002."
One claim was rejected because the claimant did not suffer a recognized loss. The Plan of Allocation provided that "[a]ll profits will be subtracted from all losses to determine the net recognized loss of each Class member." Using this calculation, the claimant had a profit, not a loss.
Four claimants initially failed to provide sufficient documentation to show that they were entitled to recover. In each case, the GCG explained the deficiencies to the claimants and gave them an opportunity to cure.
The Class was defined to include those who purchased or acquired IPG common stock between October 28, 1997 and October 16, 2002, or acquired shares of IPG common stock in exchange for shares of True North Communication common stock in 2001. For reasons explained in detail in the Notice, if shares of common stock were purchased and acquired between August 5 and October 16, 2002, and were sold on or before October 16, 2002, there was no recognized loss. To recover, such shares had to be retained through the end of trading on October 16, 2002.
Plaintiffs' counsel raised a question as to whether Rudolph Mihelich had provided sufficient documentation to show when he had received his IPG shares in exchange for his True North shares. For the reasons explained at the hearing, his claim is accepted.
Plaintiffs' counsel initially recommended that the claim submitted by David K. Bosses be rejected for his failure to submit sufficient documentation to show that he held IPG common stock at the end of the Class Period. Since notice was given of the November 23 hearing, Mr. Bosses and plaintiffs counsel have reached agreement on the disposition of each component of his claim except for Mr. Bosses' contention that he can recover for shares of restricted stock to which he is entitled in 2007. His claim in this regard is rejected.
Since the notice of the November 23 hearing was served, plaintiffs counsel and Brian J. O'Neil have also reached a resolution of Mr. O'Neil's claim. Plaintiffs' counsel had originally contended that Mr. O'Neil did not submit sufficient evidence of acquisition of shares within the Class Period.
Finally, Carl F. Godfrey Jr. has not provided documentation to allow a calculation of a recognized loss amount that would entitle him to receive a distribution from the settlement fund. For the reasons explained on the record at the hearing, his claim is denied.
Conclusion
The claims submitted by forty-eight claimants, whose names are set forth on the list attached as Exhibit F to the GCG Affidavit in support of this petition for distribution of the settlement fund are rejected, except that the claims of Messrs. Mihelich and O'Neil, and a partial claim presented by Mr. Bosses are accepted.
SO ORDERED.