Steve Crotteau, et al. v. Addus HomeCare Corporation, et...
Transcript of Steve Crotteau, et al. v. Addus HomeCare Corporation, et...
Case: 1:10-cv-01937 Document #: 75 Filed: 03/21/11 Page 1 of 20 PageID #:446
UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)STEVE CROTTEAU, Individually and on )Behalf of All Others Similarly Situated, )
)Plaintiff, )
)v. ) Civil Action No. 10 C 1937 (VMK)(JC)
)ADDUS HOMECARE CORPORATION, )MARK S. HEANEY, FRANCIS J. )LEONARD, MARK L. FIRST, SIMON A. )BACHLEDA, W. ANDREW WRIGHT, III ) HONORABLE VIRGINIA M.STEVEN I. GERINGER, ROBERT W. ) KENDALLBAIRD & CO. INCORPORATED, )OPPENHEIMER & CO. INC., and )STEPHENS INC., )
)Defendants. )
)
MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF PLAINTIFFS’UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT AND
CONDITIONAL CERTIFICATION OF A CLASS
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TABLE OF CONTENTS
I. PRELIMINARY STATEMENT ii
II. OVERVIEW OF THE LITIGATION 2
III. CONDITIONAL CERTIFICATION OF THE CLASS IS APPROPRIATE 3
A. The Class is Sufficiently Numerous to Warrant Certification 4
B. There Are Substantial Common Questions of Law and Fact 4
C. Plaintiffs’ Claims are Typical of Other Class Members 5
D. Plaintiffs and Lead Counsel Have Adequately Represented the Class 6
E. The Predominance and Superiority Requirements Are Satisfied 6
IV. THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED 7
A. The Role of the Court in Preliminary Approval of a Class ActionSettlement 7
B. The Proposed $3 Million Settlement Is Worthy of Preliminary Approval 9
1. No “Obvious Deficiencies” Preclude Settlement Approval 9
2. The Proposed Settlement was Negotiated by Informed, ExperiencedCounsel Who Were Aware of the Risks of the Litigation 10
3. The Plan of Allocation is Reasonable 11
V. THE PROPOSED FORM AND METHOD OF CLASS NOTICE ARE SUBSTANTIVELYAND PROCEDURALLY ADEQUATE 12
A. The Required Contents of the Notice 12
B. Criteria for Evaluating Class Notices 13
C. The Notice and Summary Notice Provide Sufficient Information for ClassMembers to Evaluate the Proposed Settlement 13
D. The Notice Program Satisfies Due Process Concerns 14
VI. CONCLUSION 15
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TABLE OF AUTHORITES
Cases
ABKCO Music, Inc. v. Harrisongs Music, Ltd.,722 F.2d 988 (2d Cir. 1983) 7
Alliance to End Repression v. City of Chicago,561 F.Supp. 537 (N.D. Ill. 1982) 8
Amchem Products, Inc. v. Windsor,521 U.S. 591 (1997) 5, 6
Authors Guild v. Google, Inc.,No. 05 CV 8136, 2009 WL 4434586 (S.D.N.Y. Dec. 1, 2009) 8
Carson v. Am. Brands, Inc.,450 U.S. 79 (1981) 8
Cohen v. E.F. Hutton & Co.,No. 87-C-5678, 1988 WL 89467 (N.D. Ill. Aug. 22, 1988) 8
De La Fuente v. Stokely-Van Camp, Inc.,713 F.2d 225 (7th Cir. 1983) 5
Dura Pharmaceuticals, Inc. v. Broudo,544 U.S. 336 (2005) 10
Eisen v. Carlisle & Jacquelin,417 U.S. 156 (1974) 15
Gautreaux v. Pierce,690 F.2d 616 (7th Cir. 1982) 7
Goldsmith v. Technology Solutions Co.,No. 92 C 4374, 1995 WL 17009594 (N.D. Ill. Oct. 10, 1995) 9
Hanlon v. Chrysler Corp.,150 F.3d 1011 (9th Cir. 1998) 4
Hardy v. City Optical, Inc.,39 F.3d 765 (7th Cir. 1994) 4
In Re Alloy, Inc., Sec. Litig.,No. 03 Civ. 1597, 2004 WL 2750089 (S.D.N.Y. Dec. 2, 2004) 9
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In re Am. Bank Note Holographics, Inc. Sec. Litig.,127 F. Supp. 2d 418 (S.D.N.Y. 2001) 11
In re Currency Conversion Fee Antitrust Litig.,No. 01 MDL 1409, 2006 WL 3247396 (S.D.N.Y. Nov. 8, 2006) 7
In re Heritage Bond Litig.,No. 02-ML-1475 DT, 2005 WL 1594403 (C.D. Cal. June 10, 2005) 8
In re Mego Fin. Corp. Sec. Litig,213 F.3d 454 (9th Cir. 2000) 9
In re Mexico Money Transfer Litig.,164 F. Supp. 2d 1002 (N.D. Ill. 2000), 4, 6, 8
In re NASDAQ Market-Makers Antitrust Litig.,176 F.R.D. 99 (S.D.N.Y. 1997) 8
In re Prudential Sec. Inc. Ltd. P'ships Litig.,163 F.R.D. 200 (S.D.N.Y. 1995) 7
In re Syncor ERISA Litig.,516 F.3d 1095 (9th Cir. 2008) 7
In re Union Carbide Corp. Consumer Prods. Bus. Sec. Litig.,718 F.Supp. 1099 (S.D.N.Y. 1989) 7
Isby v. Bayh,75 F.3d 1191 (7th Cir. 1996) 8
Keele v. Wesler,149 F.3d 589 (7th Cir. 1998) 5
Mars Steel Corp. v. Cont'l Ill. Nat'l Bank,834 F.2d 677 (7th Cir. 1987) 8
Miller v. Wexler & Wexler,No. 97 C 6593, 1998 WL 60798 (N.D. Ill. Feb. 6, 1998) 4
Oswald v. McGarr,620 F.2d 1190 (7th Cir. 1980) 13
Parker v. Risk Mgmt. Alternatives, Ins.,206 F.R.D. 211 (N.D. Ill. 2002) 4
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Ruiz v. Stewart Assocs., Inc.,171 F.R.D. 238 (N.D. Ill. 1997) 5
Van Horn v. Trickey,840 F.2d 604 (8th Cir. 1987) 8
Williams v. Rohm and Haas Pension Plan,No. 4:04-CV-0078, 2010 WL 1490350 (S.D. Ind. Apr. 12, 2010) 7
Woodward v. NOR-AM Chem. Co.,No. Civ. 94-0780, 1996 WL 1063670 (S.D. Ala. May 23, 1996) 3
Statutes
15 U.S.C. §78u-4(a)(7) 13
15 U.S.C. §78u-4(a)(7)(A) 13
15 U.S.C. §78u-4(a)(7)(B)&(E) 13
15 U.S.C. §78u-4(a)(7)(D) 14
Rules
Fed. R. Civ. P. 23(a)(1)-(4) 4
Fed. R. Civ. P. 23(b)(3) 4, 6
OTHER AUTHORITIES
Manual for Complex Litigation (Third) §30.41 (1995) 8
Manual for Complex Litigation (Fourth) §§ 21.63-21.64 (2004) 12
Manual for Complex Litigation (Fourth) §§ 21.632-21.633 (2004) 3
Manual for Complex Litigation § 1.46 (1981) 7
Newberg on Class Actions § 8.39 (4th ed. 2010) 13
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I. PRELIMINARY STATEMENT
Since filing this action on March 18, 2010, Lead Plaintiff Kermit Stumbo and Plaintiff
Steve Crotteau (collectively, “Plaintiffs”) have efficiently and effectively pursued a favorable
recovery on behalf of a putative Class of persons who purchased shares in Addus HomeCare
Corporation’s (“Addus” or the “Company”) October 2007 initial public offering (“IPO”) or
whose shares are traceable thereto. Plaintiffs, who seek redress for damages stemming from
violations of Sections 11 and 15 of the Securities Act of 1933, allege that Addus made a number
of materially misleading statements in the Registration Statement issued in connection with
Addus’s IPO. The parties’ Stipulation of Settlement (the “Stipulation”), dated March 21, 2011, 1
provides, inter alia, for payment of $3,000,000 to the proposed Class. This substantial sum,
approximately 23% of maximum provable damages, affords Class Members a certain and
immediate measure of redress for the losses they suffered.
The Proposed Settlement was reached after a year of litigation, which included counsel’s
investigation of: Addus’s public filings and comment letters with the Securities and Exchange
Commission (“SEC”), Company press releases, conference calls, analyst and media reports, and
other publicly-available data, including stock trading data and documents produced by the
Department of Veterans Affairs in response to a Freedom of Information Act (“FOIA”) request.
Additionally, former employees of Addus provided information about Defendants’ 2 actions
during the alleged Class Period. Lead Counsel synthesized the information obtained from these
sources to draft the Initial Complaint (D.E. No. 1), the Amended Class Action Complaint (D.E.
1 The Stipulation and exhibits, filed concurrently herewith, are attached as Exhibits 1-6 hereto. All initialcapitalized terms used, but not defined herein, have the same meanings as defined in the Stipulation.2 Defendants herein are Addus, Mark S. Heaney, Francis J. Leonard, Mark L. First, Simon A. Bachleda,W. Andrew Wright, III, Steven I. Geringer, Robert W. Baird & Co. Incorporated, Oppenheimer & Co.Inc., and Stephens Inc. (collectively, “Defendants”).
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No. 30), and the Memorandum of Points and Authorities in Opposition to Defendants’ Motion to
Dismiss the Amended Class Action Complaint (D.E. No. 43).
The Proposed Settlement was achieved following arm’s-length negotiations during a
mediation with the Hon. Nicholas H. Politan (Ret.), and represents a substantial recovery of the
Class’s estimated damages. Although the merits of the case are strong, in light of potential
defenses, the amount of recoverable damages, questions related to loss causation and damages,
the risks of litigating the case through trial, and the significant recovery achieved, the Proposed
Settlement is not only well within the range of reasonableness, but is an excellent result and is in
the best interests of the Class. The Proposed Settlement warrants preliminary approval by this
Court so that notice of the Proposed Settlement can be distributed to members of the Class and a
Hearing can be scheduled to consider final approval of the Proposed Settlement.
II. OVERVIEW OF THE LITIGATION
This case involves the IPO of a decades-old home health care company. Plaintiffs
alleged, inter alia, that the $54 million offering was made pursuant to a Registration Statement
which overstated collectability of accounts receivable from low-income veterans, failed to
identify a steady increase in reserves privately disclosed to the SEC, and prematurely boasted of
the implementation of a centralized billing and collections system. See D.E. No. 30 at ¶¶32-65.
The Litigation was filed as a class action on behalf of purchasers of Addus stock pursuant
or traceable to Addus’s IPO. By Order dated June 1, 2010 (D.E. No. 19), the Court appointed
Kermit Stumbo as Lead Plaintiff, Glancy Binkow & Goldberg LLP as Lead Counsel and
Pomerantz Haudek Block Grossman & Gross as liason counsel. On August 10, 2010, Plaintiffs
filed the Amended Class Action Complaint, asserting claims under §§11 and 15 of the Securities
Act arising from materially misleading statements in Addus’s IPO Registration Statement.
On September 20, 2010, Defendants moved to dismiss the Complaint for failure to state a
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claim. (D.E. No. 37). Plaintiffs opposed the motion. (D.E. No. 43). Thereafter, the parties
conferred regarding the possibility of settlement. Pursuant to a stipulation, on October 20, 2010,
the Court stayed the Litigation to allow the parties to complete mediation. (D.E. No. 52). On
November 17, 2010, the parties attended a mediation session under the direction of Hon.
Nicholas H. Politan (Ret.). With Judge Politan’s assistance, the parties were able to agree to the
material terms of a settlement. Thereafter, the parties drafted a Stipulation of Settlement.
Plaintiffs believe that the claims asserted in this Litigation are meritorious and that
additional evidence in support the claims would be obtained in discovery. Nevertheless, Plaintiffs
recognize the inherent problems of proof and possible defenses that could be raised. Plaintiffs
also have taken into account the risks associated with trying a complex action to a jury. For their
part, Defendants have denied (and continue to deny) all charges of wrongdoing and contest
liability and damages. Nonetheless, they have concluded that further conduct of the Litigation
would be uncertain, protracted and expensive, and that it is desirable that the Litigation be fully
and finally settled in the manner and upon the terms and conditions set forth in the Stipulation.
III. CONDITIONAL CERTIFICATION OF THE CLASS IS APPROPRIATE
A class may be certified for purposes of settlement when a settlement agreement is
reached before a determination of class certification has been made. See MANUAL FOR COMPLEX
LITIGATION (“MCL”) (FOURTH) §§ 21.632-21.633 (2004); Cohen v. E.F. Hutton & Co., No. 87-
C-5678, 1988 WL 89467 at *3 (N.D. Ill. Aug. 22, 1988). In fact, “[c]ertification of settlement
classes after a settlement has been reached has become routine.” Woodward v. NOR-AM Chem.
Co., No. Civ. 94-0780, 1996 WL 1063670, at *14 (S.D. Ala. May 23, 1996). Where a class
action is settled prior to certification, a court is authorized to conditionally certify a settlement
class for the purpose of providing notice to putative members of the proposed class of the terms
of the anticipated settlement and of their opportunity to opt out and/or object. Id.
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To certify a class action under Rule 23(a), the Court must find that: “(1) the class is so
numerous that joinder of all members is impracticable; (2) there are questions of law or fact
common to the class; (3) the claims or defenses of the representative parties are typical of the
claims or defenses of the class; and (4) the representative parties will fairly and adequately
protect the interest of the class.” Fed. R. Civ. P. 23(a)(1)-(4); see In re Mexico Money Transfer
Litig., 164 F. Supp. 2d 1002, 1012-1013 (N.D. Ill. 2000), aff’d, 267 F.3d 743 (7th Cir. 2001)
(“Mexico Money”). Under Rule 23(b), the Court must also find that “the questions of law or fact
common to the members of the class predominate” over individual issues of law or fact,3 and “a
class action is superior to other available methods for fairly and efficiently adjudicating the
controversy.” Fed. R. Civ. P. 23(b)(3); see Hardy v. City Optical, Inc., 39 F.3d 765, 771 (7th Cir.
1994). Whereas each requirement is satisfied, certification of a settlement class is proper.
A. The Class is Sufficiently Numerous to Warrant Certification
Rule 23(a)(1) requires the class to be so large that joinder of all members is
impracticable. The proposed Settlement Class includes over 70 members. 4 A group this large is
too large to join in a single action. See Mexico Money, 164 F. Supp. 2d at 1012; Parker v. Risk
Mgmt. Alternatives, Ins., 206 F.R.D. 211, 212 (N.D. Ill. 2002) (certifying class with 39
members); Miller v. Wexler & Wexler, No. 97 C 6593, 1998 WL 60798 (N.D. Ill. Feb. 6,
1998)(citing cases certifying classes of 40 or fewer).
B. There Are Substantial Common Questions of Law and Fact
A proposed Settlement Class has sufficient commonality to justify certification where
3 “All questions of fact and law need not be common to satisfy this rule.” Hanlon v. Chrysler Corp., 150F.3d 1011, 1019 (9th Cir. 1998).
4 Addus’s 2009 Form 10-K, filed with the SEC on March 29, 2010, states that “As of March 24, 2010,there were 77 holders of record of [Addus’s] common stock.” Form 10-K at 31. Because most investors’shares are held by their brokers in street name, the actual number of investors is multiples of that figure.
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there are substantial questions of law and fact common to the Class. See Keele v. Wesler, 149
F.3d 589, 594 (7th Cir. 1998) (citing Amchem Products, Inc. v. Windsor, 521 U.S. 591 (1997)).
Here, such common questions include: whether the provisions of the Securities Act were violated
by Defendants as alleged by Plaintiffs; whether Addus’s Registration Statement misrepresented
material facts about the Company and its business; and, whether the disclosure of Defendants’
alleged misrepresentations resulted in a decline in the price of Addus’s shares. In the context of
a Settlement Class, additional common questions include whether the Proposed Settlement is
fair, reasonable and adequate and, thus, should be approved.
C. Plaintiffs’ Claims are Typical of Other Class Members
Rule 23(a)(3)’s typicality test is satisfied if the named plaintiff’s claims “arise[ ] from the
same event ... that gives rise to the claims of other class members and ... are based on the same
legal theory.” De La Fuente v. Stokely-Van Camp, Inc., 713 F.2d 225, 232 (7th Cir. 1983). 5
Here, Plaintiffs’ claims are typical of the claims of the Class. Like other Settlement Class
members, Plaintiffs purchased Addus common stock during the Class Period, at a time when
Defendants’ alleged misrepresentations had not been disclosed and Addus’s stock price was
artificially inflated. Plaintiffs allege that disclosure of the alleged misrepresentations caused the
decline in value of the securities they – and other Class Members – purchased. Similarly,
defenses relating to the sufficiency of disclosure and alternative reasons for Addus’s share price
declines apply to both Plaintiffs and the Class. Finally, the interests of Plaintiffs in obtaining a
fair, reasonable, and adequate settlement of the claims asserted are identical to the interests of the
remaining Class Members, since under the proposed Plan of Allocation, Plaintiffs will receive
the same pro rata share of the Settlement Fund as the rest of the Settlement Class.
5 See also Ruiz v. Stewart Assocs., Inc. 171 F.R.D. 238, 242 (N.D. Ill. 1997) (typicality is satisfied ifclaims of class members are “substantially similar”).
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D. Plaintiffs and Lead Counsel Have Adequately Represented the Class
The adequacy of representation inquiry examines the vigor with which Plaintiffs and Lead
Counsel have prosecuted the litigation. Mexico Money, 164 F. Supp. 2d at 1013. Plaintiffs are
represented by highly-qualified counsel with extensive experience in the prosecution of securities
class actions. See Declaration of Peter A. Binkow (“Binkow Decl.”), Ex. 7. Over the past year,
Plaintiffs and Lead Counsel have prosecuted this Litigation, negotiated with Defendants, and have
obtained a Proposed Settlement representing a significant percentage of the losses allegedly
suffered by putative Class Members. Pursuant to the proposed Plan of Allocation, the estimated
average recovery per share is $0.55. 6 Plaintiffs have fairly and adequately protected and
advanced the interests of the Settlement Class; the requirements of Rule 23(a)(4) are met.
E. The Predominance and Superiority Requirements Are Satisfied
Under Rule 23(b)(3), a class may be certified if a court finds that common questions of
law or fact predominate over individual questions, and that a class action is superior to other
available methods for the fair and efficient adjudication of the controversy. Here, the proposed
Settlement Class satisfies the requirements of Rule 23(b) in that, as described above, the questions
of law or fact common to the members of the Settlement Class clearly predominate over any
questions affecting individual members. Moreover, while members of the Settlement Class
suffered damages, the individual damages amounts are not large enough to economically justify
the prosecution of separate actions against Defendants. 7 Accordingly, a class action is superior to
other available methods for the fair and efficient adjudication of the controversy.
6 Plaintiffs’ damages expert calculated the average recovery per share based upon an assessment that anestimated 5.43 million shares were damaged. Estimated recovery per share does not take into accountdeductions for Court-approved fees and expenses or the costs of notice and claims administration.
7 See, e.g., Amchem Products, 521 U.S. at 617 (“When adjudication is costly and individual claims are nomore than modest in size, class proceedings may be ‘the thing,’ i.e., without them, potential claimants willhave little, if any, incentive to seek vindication of their rights”).
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IV. THE SETTLEMENT SHOULD BE PRELIMINARILY APPROVED
As a matter of public policy, courts favor the voluntary settlements of disputes. See
ABKCO Music, Inc. v. Harrisongs Music, Ltd., 722 F.2d 988, 998 (2d Cir. 1983); In re Syncor
ERISA Litig., 516 F.3d 1095, 1101 (9th Cir. 2008). This is particularly true in complex class
actions, where “courts have long recognized that such litigation ‘is notably difficult and
notoriously uncertain,’ and that compromise is particularly appropriate.” In re Union Carbide
Corp. Consumer Prods. Bus. Sec. Litig., 718 F.Supp. 1099, 1103 (S.D.N.Y. 1989) (citations
omitted). As set forth below, the Proposed Settlement is a proper compromise of the Litigation.
A. The Role of the Court in Preliminary Approval of a Class Action Settlement
Rule 23(e) requires judicial approval for a settlement of claims brought on a class basis:
The first step in district court review of a class action settlement is a preliminary,pre-notification hearing to determine whether the proposed settlement is ‘withinthe range of possible approval.’ Its purpose is to ascertain whether there is anyreason to notify the class members of the proposed settlement and to proceed witha fairness hearing. Manual for Complex Litigation §1.46, at 53-55 (West 1981).
Gautreaux v. Pierce, 690 F.2d 616, 621 n.3 (7th Cir. 1982). 8 At this stage, because substantive
rights are not being adjudicated, the court must only make “‘a preliminary evaluation’ as to
whether the settlement is fair, reasonable and adequate.” In re Currency Conversion Fee
Antitrust Litig., No. 01 MDL 1409, 2006 WL 3247396, at *5 (S.D.N.Y. Nov. 8, 2006).
The central inquiry is whether the Proposed Settlement is “reasonable when compared to
the likely results of litigation... ‘in any case, there is a range of reasonableness with respect to a
settlement.’” Union Carbide, 718 F.Supp. at 1103. “If the preliminary evaluation of the
proposed settlement does not disclose grounds to doubt its fairness or other obvious
8 See also Williams v. Rohm and Haas Pension Plan, No. 4:04-CV-0078, 2010 WL 1490350, at *1 (S.D.Ind. Apr. 12, 2010) (court must determine whether the proposed settlement is “in the range of possibleapproval”); In re Prudential Sec. Inc. Ltd. P’ships Litig., 163 F.R.D. 200, 210 (S.D.N.Y. 1995) (same).
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deficiencies,” the Court should direct notice to be issued and schedule a final approval hearing.
MCL (THIRD) §30.41 (1995). Generally, “[w]here the proposed settlement appears to be the
product of serious, informed, non-collusive negotiations, has no obvious deficiencies, does not
improperly grant preferential treatment to class representatives or segments of the class and falls
within the range of approval, preliminary approval is granted.” See In re NASDAQ Market-
Makers Antitrust Litig., 176 F.R.D. 99, 102 (S.D.N.Y. 1997) (citation omitted).
In reviewing a proposed class settlement, a court should “not decide the merits of the case
or resolve unsettled legal questions.” Carson v. Am. Brands, Inc., 450 U.S. 79, 88 n.14 (1981);
see also Mars Steel Corp. v. Cont’l Ill. Nat’l Bank, 834 F.2d 677, 684 (7th Cir. 1987) (“The
temptation to convert a settlement hearing into a full trial on the merits must be resisted”). 9
Because the object of settlement is to avoid, not confront, the determination of contested issues,
the approval process should not be converted into an abbreviated trial on the merits. Van Horn v.
Trickey, 840 F.2d 604, 607 (8th Cir. 1987). Nor should “[j]udges ... substitute their own
judgment as to the optimal settlement terms for the judgment of litigants and their counsel.”
Alliance to End Repression v. City of Chicago, 561 F.Supp. 537, 548 (N.D. Ill. 1982).
The opinion of experienced counsel in support of the proposed settlement is entitled to
great weight. See Isby v. Bayh, 75 F.3d 1191, 1200 (7th Cir. 1996); Mexico Money, 164 F. Supp.
2d at 1020 (placing “significant weight on the unanimously strong endorsement of these
settlements by ... well-respected attorneys”); In re Heritage Bond Litig., No. 02-ML-1475 DT,
2005 WL 1594403, at *2 (C.D. Cal. June 10, 2005) (so holding in case where Lead Counsel
herein served as one of class counsel). Furthermore, courts have consistently recognized that
9 At this stage, “a full fairness analysis is neither feasible nor appropriate.” Authors Guild v. Google, Inc.,
No. 05 CV 8136, 2009 WL 4434586, at *1 (S.D.N.Y. Dec. 1, 2009) (the settlement will be consideredafter class members “have had the opportunity to make their views known”). Here, Class Members willhave the opportunity to object to the Settlement or to opt out before the Court rules upon final approval.
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“the complexity, expense and likely duration of further litigation” – factors carefully considered
by counsel before entering into and endorsing the Settlement – are critical to an evaluation of the
reasonableness of a settlement, especially in a securities class action. 10
B. The Proposed $3 Million Settlement Is Worthy of Preliminary Approval
Under the terms of the Stipulation, Defendants will pay a total of $3 million in cash for
the benefit of the Settlement Class, which constitutes approximately 23% of Plaintiffs’ maximum
estimated damages. Just a year after Class Members suffered a huge drop in the value of their
common stock, the Proposed Settlement plainly constitutes a significant and timely recovery, and
is well within the range of fairness required for preliminary approval. Whereas the Proposed
Settlement has no obvious defects and is the result of arm’s-length negotiations, the Court should
concur with the judgment of the parties and counsel that it is worthy of submission to the Class.
1. No “Obvious Deficiencies” Preclude Settlement Approval
To assess facial validity, a court inquires whether a proposed settlement was reached at
arm’s-length. Concerns regarding deficiencies are typically grounded in evidence showing a
previous relationship between the parties, outrageous attorneys’ fees, or a class that is sold short
or is bitterly divided by competing interests. No such circumstances exist here. 1 1
The Settlement Agreement provides for payment, on a pro rata basis, of the Net
Settlement Fund to all members of the Class who timely submit a Proof of Claim (“Authorized
Claimants”), with no special treatment for Plaintiffs. The proposed Plan of Allocation (“POA”),
set forth in the Notice of Proposed Settlement (Ex. A-1 to the Settlement, attached hereto as Ex.
10 See, e.g., Goldsmith v. Technology Solutions Co., No. 92 C 4374, 1995 WL 17009594, at *4-*5 (N.D.Ill. Oct. 10, 1995) (in light of the “vigorous, determined and resourceful opposition of multiple defendants.... a dollar obtained in settlement today is worth more than a dollar obtained after a trial and appeal yearslater”); In Re Alloy, Inc., Sec. Litig., No. 03 Civ. 1597, 2004 WL 2750089, at *2 (S.D.N.Y. Dec. 2, 2004).11 There was no collusion among the parties, as all negotiations were adversarial and held at arm’s-lengthbefore a mediator. See, e.g., In re Mego Fin. Corp. Sec. Litig, 213 F.3d 454, 458 (9th Cir. 2000).
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3 at pp. 18-19), provides a formula for calculating a Class Member’s Recognized Claim based
upon the timing of its purchase and sale transactions. 12 This is not a claims-made settlement; any
unclaimed monies in the Net Settlement Fund will be distributed in an equitable fashion to
Authorized Claimants who filed timely claims. Moreover, the Proposed Settlement does not
seek excessive compensation for Plaintiffs’ counsel, who have undertaken prosecution of the
Litigation without compensation and who have advanced the costs of litigation. Instead, it
provides that a request for reasonable attorneys’ fees will be subject to approval by the Court. 13
Not only are there no obvious deficiencies in the terms of the Settlement, but if the Court
grants preliminary approval, the Notice will be disseminated to Class Members informing them
of: (a) the terms of the Proposed Settlement; (b) Lead Counsel’s application for attorneys’ fees
and reimbursement of expenses; and (c) Class Members’ right to object to the Proposed
Settlement and any of its terms, the proposed Plan of Allocation, and/or counsel’s request for an
award of attorneys’ fees and expenses. Thus, any deficiency not apparent on the face of the
Settlement can be brought to the Court’s attention prior to final approval.
2. The Proposed Settlement was Negotiated by Informed, ExperiencedCounsel Who Were Aware of the Risks of the Litigation
Counsel for Plaintiffs and Defendants have extensive experience in securities litigation.
They reached a settlement only after arm's-length negotiations and before a neutral mediator.
Throughout the course of the Litigation and settlement negotiations, the respective parties took
into account the strengths and weaknesses of the case, the risks of further litigation, the likely
12 The Plan of Allocation prepared by Plaintiffs’ independent damages expert is based on a damagesmodel consistent with both the ruling in Dura Pharmaceuticals, Inc. v. Broudo, 544 U.S. 336 (2005), andthe requirements of the Private Securities Litigation Reform Act of 1995 (“PSLRA”).13 Lead Counsel will submit a Fee and Expense Application for distributions from the Settlement Fund ofan award of attorneys’ fees (no greater than 25% of the Gross Settlement Fund) and expenses, theapproval of which is separate from the approval of the Proposed Settlement.
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recovery at trial, and the risk of appeals if the case went to trial. Plaintiffs and Lead Counsel
believe that they have conducted a thorough investigation of the claims asserted in the Litigation
(see p. 2, supra). The Parties also exchanged confidential mediation briefs. Thus, the Proposed
Settlement was entered into only after Plaintiffs and Lead Counsel had conducted a detailed
analysis of the legal and factual issues and the risks associated with continued litigation.
Because this Litigation is subject to the provisions of the PSLRA, which makes it more
difficult for investors to successfully prosecute securities class actions, Plaintiffs faced not only
the general risks of any litigation, but also the risks that Plaintiffs’ claims might not survive
Defendants’ motion to dismiss, summary judgment attacks, or defenses asserted at trial. While
Plaintiffs believe they would have ultimately prevailed, they recognize that the difficulty of
establishing liability at trial is significant. Moreover, Defendants could appeal any judgment
rendered in favor of the Class. The continued prosecution of the action would be complex,
expensive, and lengthy, with a more favorable outcome highly uncertain. The Proposed
Settlement eliminates the risk that Plaintiffs and the Class could receive no recovery.
In sum, Plaintiffs were armed with sufficient information about the underlying facts and
the strengths and weaknesses of the case to make an educated and intelligent appraisal of the
Proposed Settlement. The Proposed Settlement achieves a recovery of $3,000,000, which
represents a significant percentage of the Class's estimated likely damages.
3. The Plan of Allocation is Reasonable
"An allocation formula need only have a reasonable, rational basis [to warrant approval],
particularly if recommended by 'experienced and competent' class counsel." In re Am. Bank Note
Holographics, Inc. Sec. Litig., 127 F. Supp. 2d 418, 429-30 (S.D.N.Y. 2001). Here, the Plan of
Allocation for distributing the Net Settlement Fund is described at length in the Notice, and is fair
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and reasonable. The proposed Plan of Allocation is based on Plaintiffs’ theory of the case and
reflects the contention that the price of Addus’s common stock was artificially inflated due to
allegedly misleading statements made in Addus’s Registration Statement. It was devised with the
assistance of a damages expert and takes into account the requirements of the PSLRA.
Whether a member of the Class has sustained a loss that will entitle the Class Member to a
recovery from the Settlement Fund will depend upon the calculation of a "recognized loss" for
that member. The calculation of the "recognized loss" will, in turn, depend on several factors,
including (a) when each Class Member purchased its shares of Addus, and (b) whether the Class
Member sold such shares during or after the Class Period and, if so, when. There is no reason to
doubt the fairness of the proposed Plan of Allocation for purposes of preliminary approval.
In light of the above considerations, the Proposed Settlement as a whole falls within the
range of possible approval. The Court should, therefore, grant preliminary approval of the
proposed Settlement and direct that notice of the proposed Settlement be given to Class Members.
V. THE PROPOSED FORM AND METHOD OF CLASS NOTICE ARESUBSTANTIVELY AND PROCEDURALLY ADEQUATE
A. The Required Contents of the Notice
The MCL (FOURTH) §§ 21.63-21.64 (2004) explains that a class action settlement notice
should “announce the terms of a proposed settlement and state that, if approved, it will bind all
class members.” Id. at §21.312. The notice should also describe the key terms of the settlement,
provide information regarding the requested attorneys’ fees and expenses, set forth the time and
place of the final approval hearing, describe the procedures for objecting to and opting out of the
settlement, provide the address and telephone number of the plaintiffs’ counsel, and explain how
to make inquiries regarding the settlement. Id. The PSLRA additionally requires the notice to
state: “[t]he amount of the settlement proposed to be distributed to the parties to the action,
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determined in the aggregate and on an average per share basis”; “[i]f the parties do not agree on
the average amount of damages per share that would be recoverable... a statement from each
settling party concerning the issue or issues on which the parties disagree”; and “[a] brief
statement explaining the reasons why the parties are proposing the settlement.” 15 U.S.C. §78u-
4(a)(7). The notice must also have a cover page summarizing the above information. See id.
B. Criteria for Evaluating Class Notices
“Clarity and objectivity are of primary importance in describing the key elements in the
proceedings so that recipient class members have sufficient information to make intelligent
decisions.” 3 H. NEWBERG, ET AL., NEWBERG ON CLASS ACTIONS §8.39 (4th ed. 2010); see also
Oswald v. McGarr, 620 F.2d 1190, 1197 (7th Cir. 1980) (notice should describe the proceedings
and terms and conditions of the Settlement in an informative and coherent manner).
C. The Notice and Summary Notice Provide Sufficient Information for ClassMembers to Evaluate the Proposed Settlement
Consistent with these applicable laws and the recommendations, the Notice provides:
• A cover page summarizing the information contained in the Notice, including thetime, date and location of the Settlement Hearing. 15 U.S.C. §78u-4(a)(7); SeeNotice: cover page, Ex. 3 at p. 4;
• The amount of the settlement in the aggregate and, on a per share basis,statement of plaintiff recovery and the Plan of Allocation by which ClassMembers can determine the value of their claims. 15 U.S.C. §78u-4(a)(7)(A);See Notice: cover page, and Responses to Question 8, 9, and “UnderstandingYour Payment”, Ex. 3 at pp. 10-11, 18-19;
• Because the parties do not agree on per share damages, a statement from eachconcerning the issues on which the parties disagree, including the factors whichPlaintiffs and Defendants considered in reaching the Settlement, and a statementof the potential outcome of the case, including Lead Counsel’s recommendationconcerning the merits of the Settlement and the risks of further litigation. 15U.S.C. §78u-4(a)(7)(B)&(E); see Notice: “Reasons for Settlement,” “If the CaseHad Not Settled” and Response to Question 4, Ex. 3 at pp. 2-3, 9;
• A statement of attorneys’ fees and reimbursement of expenses sought. 15 U.S.C.
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§78u-4(a)(7); See Notice: “Attorneys’ Fees and Expenses”, and Response toQuestion 17, Ex. 3 at pp. 4, 13-14;
• Contact information for the Claims Administrator and Lead Counsel (names,addresses, telephone numbers and websites). 15 U.S.C. §78u-4(a)(7)(D); SeeNotice: “More Information” and Response to Question 23, Ex. 3 at pp. 5, 17-18;
• The Class definition. See Notice: “Security and Time Period” and Responses toQuestions 5-7, Ex. 3 at pp. 2, 9-10;
• Actions which need to be taken to be included in the Class and make a claim,and/or to object to the terms of the Settlement. See Notice: “Deadlines”, “YourLegal Rights And Options In This Settlement”, and Responses to Question 10,18, and 21, Ex. 3 at pp. 4-6, 11, 14-18; and
• Actions which need to be taken to be excluded from the Class and theSettlement. See Notice: “Deadlines”, “Your Legal Rights And Options In ThisSettlement”, and Responses to Question 13-15, Ex. 3 at pp. 4-6, 12-13.
The Notice conforms to the “Plain English” format recommended by the Federal Judicial
Center and includes a table of contents to assist Class Members to more easily locate particular
information. The Summary Notice, attached hereto as Ex. 5 (Ex. A-3 to the Stipulation)), alerts
Class Members to the Proposed Settlement and states how to obtain the more detailed Notice.
D. The Notice Program Satisfies Due Process Concerns
If approved by the Court, the Notice and the Proof of Claim, substantially in the form of
Exs. A-1 and A-2 to the Stipulation, respectively, will be sent by first-class mail to each Class
Member identified from Addus’s transfer records, as well as to brokerage firms and others who
regularly act as nominees for beneficial purchasers of stock. In addition to the direct mailing
notice program, the proposed Notice Order also provides for a publication of the Summary
Notice, substantially in the form of Ex. A-3 to the Stipulation, in Investors Business Daily and
Globe Newswire, 14 on separate days on or before 30 days after the Court grants preliminary
14 Individual mailings and placement of notice in two financial publications are designed to protect thedue process rights of Class Members to receive notice of the proposed settlement so that they may object
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settlement approval. See Ex. 2, proposed Notice Order, at ¶ 7(b). 15 This notice program will
provide the best notice practicable and complies with both Rule 23 and the PSLRA. Therefore, it
constitutes due and sufficient notice to all persons entitled thereto. 16
VI. CONCLUSION
For the foregoing reasons, Plaintiffs respectfully request that the Court preliminarily
approve the Proposed Settlement and enter the Notice Order submitted herewith.
Dated: March 21, 2011 GLANCY BINKOW & GOLDBERG LLP
By: s/ Peter A. Binkow Peter A. Binkow (pro hac vice)Robin Bronzaft Howald (pro hac vice)Robert V. Prongay (pro hac vice)Coby M. Turner (pro hac vice)1801 Avenue of the Stars, Suite 311Los Angeles, California 90067Telephone: (310) 201-9150Facsimile: (310) 201-9160
Lead Counsel for Plaintiffs
POMERANTZ HAUDEK BLOCKGROSSMAN & GROSS LLPPatrick V. Dahlstrom1 North LaSalle Street, Suite 2225Chicago, Illinois 60602Telephone: (312) 377-1181Facsimile: (312) 377-1184
Liaison Counsel for Plaintiffs
or opt out and pursue their own claims. Eisen v. Carlisle & Jacquelin, 417 U.S. 156, 173-75 (1974).15 The proposed Claims Administrator, the Garden City Group, Inc., has extensive experience inperforming these tasks so as to maximize Class Member awareness of the pending Settlement.16 Attached hereto as Ex. 8 is a recommended schedule of the various dates provided for in the proposedNotice Order that was negotiated by the parties. Plaintiffs propose setting the Settlement Hearing to beheld one hundred (100) days after the granting of preliminary approval.
15
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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEVE CROTTEAU, Individually and onBehalf of All Others Similarly Situated,
Plaintiff,
v. Civil Action No. 10 C 1937 (VMK)(JC)
ADDUS HOMECARE CORPORATION,MARK S. HEANEY, FRANCIS J. The Honorable Virginia M. KendallLEONARD, MARK L. FIRST, SIMON A.BACHLEDA, W. ANDREW WRIGHT, III,STEVEN I. GERINGER, ROBERT W.BAIRD & CO. INCORPORATED,OPPENHEIMER & CO. INC., andSTEPHENS INC.,
Defendants.
STIPULATION OF SETTLEMENT
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This Stipulation of Settlement dated as of March 21, 2011 (the “Stipulation”), is made
and entered into by and among the following Settling Parties to the above-entitled Litigation: (i)
Lead Plaintiff Kermit Stumbo (“Lead Plaintiff”) and Plaintiff Steve Crotteau (collectively,
“Plaintiffs”) (on behalf of themselves and each of the Settlement Class Members), by and
through their counsel of record in the Litigation; and (ii) Addus HomeCare Corporation
(“Addus”), Mark S. Heaney, Francis J. Leonard, Mark L. First, Simon A. Bachleda, W. Andrew
Wright, III, Steven I. Geringer, Robert W. Baird & Co. Incorporated, Oppenheimer & Co. Inc.,
and Stephens Inc. (collectively, “Defendants”), by and through their counsel of record in the
Litigation. Subject to the approval of the Court, the Stipulation is intended by the Settling
Parties to fully, finally, and forever resolve, discharge, and settle the Litigation and Released
Claims, upon and subject to the terms and conditions hereof.
I. THE LITIGATION
On March 18, 2010, this Litigation was filed as a class action on behalf of purchasers of
Addus common stock pursuant or traceable to the Company’s October 27, 2009 Initial Public
Offering (“IPO”). By Order dated June 1, 2010 (Dkt. No. 19), this Court appointed Kermit
Stumbo as Lead Plaintiff, appointed Glancy Binkow & Goldberg LLP as Lead Counsel and
Pomerantz Haudek Block Grossman & Gross LLP as liaison counsel, and granted Plaintiffs’
motion to file an amended class action complaint. On August 10, 2010, Plaintiffs filed the
Amended Class Action Complaint (the “Complaint”), on behalf of purchasers of Addus
common stock pursuant to its IPO between October 27, 2009 and March 18, 2010, inclusive
(the “Settlement Class Period”), against Addus, Mark S. Heaney, Francis J. Leonard, Mark L.
First, Simon A. Bachleda, W. Andrew Wright, III, Steven I. Geringer, Robert W. Baird & Co.
Incorporated, Oppenheimer & Co. Inc., and Stephens Inc. The Complaint seeks an unspecified
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amount of damages and alleges both that Defendants violated Section 11 of the Securities Act
of 1933 (the “Securities Act”) and that the Individual Defendants violated Section 15 of the
Securities Act, by including or allowing the inclusion of materially false and misleading
statements and omission in the Registration Statement and Prospectus (collectively, the
“Registration Statement”) issued in connection with the Company’s IPO.
On September 20, 2010, Defendants filed a motion to dismiss the Complaint. (Dkt. No.
37.) Plaintiffs filed an opposition to the motion to dismiss on October 12, 2010. (Dkt. No. 43.)
Thereafter, the parties conferred regarding the possibility of settlement and a mediation to
facilitate resolution of the case. Pursuant to a stipulation of the parties, on October 20, 2010,
this Court entered an Order staying the Litigation through December 9, 2010, to allow the
parties to participate in a mediation. (Dkt. No. 52.) On November 17, 2010, the parties
attended a mediation session under the direction of The Honorable Nicholas H. Politan (Ret.) at
the offices of Katten Muchin Rosenman, LLP, in New York, New York. The parties agreed to
the material terms of a settlement of this Litigation at the mediation session, and proceeded to
draft this Stipulation.
II. DEFENDANTS’ DENIALS OF WRONGDOING AND LIABILITY
Each Defendant has expressly denied and continues to deny all charges of wrongdoing
or liability arising out of any of the conduct, statements, acts or omissions alleged, or that could
have been alleged, in the Complaint. Pursuant to the terms set forth below, this Stipulation shall
in no event be construed as or deemed to be evidence of an admission or concession by any
Defendant with respect to any claim of any fault, liability, wrongdoing, or damage whatsoever.
Nonetheless, Defendants have concluded that further conduct of the Litigation would be
protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in
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the manner and upon the terms and conditions set forth in this Stipulation. Defendants also
have taken into account the uncertainty and risks inherent in any litigation, especially in
complex cases like the Litigation. Defendants have, therefore, determined that it is desirable
and beneficial that the Litigation be settled in the manner and upon the terms and conditions set
forth in this Stipulation.
III. CLAIMS OF PLAINTIFFS AND BENEFITS OF SETTLEMENT
Plaintiffs believe that the claims asserted in the Litigation have merit and that the
evidence developed to date supports the claims asserted. However, counsel for Plaintiffs
recognize and acknowledge the expense and length of continued proceedings necessary to
prosecute the Litigation against Defendants through trial and through appeals. Plaintiffs have
taken into account the uncertain outcome and the risk of any litigation, especially in complex
actions such as the Litigation, and the difficulties and delays inherent in such Litigation.
Plaintiffs are also mindful of the inherent problems of proof under and possible defenses to the
claims of securities law violations asserted in the Litigation. Plaintiffs believe that the
settlement set forth in the Stipulation confers substantial benefits upon the Settlement Class.
Based on their evaluation, Plaintiffs and counsel for Plaintiffs have determined that the
Settlement set forth in the Stipulation is in the best interests of Plaintiffs and the Settlement
Class and, therefore, determined that it is desirable and beneficial to Plaintiffs and the
Settlement Class that the Litigation be settled upon the terms and conditions set forth in this
Stipulation.
IV. TERMS OF STIPULATION AND AGREEMENT OF SETTLEMENT
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED by and among
Plaintiffs (for themselves and the Settlement Class Members) and Defendants, by and through
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their respective counsel or attorneys of record, that, subject to the approval of the Court, the
Litigation and the Released Claims shall be finally and fully compromised, settled and released,
and the Litigation shall be dismissed with prejudice, upon and subject to the terms and
conditions of the Stipulation, as follows.
1. Definitions
As used in the Stipulation, the following terms have the meanings specified below. In
the event of any inconsistency between any definition set forth below and any definition set
forth in any document attached as an exhibit to this Stipulation, the definition set forth below
shall control.
1.1 “Addus” means Addus HomeCare Corporation.
1.2 “Addus Defendants” means Addus, Mark S. Heaney, Francis J. Leonard,
Mark L. First, Simon A. Bachleda, W. Andrew Wright, III and Steven I. Geringer.
1.3 “Addus Defendants’ Counsel” means Katten Muchin Rosenman LLP.
1.4 “Authorized Claimant” means any Member of the Settlement Class who,
in accordance with the terms of this Stipulation, is entitled to a distribution from the Settlement
Fund pursuant to any Plan of Allocation or any order of the Court.
1.5 “Claims Administrator” means The Garden City Group, Inc. or its
successor, or such other person or entity designated by the Court.
1.6 “Complaint” means the Amended Class Action Complaint filed by
Plaintiffs on August 10, 2010.
1.7 “Court” means the United States District Court for the Northern District
of Illinois, Eastern Division.
1.8 “Defendants” means Addus, Mark S. Heaney, Francis J. Leonard, Mark
L. First, Simon A. Bachleda, W. Andrew Wright, III, Steven I. Geringer, Robert W. Baird &
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Co. Incorporated, Oppenheimer & Co. Inc., and Stephens Inc.
1.9 “Defendants’ Counsel” means Katten Muchin Rosenman LLP and Steptoe
& Johnson LLP.
1.10 “Effective Date” means the first date by which all of the events and
conditions specified in ¶7.1 of this Stipulation have been met and have occurred.
1.11 “Escrow Agent” means The Garden City Group, Inc. or its successor, or
such other person or entity designated by the Court.
1.12 “Final” means, with respect to any order of court, including, without
limitation, the Judgment, that such order represents a final and binding determination of all
issues within its scope and is not subject to further review on appeal or otherwise. Without
limitation, an order becomes “Final” when: (a) no appeal has been filed and the prescribed time
for commencing any appeal has expired; or (b) an appeal has been filed and either (i) the appeal
has been dismissed and the prescribed time, if any, for commencing any further appeal has
expired, or (ii) the order has been affirmed in its entirety and the prescribed time, if any, for
commencing any further appeal has expired. For purposes of this Paragraph, an “appeal”
includes appeals as of right, discretionary appeals, interlocutory appeals, proceedings involving
writs of certiorari or mandamus, and any other proceedings of like kind. Any appeal or other
proceeding pertaining to any order adopting or approving a Plan of Allocation, or to any order
issued in respect to an application for attorneys’ fees and expenses pursuant to ¶¶ 6.1 and 6.2,
below, shall not in any way delay or preclude the Judgment from becoming Final.
1.13 “Individual Defendants” means Mark S. Heaney, Francis J. Leonard,
Mark L. First, Simon A. Bachleda, W. Andrew Wright, III, and Steven I. Geringer.
1.14 “Judgment” means the judgment to be rendered by the Court, in the form
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attached as Exhibit B hereto.
1.15 “Lead Plaintiff” means Kermit Stumbo.
1.16 “Litigation” means Crotteau v. Addus HomeCare Corporation, et al.,
Civil Action No. 10 C 1937 (VMK)(JC), pending in the United States District Court for the
Northern District of Illinois, Eastern Division.
1.17 “Person(s)” means an individual, corporation, limited liability company,
professional corporation, partnership, limited partnership, limited liability partnership,
association, joint stock company, estate, legal representative, trust, unincorporated association,
government or any political subdivision or agency thereof, and any business or legal entity
together with their spouses, heirs, predecessors, successors, representatives, or assignees of any
of the foregoing, and any other representative or person or entity acting on behalf of, or
claiming under, any of these persons and entities.
1.18 “Plaintiffs” means Kermit Stumbo and Steve Crotteau.
1.19 “Plaintiffs’ Lead Counsel” means Glancy Binkow & Goldberg LLP.
1.20 “Plan of Allocation” means a plan or formula of allocation of the
Settlement Fund, to be approved by the Court, whereby the Settlement Fund shall be distributed
to Authorized Claimants after payment of or provision for expenses of notice and administration
of the settlement, Taxes and Tax Expenses, and such attorneys’ fees, costs, expenses, and
interest as may be awarded by the Court. Any Plan of Allocation is not part of the Stipulation
and the Released Persons shall not have any responsibility or liability with respect thereto.
1.21 “Proof of Claim and Release” means the form to be sent to Settlement
Class Members, in the form attached as Exhibit A-2 hereto, upon further order(s) of the Court,
by which any Settlement Class Member may make claims against the Settlement Fund for
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damages allegedly incurred by reason of their investment(s) in Addus common stock.
1.22 “Released Claims” means any and all claims (including Unknown
Claims), demands, losses, rights, causes of action, liabilities, obligations, judgments, suits,
matters, controversies and issues of any kind or nature whatsoever, whether known or unknown,
contingent or absolute, suspected or unsuspected, disclosed or undisclosed, concealed or hidden,
apparent or not apparent, accrued or unaccrued, matured or unmatured, liquidated or not
liquidated, asserted or unasserted that have been or could have been asserted against Defendants
or any of the Released Persons in the Litigation or in any court, tribunal, forum or proceeding
(including, but not limited to, any claims arising under federal, state or foreign law, common
law, statute, rule, or regulation relating to alleged fraud, breach of any duty, negligence,
violations of the federal securities laws, or otherwise, and including all claims within the
exclusive jurisdiction of the federal courts), whether individual, class, direct, derivative,
representative, legal, equitable or any other type or in any other capacity, which Plaintiffs or any
Member of the Settlement Class ever had, now has, or hereafter can, shall, or may have against
Defendants or any of the Released Persons by reason of, arising out of, relating to, involving or
in connection with, directly or indirectly the allegations, conduct, facts, events, practices,
transactions, acts, occurrences, statements, representations, alleged misrepresentations, alleged
omissions, or any other matter, thing or cause whatsoever, or any series thereof, that were, could
have been or in the future might be alleged, claimed, asserted, embraced, involved, or set forth,
referred to in or otherwise related to, directly or indirectly, the Litigation or subject matter of the
Litigation, including without limitation, the documents filed with or provided to the Securities
and Exchange Commission and all disclosures or alleged non-disclosures made by Defendants
in connection with any of the foregoing, except claims to enforce the Settlement.
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1.23 “Released Person(s)” means each and all of Defendants, and/or any of
their respective past, present or future, family members and spouses, parent entities, associates,
affiliates or subsidiaries and each and all of their past, present, or future officers, directors,
stockholders, representatives, employees, attorneys, financial or investment advisors,
consultants, accountants, underwriters, investment banks or bankers, commercial bankers,
insurers, reinsurers, excess insurers, co-insurers, engineers, advisors, principals or agents, heirs,
executors, trustees, estates, beneficiaries, distributees, foundations, general or limited partners
or partnerships, joint ventures, personal representatives, administrators, and each of their
respective predecessors, successors, and assigns, and any trust of which any Defendant is the
settlor or which is for the benefit of any Defendant and/or member(s) of his family.
1.24 “Settlement” means the settlement of the Litigation as embodied in this
Stipulation.
1.25 “Settlement Class” means all persons and/or entities other than
Defendants who purchased Addus HomeCare Corporation common stock pursuant and/or
traceable to the Registration Statement issued in connection with Addus’ October 27, 2009 IPO.
1.26 “Settlement Class Member” or “Member of the Settlement Class” means
a Person who falls within the definition of the Settlement Class as set forth in ¶1.25 and who
does not validly request exclusion from the Settlement Class in accordance with the procedures
to be established by the Court in connection with the approval of this Stipulation and the
Settlement.
1.27 “Settlement Class Period” means the period commencing on October 27,
2009 through March 18, 2010, inclusive.
1.28 “Settlement Fund” means three million dollars ($3,000,000.00), plus any
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interest earned thereon.
1.29 “Settling Parties” means, collectively, Defendants and Plaintiffs on behalf
of themselves and the Members of the Settlement Class.
1.30 “Unknown Claims” means any Released Claims which Plaintiffs or any
Settlement Class Member does not know or suspect to exist in his, her or its favor at the time of
the release of the Released Persons which, if known by him, her or it, might have affected his,
her or its settlement with and release of the Released Persons, or might have affected his, her or
its decision not to object to this Settlement. Unknown Claims include those claims in which
some or all of the facts comprising the claim may be suspected, or even undisclosed or hidden.
With respect to any and all Released Claims, the Settling Parties stipulate and agree that, upon
the Effective Date, Plaintiffs shall expressly waive, and each of the Settlement Class Members
shall be deemed to have, and by operation of the Judgment shall have, expressly waived the
provisions, rights, and benefits of California Civil Code § 1542, which provides:
A general release does not extend to claims which the creditor does notknow or suspect to exist in his or her favor at the time of executing therelease, which if known by him or her must have materially affected his orher settlement with the debtor.
Plaintiffs shall expressly waive, and each of the Settlement Class Members shall be deemed to
have, and by operation of the Judgment shall have, expressly waived any and all provisions,
rights, and benefits conferred by any law of any state or territory of the United States, or
principle of common law or foreign law, which is similar, comparable or equivalent in effect to
California Civil Code § 1542. Plaintiffs and Settlement Class Members may hereafter discover
facts in addition to or different from those which he, she or it now knows or believes to be true
with respect to the subject matter of the Released Claims, but Plaintiffs shall expressly and each
Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation
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of the Judgment shall have, fully, finally, and forever settled and released any and all Released
Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether
or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law
or equity now existing or coming into existence in the future, including, but not limited to,
conduct which is negligent, reckless, intentional, with or without malice, or a breach of any
duty, law or rule, without regard to the subsequent discovery or existence of such different or
additional facts. Plaintiffs acknowledge, and the Settlement Class Members shall be deemed by
operation of the Judgment to have acknowledged, that the foregoing waiver was separately
bargained for and a key element of the settlement of which this release is a part.
2. The Settlement
A. The Settlement Fund
2.1 Addus shall cause the principal amount of the Settlement Fund
($3,000,000.00) to be deposited with the Escrow Agent pursuant to wire instructions timely
provided in writing by Plaintiffs’ Lead Counsel to Addus Defendants’ Counsel on or before ten
(10) business days after the entry of the Notice Order referenced in ¶3.1 below.
2.2 Under no circumstances will Defendants collectively or separately be
required to pay or cause to be paid any amount in addition to the principal amount of the
Settlement Fund caused to be deposited with the Escrow Agent pursuant to ¶2.1 of this
Stipulation and the Settlement set forth herein.
B. The Escrow Agent
2.3 The Escrow Agent shall invest the Settlement Fund transferred pursuant
to ¶2.1 hereof, in instruments either fully insured or backed by the full faith and credit of the
United States Government or an agency thereof and shall reinvest the proceeds of these
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instruments as they mature in similar instruments at their then-current market rates. All risks
related to the investment of the Settlement Fund shall be borne by the Settlement Fund and not
by any of Defendants or Released Persons.
2.4 The Escrow Agent shall permit Plaintiffs’ Lead Counsel or the Claims
Administrator to withdraw up to one hundred thousand dollars ($100,000.00) from the
Settlement Fund upon funding of the Settlement Fund as set forth in ¶2.1, to be used to pay the
reasonable costs of providing notice of the Settlement to the Settlement Class, as well as
customary administration costs. Other than amounts disbursed for providing notice to the
Settlement Class, customary administration costs, and Taxes and Tax Expenses, and the Fee and
Expense Award (which shall be paid to Plaintiffs’ Lead Counsel immediately following the
Court’s execution of an order awarding such fees and expenses), the Settlement Fund shall not
be distributed until the Effective Date of the Settlement, as set forth in ¶7.1.
2.5 Subject to further order(s) and/or direction(s) as may be made by the
Court, or as provided in this Stipulation, the Escrow Agent is authorized to execute such
transactions as are consistent with the terms of this Stipulation.
2.6 All funds held by the Escrow Agent shall be deemed and considered to be
in custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such
time as such funds shall be distributed pursuant to this Stipulation or are returned to the Persons
paying the same pursuant to this Stipulation and Settlement and/or upon further order(s) of the
Court.
2.7 The Escrow Agent shall not be responsible for the payment of any sums
due to Authorized Claimants or other Persons, except to the extent of maintaining account of
and appropriately paying sums as required by this Stipulation, but only to the limited extent that
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such sums have been delivered into the Escrow Account as required by this Stipulation. The
Escrow Agent shall be liable to the extent provided for under the laws of the State of New York.
C. Taxes
2.8 (a) The Settling Parties and the Escrow Agent shall treat the escrow
account as a “qualified settlement fund” for purposes of Section 468B of the Internal Revenue
Code of 1986, as amended, and the Treasury Regulations promulgated thereunder. The Escrow
Agent and the Settling Parties shall timely make such elections as are necessary or advisable to
carry out the provision of this ¶2.8, including, without limitation, the “relation-back election”
described in Treas. Reg. §1.468B-1 back to the earliest permitted date. Such elections shall be
made in compliance with the procedures and requirements contained in such regulations. It
shall be the responsibility of the Escrow Agent to prepare and deliver timely and properly the
necessary documentation for signature by all necessary parties, and thereafter to cause the
appropriate filing to occur.
(b) The Escrow Agent shall be the escrow account’s “administrator”
as that term is used in Treas. Reg. §1.468B-2. As administrator, the Escrow Agent shall satisfy
the administrative requirements imposed by Treas. Reg. §1.468B-2 by, e.g., (i) obtaining a
taxpayer identification number, (ii) satisfying any information reporting or withholding
requirements imposed on distributions from the Settlement Fund, and (iii) timely and properly
filing applicable federal, state or local tax returns necessary or advisable with respect to the
Settlement Fund (including, without limitation, the returns described in Treas. Reg. §§1.468B-
2(k)) and paying any taxes reported thereon. Such returns (as well as the election described in
this ¶2.8) shall be consistent with this ¶2.8 and in all events shall reflect that all Taxes, as
defined in subsection (c) below, on the income earned by the Settlement Fund shall be paid out
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of the Settlement Fund as provided in ¶2.8(c) hereof.
(c) All: (i) taxes (including any estimated taxes, interest, or penalties)
arising with respect to the income earned by the Settlement Fund, including, without limitation,
any taxes or tax detriments that may be imposed upon Defendants or Defendants’ Counsel with
respect to any income earned by the Settlement Fund for any period during which the
Settlement Fund does not qualify as a “qualified settlement fund” for federal or state income tax
purposes (collectively, “Taxes”); and (ii) expenses and costs incurred in connection with the
operation and implementation of this ¶2.8, including, without limitation, expenses of tax
attorneys and/or accountants and mailing and distribution costs and expenses relating to filing
(or failing to file) the returns described in this ¶2.8 (collectively, “Tax Expenses”), shall be paid
out of the Settlement Fund; in all events neither Defendants nor Defendants’ Counsel shall have
any liability or responsibility for the Taxes or the Tax Expenses. With funds from the
Settlement Fund, the Escrow Agent shall indemnify and hold harmless Defendants and
Defendants’ Counsel for Taxes and Tax Expenses (including, without limitation, Taxes payable
by reason of any such indemnification). Further, Taxes and Tax Expenses shall be treated as,
and considered to be, a cost of administration of the Settlement Fund and shall timely be paid by
the Escrow Agent out of the Settlement Fund without prior order from the Court and the Escrow
Agent shall be obligated (notwithstanding anything herein to the contrary) to withhold from
distribution to Authorized Claimants any funds necessary to pay such amounts, including the
establishment of adequate reserves for any Taxes and Tax Expenses (as well as any amounts
that may be required to be withheld under Treas. Reg. §1.468B-2(1)(2)); Defendants,
Defendants’ Counsel and Defendants’ director and officer liability insurance carriers shall not
be responsible in any respect therefore, nor shall they have any liability therefore. The Settling
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Parties agree to cooperate with the Escrow Agent, each other, and their tax attorneys and
accountants to the extent reasonably necessary to carry out the provisions of this ¶2.8.
3. Notice Order and Settlement Hearing
3.1 As soon as practicable after execution of this Stipulation, Plaintiffs’ Lead
Counsel shall submit the Stipulation to the Court and shall apply for entry of an order (the
“Notice Order”) attached hereto as Exhibit A, requesting, inter alia, the preliminary approval of
the Settlement set forth in this Stipulation, approval for the mailing of a settlement notice (the
“Notice”) in the form attached as Exhibit A-1 hereto, and publication of a summary notice (the
“Summary Notice”) in the form attached as Exhibit A-3 hereto. The Notice shall include the
general terms of the Settlement set forth in this Stipulation, the proposed Plan of Allocation, the
general terms of the Fee and Expense Application as defined in ¶6.1 hereof, and the date of the
Settlement Hearing as defined below. Defendants do not and shall not take any position as to
the proposed Plan of Allocation.
3.2 Plaintiffs’ Lead Counsel shall request that the Court hold a hearing (the
“Settlement Hearing”) at which time Plaintiffs’ Lead Counsel shall request that the Court finally
approve the Settlement of the Litigation as set forth herein.
3.3 At the Settlement Hearing, the Settling Parties shall jointly request entry
of a Judgment, in the form attached hereto as Exhibit B:
(a) finally approving the Settlement as fair, reasonable, and adequate,
within the meaning of Rule 23 of the Federal Rules of Civil Procedure, and directing its
consummation pursuant to its terms;
(b) directing that the Litigation be dismissed without costs and with
prejudice, and releasing the Released Claims;
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(c) permanently barring and enjoining the institution and prosecution,
by Plaintiffs and the Settlement Class Members, of any other action against the Released
Persons in any court asserting any Released Claims; provided, however, that the Judgment shall
not bar any action or claim to enforce the terms of the Settlement, as approved by the Court, or
the Judgment;
(d) reserving jurisdiction over the Litigation, including all future
proceedings concerning the administration, consummation, and enforcement of this Stipulation;
(e) finding that the Complaint in the Litigation was filed on a good
faith basis in accordance with the Private Securities Litigation Reform Act of 1995 and Rule 11
of the Federal Rules of Civil Procedure;
(f) finding, pursuant to Rule 54(b) of the Federal Rules of Civil
Procedure, that there is no just reason for delaying and directing entry of a final judgment; and
(g) containing such other and further provisions consistent with the
terms of this Stipulation to which the Settling Parties expressly consent in writing.
3.4 At or after the Settlement Hearing, Plaintiffs’ Lead Counsel also will
request that the Court approve the proposed Plan of Allocation and the Fee and Expense
Application.
4. Releases and Bar Order
4.1 Upon the Effective Date, Plaintiffs and each of the Settlement Class
Members, for themselves and for each of their respective officers, directors, shareholders,
employees, agents, spouses, subsidiaries, heirs at law, successors and assigns, and any other
Person claiming (now or in the future) through or on behalf of them, and regardless of whether
any such Plaintiff or Settlement Class Member ever seeks or obtains by any means, including,
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without limitation, by submitting a Proof of Claim and Release, any distribution from the
Settlement Fund, shall be deemed to have, and by operation of the Judgment shall have, fully,
finally, and forever released, relinquished, and discharged all Released Claims against the
Released Persons and shall have covenanted not to sue the Released Persons with respect to all
such Released Claims, and shall be permanently barred and enjoined from instituting,
commencing, or prosecuting any Released Claim against the Released Persons except to enforce
the releases and other terms and conditions contained in this Stipulation or the Judgment entered
pursuant thereto.
4.2 Upon the Effective Date, each of Defendants shall be deemed to have,
and by operation of the Judgment shall have, fully, finally, and forever released, relinquished,
and discharged the Settlement Class (except any Settlement Class Member who opts out of the
Settlement), Plaintiffs and counsel to Plaintiffs from all claims (including Unknown Claims)
arising out of, relating to, or in connection with, the institution, prosecution, assertion,
settlement, or resolution of the Litigation or the Released Claims except to enforce the releases
and other terms and conditions contained in this Stipulation or any Court order (including, but
not limited to, the Judgment) entered pursuant thereto.
5. Administration and Calculation of Claims, Final Awards andSupervision and Distribution of the Settlement Fund
5.1 The Claims Administrator, subject to such supervision and direction of
the Court as may be necessary or as circumstances may require, shall administer and calculate
the claims submitted by Settlement Class Members and shall oversee distribution of the Net
Settlement Fund (defined below) to Authorized Claimants pursuant to the Plan of Allocation.
5.2 Upon the Effective Date and thereafter, the Settlement Fund shall be
applied as follows:
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(a) to pay counsel for Plaintiffs’ attorneys’ fees and expenses with
interest thereon (the “Fee and Expense Award”), if and to the extent allowed by the Court;
(b) to pay all the costs and expenses reasonably and actually incurred
in connection with providing notice, locating Settlement Class Members, soliciting Settlement
Class claims, assisting with the filing of claims, administering and distributing the Net
Settlement Fund to Authorized Claimants, processing Proof of Claim and Release forms, and
paying escrow fees and costs, if any;
(c) to pay the Taxes and Tax Expenses described in ¶2.8 hereof; and
(d) to distribute the balance of the Settlement Fund (the “Net
Settlement Fund”) to Authorized Claimants as allowed by the Stipulation, the Plan of
Allocation, or order of the Court.
5.3 Upon the Effective Date and thereafter, and in accordance with the terms
of the Stipulation, the Plan of Allocation, or such further approval and further order(s) of the
Court as may be necessary or as circumstances may require, the Net Settlement Fund shall be
distributed to Authorized Claimants, subject to and in accordance with the following:
(a) Within one hundred-twenty (120) days after the mailing of the
Notice or such other time as may be set by the Court, each Person claiming to be an Authorized
Claimant shall be required to submit to the Claims Administrator a completed Proof of Claim
and Release form (“Proof of Claim”), substantially in the form of Exhibit A-2 attached hereto,
signed under penalty of perjury, and supported by such documents as are specified in the Proof
of Claim and as are reasonably available to such Person.
(b) Except as otherwise ordered by the Court, any and all Settlement
Class Members who fail to timely submit a Proof of Claim within such period, or such other
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period as may be ordered by the Court, or otherwise allowed, shall be forever barred from
receiving any payments pursuant to the Stipulation and the Settlement set forth therein, but will
in all other respects be subject to and bound by the provisions of the Stipulation, the releases
contained therein, and the Judgment. Notwithstanding the foregoing, Plaintiffs’ Lead Counsel
shall have the discretion to accept late-submitted claims for processing by the Claims
Administrator so long as distribution of the Net Settlement Fund is not materially delayed
thereby.
(c) The Net Settlement Fund shall be distributed to Authorized
Claimants substantially in accordance with the Plan of Allocation set forth in the Notice and
approved by the Court. Any such Plan of Allocation is not a part of this Stipulation. No funds
from the Net Settlement Fund shall be distributed to Authorized Claimants until the Effective
Date. If there is any balance remaining in the Net Settlement Fund after six (6) months from the
date of distribution of the Net Settlement Fund (whether by reason of tax refunds, uncashed
checks, or otherwise), Plaintiffs’ Lead Counsel shall, if feasible, reallocate such balance among
Authorized Claimants in an equitable and economic fashion. Thereafter, any balance which still
remains in the Net Settlement Fund shall be donated to one or more secular §501(c)(3)
organization(s) selected by the Court.
5.4 The Released Persons, Defendants’ Counsel and Defendants’ directors
and officers liability insurance carriers shall have no responsibility for, interest in, or liability
whatsoever with respect to any act, omission or determination of the Escrow Agent, Claims
Administrator, Plaintiffs’ counsel, including Plaintiffs’ Lead Counsel, or designees of said
persons regarding the investment or distribution of the Settlement Fund or Net Settlement Fund,
the Plan of Allocation, the determination, administration, or calculation of claims, the payment
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or withholding of Taxes or Tax Expenses, or any losses incurred in connection with any such
matters. Plaintiffs and each Settlement Class Member hereby fully, finally, and forever release,
relinquish, and discharge the Released Persons and their counsel from any and all such liability.
5.5 No Person shall have any claim against Plaintiffs, Plaintiffs’ Lead
Counsel, the Claims Administrator, or their counsel based on the distributions made
substantially in accordance with the Stipulation and the Settlement contained herein, the Plan of
Allocation, or further order(s) of the Court. No Person shall have any claim against the
Released Persons or their counsel arising from or relating to the management of, distributions
from, or the disposition of the Settlement Fund or the Net Settlement Fund, and Plaintiffs and
each Settlement Class Member hereby fully, finally, and forever release, relinquish, and
discharge the Released Persons and their counsel from any and all such liability.
5.6 It is understood and agreed by the Settling Parties that any proposed Plan
of Allocation of the Net Settlement Fund including, but not limited to, any adjustments to an
Authorized Claimant’s claim set forth therein, is not a part of the Stipulation and is to be
considered by the Court separately from the Court’s consideration of the fairness,
reasonableness, and adequacy of the Settlement set forth in the Stipulation, and any order or
proceeding relating to the Plan of Allocation shall not operate to terminate or cancel the
Stipulation or affect the finality of the Court’s Judgment approving the Stipulation and the
Settlement set forth therein, or any other orders entered pursuant to the Stipulation. The time to
appeal from approval of the Settlement shall commence upon the Court’s entry of the Judgment
regardless of whether a Plan of Allocation has been submitted to the Court or has been
approved.
5.7 All Persons who fall within the definition of Members of the Settlement
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Class shall be subject to and bound by the provisions of this Stipulation, the releases contained
herein, and the Judgment with respect to all Released Claims, regardless of whether such
Persons seek or obtain by any means, including, without limitation, by submitting a Proof of
Claim or any similar document, any distribution from the Settlement Fund or the Net Settlement
Fund.
6. Plaintiffs’ Counsel’s Attorneys’ Fees and Expenses
6.1 Plaintiffs’ Lead Counsel may submit an application or applications (the
“Fee and Expense Application”) for distributions to Plaintiffs’ counsel from the Settlement
Fund for: (a) an award of attorneys’ fees; plus (b) the payment of reasonable expenses incurred
in connection with prosecuting the Litigation (including, but not limited to the fees and
expenses of experts and consultants), plus any interest on such attorneys’ fees and expenses at
the same rate and for the same periods as earned by the Settlement Fund (until paid) as may be
awarded by the Court. Plaintiffs’ Lead Counsel reserve the right to make additional
applications to the Court for fees and expenses incurred.
6.2 The Fee and Expense Award shall be paid to Plaintiffs’ Lead Counsel
from the Settlement Fund. Plaintiffs’ Lead Counsel may thereafter allocate the attorneys’ fees
among other Plaintiffs’ counsel in a manner in which they in good faith believe reflects the
contributions of such counsel to the initiation, prosecution, and resolution of the Litigation. If,
and when, as a result of any appeal and/or further proceedings on remand, or successful
collateral attack, the Fee and Expense Award is overturned or lowered, or if the Settlement is
terminated or is not approved by the Court, or if there is an appeal and any order approving the
Settlement does not become Final and binding upon the Class, or if the conditions of ¶7.1(d) are
not satisfied, then, within five (5) business days from receiving notice from Addus Defendants’
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Counsel or from a court of appropriate jurisdiction, Plaintiffs’ Lead Counsel shall refund to the
Settlement Fund such fees and expenses previously paid to them from the Settlement Fund plus
interest thereon at the same rate as earned on the Settlement Fund in an amount consistent with
such reversal or modification. Each such Plaintiff’s counsel’s law firm receiving fees and
expenses, as a condition of receiving such fees and expenses, on behalf of itself and each
partner and/or shareholder of it, agrees that the law firm and its partners and/or shareholders are
subject to the jurisdiction of the Court for the purpose of enforcing the provisions of this
Paragraph.
6.3 The procedure for and the allowance or disallowance by the Court of any
Fee and Expense Application by Plaintiffs’ Lead Counsel to be paid out of the Settlement Fund,
are not part of the Settlement set forth in the Stipulation, and are to be considered by the Court
separately from the Court’s consideration of the fairness, reasonableness, and adequacy of the
Settlement set forth in the Stipulation; and any order or proceeding relating to any Fee and
Expense Application, or any appeal from any order relating thereto or reversal or modification
thereof, shall not operate to terminate or cancel the Stipulation or the Settlement.
6.4 The Released Persons and their counsel shall have no responsibility for,
and no liability whatsoever with respect to, any payment from the Settlement Fund of any type
or nature whatsoever, including attorneys’ fees and expenses paid to any counsel for Plaintiffs
or the Settlement Class.
6.5 The Released Persons and their counsel shall have no responsibility for,
and no liability whatsoever with respect to, the allocation among Plaintiffs’ counsel, and/or any
other Person who may assert some claim thereto, of any Fee and Expense Award that the Court
may make in the Litigation.
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7. Conditions of Settlement, Effect of Disapproval, Cancellation, orTermination
7.1 The Effective Date of the Stipulation, and the Settlement incorporated
therein, shall be conditioned on the occurrence of all of the following events:
(a) the Court has entered the Notice Order, as required by ¶3.1
hereof;
(b) the Court has approved the Settlement as described herein,
following notice to the Settlement Class and a Settlement Hearing, as prescribed by Rule 23 of
the Federal Rules of Civil Procedure, and has entered the Judgment, in accordance with ¶3.3
hereof;
(c) the Judgment has become Final, as defined in ¶1.12 hereof; and
(d) the Judgment in the matter captioned as Paul Wes Bockley, et al.
v. Mark S. Heaney, et al., No. 10 CH 47253, pending in the Circuit Court of Cook County,
Illinois, County Department, Chancery Division (“Bockley”), entered pursuant to a Settlement
and dismissing Bockley with prejudice, has become Final as that term is defined in Paragraph
1.9 of the Stipulation of Settlement executed by the parties to that Settlement on or about March
21, 2011. However, any appeal or other proceeding pertaining to an application for attorneys'
fees and expenses in the Bockley case shall not in any way delay or preclude the Effective Date
from occurring.
7.2 Upon the occurrence of all of the events referenced in ¶7.1 hereof, any
and all remaining interest or right of Defendants in or to the Settlement Fund, if any, shall be
absolutely and forever extinguished. If either of the conditions specified in ¶7.1(a) or ¶7.1(b)
hereof are not met, or if the conditions in ¶7.1(c) and ¶ 7. 1 (d) are not met and there is no longer
any possibility that the conditions in ¶7.1(c) and ¶ 7. 1 (d) can be met, then the Stipulation shall
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be canceled and terminated subject to 17.3 hereof, unless Plaintiffs’ Lead Counsel and
Defendants’ Counsel all mutually agree in writing to proceed with the Settlement in accordance
with ¶7.4.
7.3 Unless otherwise ordered by the Court, in the event the Effective Date
does not occur or this Stipulation shall terminate, or be canceled, or otherwise fail to become
effective for any reason, including, without limitation, in the event that the Settlement as
described herein is not approved by the Court or the Judgment is reversed or vacated following
any appeal taken there from, then:
(a) within five (5) business days after written notification of such
event is sent by Defendants’ Counsel or Plaintiffs’ Lead Counsel to the Escrow Agent, the
Settlement Fund (including accrued interest), excluding only reasonable costs incurred in
connection with providing notice to the Settlement Class that have either been properly
disbursed or are due and owing pursuant to 12.4 and Taxes and Tax Expenses that have been
paid or that have accrued and will be payable at some later date in accordance with 12.8, will be
refunded, reimbursed, and repaid by the Escrow Agent as directed by Addus Defendants’
Counsel; if said amount or any portion thereof is not returned within such five (5) day period,
then interest shall accrue thereon at the same rate as earned by the Settlement Fund until the
date that said amount is returned;
(b) at the request of Addus Defendants’ Counsel, the Escrow Agent
or its designee shall apply for any Tax refund owed on the Settlement Fund and pay the
proceeds as directed in writing by Addus Defendants’ Counsel, after deduction of any fees or
expenses reasonably incurred in connection with such application(s) for refund pursuant to such
written request;
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(c) the Settling Parties shall be restored to their respective positions
in the Litigation as of March 20, 2011, with all of their respective claims and defenses preserved
as they existed on that date;
(d) the terms and provisions of the Stipulation shall be null and void
and shall have no further force and effect with respect to the Settling Parties, and neither the
existence nor the terms of this Stipulation (nor any negotiations preceding this Stipulation nor
any acts performed pursuant to, or in furtherance of, this Stipulation) shall be used in this
Litigation or in any other proceeding for any purpose; and
(e) any judgment or order entered by the Court in accordance with the
terms of the Stipulation shall be treated as vacated, nunc pro tunc.
7.4 If the Court does not enter the Judgment in the form attached as Exhibit B
hereto, or if the Court enters the Judgment and appellate review is sought and, on such review,
the entry of the Judgment is finally vacated, modified, or reversed, then this Stipulation and the
Settlement incorporated therein shall be cancelled and terminated, unless all parties who are
adversely affected thereby, in their sole discretion within thirty (30) days from the date of the
mailing of such ruling to such parties, provide written notice to all other parties hereto of their
intent to proceed with the Settlement under the terms of the Judgment as modified by the Court
or on appeal. Such notice may be provided on behalf of Plaintiffs and the Settlement Class
Members by Plaintiffs’ Lead Counsel. No Settling Party shall have any obligation whatsoever
to proceed under any terms other than substantially in the form provided and agreed to herein;
provided, however, that no order of the Court concerning any Fee and Expense Application or
Plan of Allocation, or any modification or reversal on appeal of such order, shall constitute
grounds for cancellation or termination of this Stipulation by any Settling Party. Without
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limiting the foregoing, Defendants shall have, in their sole and absolute discretion, the option to
terminate the Settlement in its entirety in the event that the Judgment, upon becoming Final,
does not provide for the dismissal with prejudice of the Litigation against them.
7.5 If, prior to the Settlement Hearing, any Persons who otherwise would be
Settlement Class Members have validly requested exclusion from the Settlement Class
(“Requests for Exclusion”) in accordance with the provisions of the Notice or Notice Order, and
such Persons, in the aggregate, during the Settlement Class Period purchased equal to or more
than a certain percentage of Addus common stock specified in a separate Supplemental
Agreement to the Stipulation, then Addus Defendants shall have, in their sole and absolute
discretion, the option to terminate this Stipulation on behalf of all Parties in accordance with the
procedures set forth in the Supplemental Agreement. Plaintiffs’ Lead Counsel shall, however,
have an opportunity to seek retraction of any Request for Exclusion until the deadline for such
retractions as set forth in the Notice or Notice Order. The Supplemental Agreement shall not be
filed with the Court. If required by the Court, Plaintiffs and Addus Defendants shall request
that the Supplemental Agreement be filed under seal and/or any of its terms be disclosed only in
camara to the Court for purposes of approving the Settlement, and that such disclosure shall be
carried out to the fullest extent possible in accordance with the practices of the Court so as to
preserve the confidentiality of the Supplemental Agreement, particularly the threshold
percentage amount of Addus common stock specified in the Supplemental Agreement.
Plaintiffs’ Lead Counsel shall promptly provide copies of any or all Requests for Exclusion
received by Plaintiffs’ Counsel to Defendants’ Counsel. A listing of all persons who have
validly requested exclusion from the Settlement Class shall be provided to Defendants’ Counsel
and the Court no later than five (5) days prior to the Settlement Hearing.
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8. Miscellaneous Provisions
8.1 The Settling Parties: (a) acknowledge that it is their intent to consummate
this Stipulation; and (b) agree to cooperate to the extent reasonably necessary to effectuate and
implement all terms and conditions of the Stipulation and to exercise their best efforts to
accomplish the foregoing terms and conditions of the Stipulation.
8.2 The Settling Parties intend this Settlement to be a final and complete
resolution of all disputes between them. The Settlement compromises claims which are
contested and shall not be deemed an admission by any Settling Party as to the merits of any
claim or defense.
8.3 While Defendants deny that the claims advanced in the Litigation were
meritorious, they will not assert in any public statement that the Litigation was not filed in good
faith and/or is not being settled voluntarily after consultation with competent legal counsel. The
Judgment will contain a finding that, during the course of the Litigation, the parties and their
respective counsel at all times complied with the requirements of Federal Rule of Civil
Procedure 11. The Settling Parties agree that the amount paid to the Settlement Fund and the
other terms of the Settlement were negotiated in good faith by the Settling Parties and reflect a
Settlement that was reached voluntarily after consultation with competent legal counsel and
with the assistance of The Honorable Nicholas H. Politan (Ret.). The Settling Parties reserve
their right to rebut, in a manner that such party determines to be appropriate, any contention
made in any public forum that the Litigation was brought or defended in bad faith or without a
reasonable basis.
8.4 Neither this Stipulation nor the Settlement contained herein, nor any act
performed or document executed pursuant to or in furtherance of this Stipulation or the
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Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the
validity of any Released Claim, any allegation made in the Litigation, or any wrongdoing or
liability of Defendants or any Released Persons; or (b) is or may be deemed to be or may be
used as an admission of, or evidence of, any liability, fault, or omission of any of Defendants or
any Released Persons in any civil, criminal, or administrative proceeding in any court,
administrative agency, or other tribunal. Neither this Stipulation nor the Settlement, nor any act
performed or document executed pursuant to or in furtherance of this Stipulation or the
Settlement shall be admissible in any proceeding for any purpose, except to enforce the terms of
the Settlement, except that Defendants may file the Stipulation and/or the Judgment in any
action that may be brought against them in order to support a defense or counterclaim based on
principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or
reduction, or any other theory of claim preclusion or issue preclusion or similar defense or
counterclaim.
8.5 The Stipulation may be amended or modified only by a written
instrument signed by or on behalf of all Settling Parties or their respective successors-in-
interest. After prior notice to the Court, the Settling Parties may agree to reasonable extensions
of time to carry out any provisions of this Stipulation.
8.6 The Stipulation, including its Exhibits and Supplemental Agreement
which are material parts thereof, constitutes the entire agreement among the parties hereto and
no representations, warranties, or inducements have been made to any party concerning the
Stipulation other than the representations, warranties, and covenants contained and
memorialized in such documents. It is understood by the Settling Parties that, except for the
matters expressly represented herein, the facts or law with respect to which this Stipulation is
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entered into may turn out to be other than or different from the facts now known to each party or
believed by such party to be true; each party therefore expressly assumes the risk of the facts or
law turning out to be so different, and agrees that this Stipulation shall be in all respects
effective and not subject to termination by reason of any such different facts or law. Except as
otherwise provided herein, each party shall bear its own costs.
8.7 Plaintiffs’ Lead Counsel, on behalf of the Settlement Class, is expressly
authorized by Plaintiffs to take all appropriate action required or permitted to be taken by the
Settlement Class pursuant to the Stipulation to effectuate its terms and also are expressly
authorized to enter into any modifications or amendments to the Stipulation on behalf of the
Settlement Class which they deem appropriate. Plaintiffs and Plaintiffs’ Lead Counsel represent
and warrant that none of Plaintiffs’ claims or causes of action referred to herein or that could
have been alleged in the Litigation has been assigned, encumbered or in any manner transferred
in whole or in part.
8.8 Each counsel or other Person executing the Stipulation and any
documents prepared in furtherance of the Stipulation on behalf of any party hereto, hereby
warrants that such Person has the full authority to do so.
8.9 The Stipulation may be executed in one or more counterparts. All
executed counterparts and each of them shall be deemed to be one and the same instrument. A
complete set of executed counterparts shall be filed with the Court.
8.10 The Stipulation shall be binding upon, and inure to the benefit of, the
successors and assigns of the parties hereto, including any corporation or other entity into or
with which any party merges, consolidates, or reorganizes.
8.11 The Court shall retain jurisdiction with respect to implementation and
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i
enforcement of the terms of the Stipulation., and all parties hereto submit to the jurisdiction ofi
the Court for purposes of implementing and enforcing the settlement embodied in the
Stipulation.
8.12 Nothing in this Stipulation, Settlement, or the negotiations or proceedings
relating to the foregoing is intended to or shall be deemed to constitute a waiver of any
applicable privilege or immunity, including, without limitation, the accountants' privilege, the
attorney-client privilege, the joint defense privilege, or work product immunity.
8.13 This Stipulation and the Settlement contemplated by it, and all disputes
arising out of or relating to the Stipulation and Settlement shall be construed and enforced in
accordance with, and governed by, the substantive laws and procedural rules of the State of
Illinois without giving effect to that Illinois' choice-of-law principles.
8.14 Any written notice required pursuant to or in connection with this
Stipulation shall be addressed to the parties' counsel as designated and identified below.
IN WITNESS WHEREOF, the parties hereto have caused the Stipulation to be executed,
by their duly authorized attorneys, dated as of March 21, 2011.
Dated: ^Aard) a^ ^o^O^ GLANCY BINKOW & GOLDBERG LLP
By 4/0 f A M t !1`rPeter A. Binkow y
Robin Bronzaft HowaldRobert V. ProngayCoby M. Turner1801 Avenue of the Stars, Suite 311Los Angeles, CA 90067Telephone: (310) 201-9150Facsimile: (310) 201-9160Email: [email protected]
Lead Counsel for Plaintiffs
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Dated: d 3, z /, i/ KATTEN MUCHIN ROSENMAN LLPf
By: r.^ M. lien Hennessy
Blake M. Mills v525 West Monroe StreetChicago, IL 60661-3693Telephone: (312) 902-5200Facsimile: (312) 902-1061
Counsel for HomeCare Corporation, Mark S.,f PHeaney, Francis J Leonard Mark L. First, Simon A.Bachleda, W. Andrew Wright, III, and Steven I.Geringer
Dated: 21— ZO// STEPTOE & JOHNSON LLPI
Peter M,0011'115 South LaSalle StreetSuite 3100Chicago, IL 60603Telephone: (312) 577-1236Facsimile: (312) 577-1370
Counsel for Robert W. Baird & Co. Incorporated,Oppenheimer & Co. Inc., and Stephens Inc.
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EXHIBIT 2
Case: 1:10-cv-01937 Document #: 75-2 Filed: 03/21/11 Page 2 of 10 PageID #:499
UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEVE CROTTEAU, Individually and onBehalf of All Others Similarly Situated,
Plaintiff,
v. Civil Action No. 10 C 1937 (VMK)(JC)
ADDUS HOMECARE CORPORATION,MARK S. HEANEY, FRANCIS J. The Honorable Virginia M. KendallLEONARD, MARK L. FIRST, SIMON A.BACHLEDA, W. ANDREW WRIGHT, III,STEVEN I. GERINGER, ROBERT W.BAIRD & CO. INCORPORATED,OPPENHEIMER & CO. INC., andSTEPHENS INC.,
Defendants.
EXHIBIT A
ORDER PRELIMINARILY APPROVING SETTLEMENTAND PROVIDING FOR NOTICE OF PROPOSED SETTLEMENT
Case: 1:10-cv-01937 Document #: 75-2 Filed: 03/21/11 Page 3 of 10 PageID #:500
WHEREAS, a class action is pending before the Court entitled Crotteau v. Addus
HomeCare Corporation et al, Civil Action No. 10 C 1937 (VMK)(JC), United States District
Court for the Northern District of Illinois, Eastern Division (the “Litigation”);
WHEREAS, the Court has received the Stipulation of Settlement dated as of March 21,
2011 (the “Stipulation”) 1 , which has been entered into by Plaintiffs and Defendants, and the
Court has reviewed the Stipulation and the Exhibits annexed thereto;
WHEREAS, the Parties having made application, pursuant to Federal Rule of Civil
Procedure 23(e), for an order preliminarily approving the Settlement of this Litigation, in
accordance with the Stipulation which sets forth the terms and conditions for a proposed
Settlement of the Litigation and for dismissal of the Litigation with prejudice upon the terms
and conditions set forth therein; and the Court having read and considered the Stipulation;
NOW, THEREFORE, IT IS HEREBY ORDERED:
1. The Court does hereby preliminarily approve the Stipulation and the Settlement
set forth therein, subject to further consideration at the Settlement Hearing described below.
2. The Court finds that: (a) the Stipulation resulted from arm’s-length negotiations;
and (b) the Stipulation is sufficiently fair, reasonable and adequate as to the Settlement Class
Members to warrant providing notice of the Settlement to Class Members and holding a
Settlement Hearing.
3. The Settlement Hearing shall be held before this Court on ,
2011, at 9:00 a.m., to determine whether the proposed Settlement of the Litigation on the terms
and conditions provided for in the Stipulation is fair, reasonable and adequate to the Settlement
1 For purposes of this Order, the Court adopts all defined terms as set forth in theStipulation, and the terms used herein shall have the same meaning as in the Stipulation.
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Class and should be approved by the Court; whether to certify a Settlement Class; whether a
Judgment as provided in the Stipulation should be entered herein; whether the proposed Plan of
Allocation should be approved; and to determine the amount of fees and expenses that should be
awarded to Plaintiffs’ Lead Counsel. The Court may adjourn the Settlement Hearing without
further notice to Members of the Settlement Class.
4. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, the Court
preliminarily certifies, solely for the purposes of effectuating this Settlement, a Settlement Class
consisting of all Persons other than Defendants who purchased or otherwise acquired the
common stock of Addus HomeCare Corporation (“Addus”) between October 27, 2009 and
March 18, 2010, inclusive (the “Settlement Class”), and were purportedly damaged thereby.
Excluded from the Settlement Class are Defendants herein, the officers and directors of
Defendants, members of their immediate families, and the heirs, successors or assigns of any of
the foregoing. There has been no prior notice to Members of the Settlement Class of the
certification of the Settlement Class in this Litigation or prior opportunity for any Person or
entity to request to be excluded from the Settlement Class.
5. The Court approves, as to form and content, the Notice of Proposed Settlement
of Class Action, Motion for Attorneys’ Fees and Settlement Hearing (the “Notice”), the Proof of
Claim and Release form (the “Proof of Claim”), and Summary Notice (“Summary Notice”)
annexed respectively as Exhibits A-1, A-2 and A-3 to the Stipulation, and finds that the mailing
and distribution of the Notice and publishing of the Summary Notice substantially in the manner
and form set forth in this Order meet the requirements of Federal Rule of Civil Procedure 23
and Due Process, and is the best notice practicable under the circumstances and shall constitute
due and sufficient notice to all Persons entitled thereto.
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6. Pending final determination by the Court as to whether the Settlement, as set
forth in the Stipulation, is fair, reasonable and adequate and should be finally approved and
whether the Judgment dismissing the Litigation with prejudice should be approved, no Class
Member, either directly, representatively or in any other capacity, shall assert, commence or
prosecute against any of the Released Persons any of the Released Claims in this Litigation, or
in any other proceeding or forum. This injunction is necessary to protect and effectuate the
Settlement, this Order, and the Court’s flexibility and authority to effectuate the Settlement and
to enter judgment when appropriate, and is ordered in aid of the Court’s jurisdiction and to
protect its judgments.
7. The Court appoints the Garden City Group, Inc. (“Claims Administrator”) to
supervise and administer the notice procedure as well as the processing of claims as more fully
set forth below:
(a) Not later than twenty (20) business days after the date of this Order (the
“Notice Date”), the Claims Administrator shall cause a copy of the Notice and the Proof
of Claim, substantially in the forms annexed as Exhibits A-1 and A-2 to the Stipulation,
to be mailed by first class mail to all Class Members who can be identified with
reasonable effort;
(b) Not later than thirty (30) business days after the date of this Order, the
Claims Administrator shall cause the Summary Notice to be published once in Investors
Business Daily, and on a different day shall cause the Summary Notice to be published
once in Globe Newswire;
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(c) Not later than twenty (20) business days after the date of this Order, the
Claims Administrator shall cause the Stipulation and its Exhibits and a copy of the
Notice to be posted on the following website: www.gcginc.com ; and
(d) Not later than seventy (70) days after the date of this Order, Plaintiffs’
Lead Counsel shall cause to be served on Defendants’ Counsel and filed with the Court
proof, by affidavit or declaration, of such mailing, publishing and posting.
8. Nominees who purchased or acquired Addus common stock between October 27,
2009 and March 18, 2010, inclusive, shall send the Notice and the Proof of Claim to all
beneficial owners of such Addus common stock within twenty (20) days after receipt thereof, or
send a list of the names and addresses of such beneficial owners to the Claims Administrator
within twenty (20) days of receipt thereof, in which event the Claims Administrator shall
promptly mail the Notice and the Proof of Claim to such beneficial owners. Plaintiffs’ Lead
Counsel shall, if requested, reimburse banks, brokerage houses or other nominees solely for
their reasonable out-of-pocket expenses incurred in providing the Notice to beneficial owners
who are Settlement Class Members out of the Settlement Fund, which expenses would not have
been incurred except for the sending of such Notice, subject to further order of this Court with
respect to any dispute concerning such compensation.
9. Any Person falling within the definition of the Settlement Class may, upon
request, be excluded from the Settlement Class. Any such Person must submit to the Claims
Administrator a request for exclusion (“Request for Exclusion”), postmarked no later than
twenty-one (21) days prior to the Settlement Hearing. A Request for Exclusion must state: (a)
the name, address, and telephone number of the Person requesting exclusion; (b) each of the
Person’s purchases and sales of Addus common stock made during the Settlement Class Period,
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including the dates of purchase or sale, the number of shares purchased and/or sold, and the
price paid or received per share for each such purchase or sale; and (c) that the Person wishes to
be excluded from the Settlement Class. All Persons who submit valid and timely Requests for
Exclusion in the manner set forth in this Paragraph shall have no rights under the Settlement,
shall not share in the distribution of the Net Settlement Fund, and shall not be bound by the
Settlement or the Judgment entered in this Litigation.
10. All Members of the Settlement Class (other than those Persons or entities who
submit a timely and valid Request for Exclusion) shall be bound by all determinations and
judgments in the Litigation concerning the Settlement, whether favorable or unfavorable to the
Settlement Class.
11. Settlement Class Members (other than those Persons or entities who shall timely
and validly request exclusion from the Settlement Class) who wish to collect in the Settlement
shall complete and submit Proof of Claim forms in accordance with the instructions contained
therein. Unless the Court orders otherwise, all Proof of Claim forms must be postmarked no
later than one hundred twenty (120) days from the Notice Date. Any Settlement Class Member
who does not timely submit a Proof of Claim form within the time provided for shall be barred
from sharing in the distribution of the proceeds of the Net Settlement Fund, unless otherwise
ordered by the Court.
12. Any Member of the Settlement Class may enter an appearance in the Litigation,
at his, her or its own expense, individually or through counsel of his, her or its own choice. If
they do not enter an appearance, Plaintiffs’ Lead Counsel will represent them.
13. Any Member of the Settlement Class (other than those Persons or entities who
submit a timely and valid Request for Exclusion) may appear and show cause, if he, she or it
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has any reason, why the proposed Settlement of the Litigation should or should not be approved
as fair, reasonable and adequate, why a Judgment should or should not be entered thereon, why
the Plan of Allocation should or should not be approved, or why attorneys’ fees and
reimbursement of expenses should or should not be awarded to Plaintiffs’ Lead Counsel;
provided, however, that no Settlement Class Member or any other Person shall be heard or
entitled to contest the approval of the terms and conditions of the proposed Settlement, or, if
approved, the Judgment to be entered thereon approving the same, or the order approving the
Plan of Allocation, or the attorneys’ fees and expenses to be awarded to Plaintiffs’ Lead
Counsel, unless that Person has filed said objections, papers and briefs with the Clerk of the
United States District Court for the Northern District of Illinois, Eastern Division, no later than
twenty-one (21) days prior to the Settlement Hearing and delivered copies of any such papers to
counsel identified in the Notice, such that they are received on or before such date. Any
Member of the Settlement Class who does not make his, her or its objection in the manner
provided shall be deemed to have waived such objection and shall forever be foreclosed from
making any such objection, unless otherwise ordered by the Court.
14. All funds held by the Escrow Agent shall be deemed and considered to be in
custodia legis of the Court, and shall remain subject to the jurisdiction of the Court, until such
time as such funds shall be distributed pursuant to the Stipulation or further order(s) of the
Court.
15. All papers in support of the Settlement, the Plan of Allocation, and the Fee and
Expense Application, shall be filed and served not later than thirty-five (35) days prior to the
Settlement Hearing. Any papers in further support of the Settlement, the Plan of Allocation and
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the application for attorneys’ fees or expenses, shall be filed and served no later than ten (10)
days prior to the Settlement Hearing.
16. Neither Defendants nor any of the Released Persons shall have any responsibility
for or liability with respect to the Plan of Allocation or any application for attorneys’ fees or
expenses submitted by Plaintiffs’ Lead Counsel, and such matters will be considered separately
from the fairness, reasonableness and adequacy of the Settlement.
17. At or after the Settlement Hearing, the Court shall determine whether the Plan of
Allocation proposed by Lead Counsel and any application for attorneys’ fees or expenses shall
be approved.
18. All reasonable expenses incurred in identifying and notifying Settlement Class
Members, as well as administering the Settlement Fund, and paying taxes and tax expenses,
shall be paid as set forth in the Stipulation. In the event the Settlement is not approved by the
Court, or otherwise fails to become effective, neither the Plaintiffs nor Plaintiffs’ Lead Counsel
shall have any obligation to repay any amounts actually and properly disbursed from the
Settlement Fund pursuant to this Paragraph.
19. Neither the Stipulation, nor any of its terms or provisions, nor any of the
negotiations or proceedings connected with it, shall be construed as an admission or concession
by the Defendants of the truth of any of the allegations in the Litigation, or of any liability, fault,
or wrongdoing of any kind and shall not be construed as, or deemed to be evidence of or an
admission or concession that Plaintiffs or any Settlement Class Members have suffered any
damages, harm, or loss.
20. In the event that the Settlement does not become effective in accordance with the
terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement
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Fund, or any portion thereof, is returned to the Addus Defendants, then this Order 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.
21. Pending the Settlement Hearing, the Court stays all proceedings in the Litigation,
other than proceedings necessary to carry out or enforce the terms and conditions of the
Stipulation.
22. The Court reserves the right to adjourn the date of the Settlement Hearing
without further notice to the Members of the Settlement Class, and retains jurisdiction to
consider all further applications arising out of or connected with the Settlement. The Court may
approve the Settlement, with such modifications as may be agreed to by the Parties, if
appropriate, without further notice to the Settlement Class.
DATED: The Honorable Virginia M. KendallUnited States District Judge
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EXHIBIT 3
Case: 1:10-cv-01937 Document #: 75-3 Filed: 03/21/11 Page 2 of 22 PageID #:509
UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEVE CROTTEAU, Individually and onBehalf of All Others Similarly Situated,
Plaintiff,
v. Civil Action No. 10 C 1937 (VMK)(JC)
ADDUS HOMECARE CORPORATION,MARK S. HEANEY, FRANCIS J. The Honorable Virginia M. KendallLEONARD, MARK L. FIRST, SIMON A.BACHLEDA, W. ANDREW WRIGHT, III,STEVEN I. GERINGER, ROBERT W.BAIRD & CO. INCORPORATED,OPPENHEIMER & CO. INC., andSTEPHENS INC.,
Defendants.
EXHIBIT A-1
NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION,MOTION FOR ATTORNEYS’ FEES AND SETTLEMENT HEARING
Case: 1:10-cv-01937 Document #: 75-3 Filed: 03/21/11 Page 3 of 22 PageID #:510
IF YOU PURCHASED OR ACQUIRED ADDUS HOMECARE CORPORATIONCOMMON STOCK BETWEEN OCTOBER 27, 2009 THROUGH MARCH 18, 2010,INCLUSIVE, YOU COULD RECEIVE A PAYMENT FROM A CLASS ACTIONSETTLEMENT.
A federal court authorized this Notice. This is not a solicitation from a lawyer.
Your legal rights are affected whether you act, or don’t act.Read this Notice carefully.
Security and Time Period: Addus HomeCare Corporation (“Addus”) common stock
(stock symbol: ADUS) purchased or acquired between October 27, 2009 through March 18,
2010, inclusive (the “Settlement Class Period”).
Settlement Fund: $3,000,000 in cash. Your recovery will depend on the number of
shares of Addus common stock you, and other Settlement Class Members who file claims,
purchased and sold and the prices at which you, and the other Settlement Class Members who
file claims, purchased and sold those shares. The estimated average recovery per share of
common stock will be approximately $0.55 per share before deduction of Court-approved fees
and expenses and costs of notice and claims administration.
Reasons for Settlement: The case has been litigated since March 2010. Plaintiffs and
Plaintiffs’ Lead Counsel believe that the Settlement provides the Settlement Class with a benefit
now, instead of years of further uncertain litigation, including disposition of summary judgment
motions, a contested trial and likely appeals, with the possibility of no recovery at all.
Plaintiffs allege that Defendants made materially false and misleading statements and
omitted material information relating to Addus’ financial condition relating to, among others,
Addus’ accounts receivable, in connection with its Initial Public Offering (“IPO”).
Defendants have denied and continue to deny each and all of the allegations made and
claims brought by Plaintiffs, maintain that they have meritorious defenses and Defendants
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contend that many of the factual allegations are materially inaccurate. Defendants also have
denied and continue to deny, among other things, the allegations that Plaintiffs or the Settlement
Class have suffered damages or that the Settlement Class was harmed by the conduct alleged in
the Complaint or otherwise.
Nonetheless, Defendants have concluded that further conduct of the Litigation would be
protracted and expensive, and that it is desirable that the Litigation be fully and finally settled in
the manner and upon the terms and conditions set forth in this Stipulation. Defendants also
have taken into account the uncertainty and risks inherent in any litigation, especially in
complex cases like this Litigation. The Settlement shall in no event be construed as, or deemed
to be evidence of, an admission or concession by any of Defendants with respect to any claim of
any fault or liability or wrongdoing or damage to the Settlement Class Members in this
Litigation.
If the Case Had Not Settled: The Settlement must be compared to the risk of no
recovery after contested dispositive motions, trial and likely appeals. A trial is a risky
proposition. The claims in the Litigation involve numerous complex legal and factual issues,
many of which would require expert testimony. The Parties disagree on both liability and
damages and do not agree on the average amount of damages per share, if any, that would be
recoverable if Plaintiffs were to have prevailed on each claim alleged. Among the many key
issues about which Plaintiffs and Defendants do not agree are: (1) whether Defendants violated
the securities laws or otherwise engaged in any wrongdoing; (2) whether the misrepresentations
and omissions alleged by Plaintiffs were material, false, misleading or otherwise actionable
under the securities laws; and (3) the method for determining whether, and the extent to which,
purchasers of Addus stock suffered injury and damages that could be recovered at trial.
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Attorneys’ Fees and Expenses: Plaintiffs’ Lead Counsel have not received any
payment for their work or expenses incurred in investigating the facts, conducting this
Litigation and negotiating the Settlement on behalf of the Plaintiffs and the Settlement Class.
Plaintiffs’ Lead Counsel will ask the Court for attorneys’ fees not to exceed one-fourth (1/4 or
25%) of the Settlement Fund and expenses not to exceed $45,000 to be paid from the Settlement
Fund.
If the above amounts are requested and approved by the Court, the average cost per
share of common stock will be approximately $0.15 per share, making the estimated recovery
per share after fees and expenses approximately $0.40.
Dismissal and Releases: If the proposed Settlement is approved, the Court will enter a
Final Judgment and Order of Dismissal with Prejudice (the “Judgment”). The Judgment will
dismiss the Released Claims with prejudice as to the Released Persons, which include the
Defendants and all released parties (including, but not limited to, their parents, subsidiaries and
affiliates, and all of their employees, directors and officers). The Judgment will provide that all
Class Members shall be deemed to have released and forever discharged all Released Claims (to
the extent Members of the Settlement Class have such claims) against all Released Persons.
The Released Claims and Released Parties are collectively called “Releases.” The terms of the
Releases are set forth in the Proof of Claim form that is enclosed.
Deadlines:
Submit Claim: , 2011
File Objection: , 2011
Request Exclusion , 2011
Court Hearing on Fairness of Settlement: , 2011
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More Information: www.gcginc.comClaims Administrator:
Addus HomeCare Corporation Securities LitigationClaims Administratorc/o The Garden City Group, Inc.PO Box 9349Dublin, OH 43017-4249
Lead Counsel:
Peter A. Binkow, Esq.Glancy Binkow & Goldberg LLP1801 Avenue of the Stars #311Los Angeles, California [email protected]
• Your legal rights are affected whether you act, or don’t act. Read this Notice carefully.
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
SUBMIT A CLAIM The only way to receive a payment.
OBJECT You may write to the Court if you do not like this Settlement.
EXCLUDE YOURSELF Receive no payment. This is the only option that allows you toparticipate in another lawsuit against the Defendants relating tothe Settlement Class claims being released in this case.
GO TO A HEARING You may ask to speak in Court about the fairness of theSettlement.
DO NOTHING Receive no payment.
• Unless you timely request exclusion from the Settlement Class, or unless the Court
rejects the proposed Settlement, you are bound by the Stipulation and its Releases,
whether or not you submit a Proof of Claim.
• These rights and options — and the deadlines to exercise them — are explained in this
Notice.
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• The Court presiding over this case must decide whether to approve the Settlement.
Payments will be made only if the Court approves the Settlement and, if there are any
appeals, after appeals are resolved. Please be patient.
WHAT THIS NOTICE CONTAINS
BASIC INFORMATION
1. Why did I receive this notice package?2. What is this lawsuit about?3. Why is this a class action?4. Why is there a Settlement?
WHO IS IN THE SETTLEMENT
5. How do I know if I am part of the Settlement?6. Where are the exceptions to being included?7. I’m still not sure if I’m included.
THE SETTLEMENT BENEFITS – WHAT YOU GET
8. What does the Settlement provide?9. How much will my payment be?
HOW YOU GET A PAYMENT – SUBMITTING A CLAIM FORM
10. How can I obtain a payment?11. When will I receive my payment?12. What am I giving up to receive a payment?
EXCLUDING YOURSELF FROM THE CLASS ACTION SETTLEMENT
13. How do I get out of the Class?14. If I do not exclude myself, can I sue the Defendants for the same thing later?15. If I exclude myself, can I receive money from the class action Settlement?
THE LAWYERS REPRESENTING YOU
16. Do I have a lawyer in the case?17. How will the lawyers be paid?
OBJECTING TO THE SETTLEMENT
18. How do I tell the Court that I do not like the Settlement?
THE COURT’S SETTLEMENT HEARING
19. When and where will the Court decide whether to approve the Settlement?20. Do I have to come to the hearing?21. May I speak at the hearing?
IF YOU DO NOTHING
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22. What happens if I do nothing at all?
GETTING MORE INFORMATION
23. Are there more details about the Settlement?
UNDERSTANDING YOUR PAYMENT
BASIC INFORMATION
1. Why Did I Receive This Notice Package?
You or someone in your family may have purchased or acquired the common stock of
Addus HomeCare Corporation (“Addus”), between October 27, 2009 through March 18, 2010,
inclusive.
This Notice was sent because you have a right to know about a proposed Settlement of a
class action lawsuit, and about all of your options, before the Court decides whether to approve
the Settlement. If the Court approves the Settlement and after any objections or appeals are
resolved, the Claims Administrator appointed by the Court will make the payments to those
persons who timely submit claims in the manner described below.
This package explains the lawsuit, the Settlement, your legal rights, what benefits are
available, who is eligible for them, and how to get them.
The Court in charge of the case is the United States District Court for the Northern
District of Illinois, Eastern Division, and the case is known as Crotteau v. Addus HomeCare
Corporation et al., Civil Action No. 10 C 1937 (VMK)(JC). Lead Plaintiff Kermit Stumbo
(“Lead Plaintiff”) and Plaintiff Steve Crotteau are collectively called Plaintiffs, and the
companies and persons they sued, including Addus, are collectively called Defendants. The
Parties include the Plaintiffs and the Defendants.
2. What Is This Lawsuit About?
This Litigation alleges violations of the federal securities laws (specifically, Sections 11
and 15 of the Securities Act of 1933 (15 U.S.C. §§ 77k and 77o)) against Defendants.
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Addus is publicly traded Delaware corporation with its principal executive offices
located at 2401 South Plum Grove Road, Palatine, Illinois 60067. Addus is a comprehensive
provider of a broad range of social and medical services in the home, including personal care
and assistance with activities of daily living, skilled nursing and rehabilitative therapies, and
adult day care. During the Settlement Class Period, Addus common stock traded on The
NASDAQ Global Market under the ticker symbol “ADUS.”
Plaintiffs allege that, during the Settlement Class Period, Addus’ stock price was
artificially inflated as a result of a series of untrue or materially misleading statements
concerning Addus’ financial condition. Defendants deny that they made any such misleading
statements and further deny that Addus’ stock price was artificially inflated as a result of any
statements.
3. Why Is This A Class Action?
Class actions are generally used in lawsuits that affect a large number of individuals; in
effect, the class action operates to consolidate into a single action all of the claims of individuals
allegedly harmed by the same conduct or course of conduct, thus alleviating the need for
members of the class to file their own individual lawsuits to recover for the harm alleged. Once
the class is certified, the Court is empowered to resolve all issues on behalf of members of the
class, except for those members of the class, if any, who specifically choose to exclude
themselves from the Class.
As part of the preliminary approval process, Plaintiffs will ask the Court to certify a
Settlement Class for settlement purposes only. The proposed Settlement Class will consist of
all persons and entities who purchased or acquired Addus common stock between October 27,
2009 through March 18, 2010, inclusive. All Settlement Class Period purchasers of Addus
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common stock are Members of the Settlement Class, except those persons who timely file a
Request for Exclusion by [21 days prior to the Settlement Hearing] , 2011. All
persons who do not timely exclude themselves from the Settlement Class will be bound by the
proposed Settlement and its accompanying Releases.
4. Why Is There a Settlement?
The Court did not decide in favor of Plaintiffs or Defendants. Instead, both sides agreed
to a Settlement. This permits them to avoid the cost and uncertainty of a trial, and permits
eligible Class Members who submit valid claims to receive compensation. Plaintiffs and their
attorneys believe the Settlement is best for all Class Members. Defendants have concluded that
further defense of the Litigation would be protracted and expensive, and that it is desirable that
the Litigation be fully and finally settled in the manner and upon the terms and conditions set
forth in the Stipulation of Settlement. Defendants also have taken into account the uncertainty
and risks inherent in any litigation, especially in complex cases such as the Litigation.
WHO IS IN THE SETTLEMENT
To see if you will receive money from this Settlement, you first have to determine if you
are a Settlement Class Member.
5. How Do I Know if I Am Part of the Settlement?
The Settlement Class includes all persons or entities who purchased or acquired
shares of Addus common stock between October 27, 2009 through March 18, 2010,
inclusive.
6. What Are the Exceptions to Being Included?
You are not a Settlement Class Member if you are a Defendant, an officer or director of
Addus, members of their immediate families, and the heirs, successors or assigns of any of the
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foregoing.
7. I’m Still Not Sure if I Am Included.
If you are still not sure whether you are included, you can ask for free help. You can
call Peter A. Binkow of Glancy Binkow & Goldberg LLP at 1-888-773-9224 for more
information. Or you can fill out and return the claim form described in question 10, to see if
you qualify.
THE SETTLEMENT BENEFITS — WHAT YOU GET
8. What Does the Settlement Provide?
The Settlement will result in a Settlement Fund of $3.0 million in cash. The balance of
this Fund after payment of Court-approved attorneys’ fees and the costs of claims
administration, including the costs of printing and mailing this Notice and the cost of publishing
the newspaper notice (the “Net Settlement Fund”) will be divided among all eligible Settlement
Class Members who send in valid Proof of Claim forms.
9. How Much Will My Payment Be?
Your share of the Net Settlement Fund will depend on the number of valid claim forms
that Settlement Class Members send in, the number of Addus common shares you purchased or
acquired during the relevant period, and the timing of your purchases and sales. You will not
receive a payment, however, if your proportionate share of the Net Settlement Fund is less than
$20.00.
You can calculate your claim (“Recognized Claim”) in accordance with the formula
shown below in the Plan of Allocation. After all Settlement Class Members have sent in their
Proof of Claim forms, the payment you receive will reflect your Recognized Claim in relation to
the Recognized Claims of all persons submitting Proof of Claim forms. The Recognized Claim
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is not the amount of the payment that you can expect, but is used to determine how the Net
Settlement Fund is allocated among all persons submitting claims.
HOW YOU OBTAIN A PAYMENT — SUBMITTING A PROOF OF CLAIM FORM
10. How Will I Obtain a Payment?
To qualify for payment, you must be an eligible Settlement Class Member, send in a
valid Proof of Claim form, and properly document your claim as requested in the Proof of
Claim form. A Proof of Claim form is enclosed with this Notice. You may also get a Proof of
Claim form on the internet at www.gcginc.com. Read the instructions carefully, fill out the
Proof of Claim form, include the documents the form asks for, sign it, and mail it in the
enclosed envelope postmarked no later than , 2011.
11. When Will I Receive My Payment?
The Court will hold a Settlement Hearing on , 2011, to decide whether to
approve the Settlement. If the Court approves the Settlement, there may be appeals. It is
always uncertain whether these appeals can be resolved, and resolving them can take time,
perhaps more than a year. Even if no appeals are filed, it will take several months for the
Claims Administrator to process all of the Proof of Claim forms and determine the ultimate
distribution amounts.
12. What Am I Giving Up to Receive a Payment?
As a Settlement Class Member, you will not be giving up any rights that you currently
have by submitting a Proof of Claim form to receive a payment. Unless you timely exclude
yourself from the Settlement Class by the [21 days prior to the Settlement Hearing]
, 2011 deadline, you are a Member of the Settlement Class and will be bound by
the Releases of claims against the Defendants. That means that you cannot sue, continue to sue,
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or be part of any other lawsuit against the Defendants or any other Released Persons about the
Released Claims in this case. It also means that all of the Court’s Orders will apply to you and
legally bind you and you will release your claims in this case against the Defendants and the
other Released Persons. The terms of the Releases are set forth in the Stipulation and
summarized in the Proof of Claim form that is enclosed.
EXCLUDING YOURSELF FROM THE CLASS ACTION SETTLEMENT
If you do not want a payment from the class action Settlement, but you want to keep the
right to sue or continue to sue the Defendants on your own for the Released Claims in the class
action, then you must take steps to get out of the Settlement Class. This is called excluding
yourself or is sometimes referred to as opting out of the Settlement Class.
13. How Do I Get Out of the Settlement Class?
To exclude yourself from the Settlement Class, you must send a letter by mail stating
that you want to be excluded from Crotteau v. Addus HomeCare Corporation et al., Civil
Action No. 10 C 1937 (VMK)(JC). You must include your name, address, telephone number,
your signature, and the number of shares of Addus common stock you purchased or acquired
between October 27, 2009 and March 18, 2010, inclusive, the number of shares sold during this
time period, if any, and the dates of such purchases and/or sales. You must mail your exclusion
request postmarked no later than , 2011 to:
Addus HomeCare Corporation Securities LitigationClaims Administratorc/o The Garden City Group, Inc.PO Box 9349Dublin, OH 43017-4249
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You cannot exclude yourself on the phone or by e-mail. If you ask to be excluded, you
are not eligible to receive any Settlement payment, and you cannot object to the class action
Settlement. If you exclude yourself, you may have the right to pursue litigation on your own.
14. If I Do Not Exclude Myself, Can I Sue the Defendants for the Same ThingLater?
No. Unless you exclude yourself from the Settlement Class, you give up any right to sue
the Defendants and the Released Persons for the Released Claims in the Settlement. If you have
a pending lawsuit against any of the Defendants, speak to your lawyer in that case immediately.
Remember, the exclusion deadline is [21 days prior to the Settlement Hearing] ,
2011.
15. If I Exclude Myself, Can I Receive Money from the Class ActionSettlement?
No. If you exclude yourself, do not send in a Proof of Claim form.
THE LAWYERS REPRESENTING YOU
16. Do I Have a Lawyer in This Case?
The Court appointed the law firm of Glancy Binkow & Goldberg LLP to represent you
and other Settlement Class Members. These lawyers are called Plaintiffs’ Lead Counsel. You
will not be personally liable for the fees and expenses incurred by these lawyers. If you want to
be represented by your own lawyer, you may hire one at your own expense.
17. How Will the Lawyers Be Paid?
Plaintiffs’ Lead Counsel will ask the Court for attorneys’ fees of one-fourth (1/4) of the
Settlement Fund and for expenses up to $45,000 which were advanced in connection with the
Litigation. Such sums as may be approved by the Court will be paid from the Settlement Fund.
Settlement Class Members are not personally liable for any such fees or expenses.
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The attorneys’ fees and expenses requested will be the only payment to Plaintiffs’ Lead
Counsel for their efforts in achieving this Settlement and for their risk in undertaking this
representation on a wholly contingent basis. Since the case began in March 2010, Plaintiffs’
Lead Counsel have conducted all of the investigation, briefing and motions practice necessary
to prepare the case for trial, and consulted experts regarding the damages. To date, Plaintiffs’
Lead Counsel have not been paid for their services in conducting this litigation on behalf of the
Plaintiffs and the Settlement Class, nor for their expenses. Plaintiffs’ Lead Counsel have
expended to date more than 650 hours of attorney time in prosecuting the Settlement Class’s
claims and have incurred almost $45,000 in out of pocket expenses in prosecuting the
Litigation. The fee requested will compensate Plaintiffs’ Lead Counsel for their work in
achieving the Settlement Fund.
Plaintiffs’ Lead Counsel shall file a formal motion with the District Court for approval
of the Settlement, the Plan of Allocation, and the request for attorneys’ fees and reimbursement
of expenses not later than 35 days prior to the Settlement Hearing. That motion will argue that
Lead Counsel’s requested fees are well within the range of fees awarded to class counsel under
similar circumstances in other cases of this type. The Court determines what counsel should
receive from the Settlement Fund for fees and expenses, and may award less than this amount.
OBJECTING TO THE SETTLEMENT
You can tell the Court that you do not agree with the Settlement or some part of it.
18. How Do I Tell the Court that I Do Not Like the Settlement?
If you are a Settlement Class Member, you can object to the Settlement if you do not
like any part of it, including the Plan of Allocation and the request for attorneys’ fees. You can
state the reasons why you think the Court should not approve it, and the Court will consider
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your views. To object, you must send a letter saying that you object to the Settlement in
Crotteau v. Addus HomeCare Corporation, et al., Civil Action No. 10 C 1937 (VMK)(JC). Be
sure to include your name, address, telephone number, your signature, the number of shares of
Addus common stock purchased and/or acquired between October 27, 2009 and March 18,
2010, inclusive, and the reasons you object. The motions in support of the Settlement and the
request for attorneys’ fees will be filed no later than [35 days prior to the Settlement Hearing]
, 2011, and they will be available from Plaintiffs’ Lead Counsel, the Claims
Administrator or the Court: their contact information is listed in Section 23, below. Any
objection must be mailed or delivered such that it is received by each of the following no later
than [21 days prior to the Settlement Hearing], , 2011:
Court:
Clerk of the CourtEverett McKinley Dirksen United States Courthouse219 South Dearborn StreetCourtroom 2319, Chambers 2378Chicago, IL 60604
Lead Counsel Designee:
Peter A. Binkow, Esq.Glancy Binkow & Goldberg LLP1801 Avenue of the Stars #311Los Angeles, California [email protected]
Defendants’ Counsel Designee:
Mary Ellen Hennessy, Esq.Katten Muchin Rosenman LLP525 West Monroe StreetChicago, IL 60661
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THE COURT’S SETTLEMENT HEARING
The Court will hold a hearing to decide whether to approve the Settlement. You may
attend and you may ask to speak, but you do not have to.
19. When and Where Will the Court Decide Whether to Approve theSettlement?
The Court will hold a Settlement Hearing at 9:00 a.m., on , 2011, before The
Honorable Virginia M. Kendall, at the Everett McKinley Dirksen United States Courthouse,
219 South Dearborn Street, Courtroom 2319, Chicago, IL 60604. At this hearing, the Court will
consider whether the Settlement is fair, reasonable and adequate. If there are objections, the
Court will consider them. The Court will also consider how much to pay to Plaintiffs’ Lead
Counsel and whether the Plan of Allocation is fair, reasonable and adequate. The Court may
decide these issues at the hearing or take them under consideration for a later decision.
20. Do I Have to Come to the Hearing?
No. Plaintiffs’ Lead Counsel will answer questions the Court may have. But, you are
welcome to come at your own expense. If you send an objection, you do not have to come to
Court to talk about it. As long as you mailed your written objection on time, the Court will
consider it. You may also pay your own lawyer to attend, but it is not necessary.
21. May I Speak at the Hearing?
You may ask the Court for permission to speak at the Settlement Hearing. To do so, you
must send a letter saying that it is your intention to appear in Crotteau v. Addus HomeCare
Corporation, et al., Civil Action No. 10 C 1937 (VMK)(JC). Be sure to include your name,
address, telephone number, your signature, the number of shares of Addus common stock
purchased and/or acquired between October 27, 2009 and March 18, 2010, inclusive. Your
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notice of intention to appear must be received no later than [21 days prior to the Settlement
Hearing], , 2011, by the Clerk of the Court, Lead Counsel Designee and
Defendants’ Counsel Designee, at the three addresses listed in Question 18.
IF YOU DO NOTHING
22. What Happens if I Do Nothing at All?
If you do nothing, all of your claims against the Defendants will be released, but you will
not receive any money from this Settlement because it is necessary to submit a Proof of Claim
and Release form.
GETTING MORE INFORMATION
23. Are There More Details About the Settlement?
This Notice summarizes the proposed Settlement. More details are in the Stipulation of
Settlement dated as of March 21, 2011. You can obtain a copy of the Stipulation of Settlement
or more information about the Settlement by contacting Plaintiffs’ Lead Counsel:
Peter A. Binkow, Esq.Glancy Binkow & Goldberg LLP1801 Avenue of the Stars, #311Los Angeles, California [email protected]
or the Claims Administrator:
Addus HomeCare Corporation Securities LitigationClaims Administratorc/o The Garden City Group, Inc.PO Box 9349Dublin, OH 43017-4249
or by visiting www.gcginc.com
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You can also obtain a copy from the Clerk’s office during regular business hours:
Clerk of the CourtEverett McKinley Dirksen United States Courthouse219 South Dearborn StreetCourtroom 2319, Chambers 2378Chicago, IL 60604
UNDERSTANDING YOUR PAYMENT
The Net Settlement Fund shall be distributed to Settlement Class Members who submit
acceptable Proof of Claim forms (“Authorized Claimants”) in the following manner-
a. The Claims Administrator shall determine each Authorized Claimant’s share of
the Net Settlement Fund based upon the recognized loss formula (the “Recognized Loss”)
described below. The Recognized Loss formula is intended to equitably apportion the Net
Settlement Fund among Settlement Class Members. The Recognized Loss formula is not an
estimate of what a Settlement Class Member would have recovered after trial; nor is it the
amount that the Authorized Claimant will be paid pursuant to the Settlement.
b. A Settlement Class Member’s actual share of the Net Settlement Fund will be
determined by the ratio of the Settlement Class Member’s Recognized Loss divided by the
aggregate of the Recognized Loss of all Settlement Class Members.
c. For shares bought and then sold between October 27, 2009, and March 18, 2010,
the Recognized Loss is zero.
For shares bought between October 27, 2009, and March 18, 2010, and sold on
or after March 19, 2010, but before final judgment of the Litigation, the Recognized Loss per
share is the lesser of-
A. 2.60;
B. The price paid less $6.30;
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C. The price paid less the price received.
For shares bought between October 27, 2009, and March 18, 2010 and not sold
before the day of final judgment of the Litigation, per share Recognized Loss is the lesser of:
A. $2.60;
B. The price paid less $6.30.
d. A purchase or sale of Addus common stock shall be deemed to have occurred on
the “contract” or “trade” date as opposed to the “settlement” or “payment” date.
e. The receipt or grant by gift, devise or operation of law of shares of Addus
common stock during the Settlement Class Period shall not be deemed a purchase or sale of
Addus common stock shares for the calculation of an Authorized Claimant’s Recognized Loss
nor shall it be deemed an assignment of any claim relating to the purchase of such securities.
The grantor of the gift or devise, who purchased Addus common stock during the Settlement
Class Period, shall retain the right to file a claim in this Litigation unless that right to file a
claim was specifically transferred in the instrument of gift or assignment.
f. The receipt of Addus common stock during the Settlement Class Period in
exchange for securities of any other corporation or entity shall not be deemed a purchase or sale
of Addus common stock.
g. Any gains on sales of Addus common stock shall be offset against losses in
calculating the Recognized Loss. To the extent a Claimant had an overall gain from
transactions in Addus common stock during the Settlement Class Period, the value of the
Recognized Loss will be zero.
h. No Authorized Claimant whose proportionate share of the Net Settlement Fund
is less than $20.00 shall receive a distribution from the Net Settlement Fund. Rather, that
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Claimant’s proportionate share of the Net Settlement Fund shall be redistributed among all
remaining Authorized Claimants.
i. Settlement Class Members who do not submit a timely request for exclusion and
do not submit an acceptable Proof of Claim by the deadline for submitting claims, will not share
in the recovery, but nevertheless will be bound by the Settlement and the Order and Final
Judgment of the Court dismissing this Litigation.
j. Distributions will be made to Authorized Claimants after all claims have been
processed and after the Court has finally approved the Settlement.
DO NOT TELEPHONE THE COURT REGARDING THIS NOTICE
SPECIAL NOTICE TO NOMINEES
The Court has ordered that if you held any Addus common stock purchased or acquired
between October 27, 2009 and March 18, 2010, inclusive, as nominee for a beneficial owner,
then, within twenty (20) days after you receive this Notice, you must either: (1) send a copy of
this Notice by first class mail to all such Persons; or (2) provide a list of the names and
addresses of such Persons to the Claims Administrator:
Addus HomeCare Corporation Securities LitigationClaims Administratorc/o The Garden City Group, Inc.PO Box 9349Dublin, OH 43017-4249
If you choose to mail the Notice and Proof of Claim form yourself, you may obtain from
the Claims Administrator (without cost to you) as many additional copies of these documents as
you will need to complete the mailing.
Regardless of whether you choose to complete the mailing yourself or elect to have the
mailing performed for you, you may obtain reimbursement for administrative costs actually
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incurred in connection with forwarding the Notice and which would not have been incurred but
for the obligation to forward the Notice, upon submission of appropriate documentation to the
Claims Administrator.
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EXHIBIT 4
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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)STEVE CROTTEAU, Individually and on )Behalf of All Others Similarly Situated, )
)Plaintiff, )
)v. ) Civil Action No. 10 C 1937 (VMK)(JC)
)ADDUS HOMECARE CORPORATION, )MARK S. HEANEY, FRANCIS J. )LEONARD, MARK L. FIRST, SIMON A. )BACHLEDA, W. ANDREW WRIGHT, III ) HONORABLE VIRGINIA M.STEVEN I. GERINGER, ROBERT W. ) KENDALLBAIRD & CO. INCORPORATED, )OPPENHEIMER & CO. INC., and )STEPHENS INC., )
)Defendants. )
)
EXHIBIT A-2
PROOF OF CLAIM AND RELEASE
1
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Must be Postmarked Addus HomeCare Corporation Securities Litigation
No Later ThanClaims Administrator
ADUc/o The Garden City Group, Inc.__________,2011 PO Box 9349
I IIIIIIII I IIIIIII VIII III VIII I I VIII III IIIIIIII VIII IIII III I II III IIII IIIIDublin, OH 43017-4249
1-800-231-1815
Claim Number: Control Number:
PROOF OF CLAIM AND RELEASE
MUST BE POSTMARKED NO LATER THAN , 2011
TABLE OF CONTENTS PAGE #
PART I - CLAIMANT IDENTIFICATION 2
PART II - TRANSACTIONS IN ADDUS HOMECARE CORPORATION COMMON STOCK 3
PART III - RELEASE & SIGNATURE 4
QUESTIONS? PLEASE CALL 1-800-231-1815 OR VISIT WWW.GCGINC.COM
Case: 1:10-cv-01937 Document #: 75-4 Filed: 03/21/11 Pa
2 111111 1 11
f
111 I II :5ii i111111111111111111111
PART I - CLAIMANT IDENTIFICATION
Claimant Name s) (as you would like the name(s) to appear on the check, if eligible for payment):
Account Number: (not required)
Last 4 digits of Claimant Social Security Number/Taxpayer ID Number:
Name of the Person you would like the Claims Administrator to Contact Regarding This Claim (if different from the Claimant Name(s) listed above):
Claimant or Representative Contact Information:The Claims Administrator will use this information for all communications relevant to this Claim (including the check, if eligiblefor payment). If this information changes, you MUST notify the Claims Administrator in writing at the address above.
Street Address:
City:
State and Zip Code:
Country Other than U.S.):
Daytime Telephone Number: ) - Evening Telephone Number: ) -
Email Address:
(Email address is not required, but if you provide it you authorize the Claims Administrator to use it in providing you with information relevant to this claim.)
NOTICE REGARDING ELECTRONIC FILES: Certain claimants with large numbers of transactions may request to, or may berequested to, submit information regarding their transactions in electronic files. To obtain the mandatory electronic filingrequirements and file layout, you may visit the website at www.gcginc.com or you may e-mail the Claims Administrator [email protected] . Any file not in accordance with the required electronic filing format will be subject to rejection. Noelectronic files will be considered to have been properly submitted unless the Claims Administrator issues an email afterprocessing your file with your claim numbers and respective account information. Do not assume that your file has been receivedor processed until you receive this email. If you do not receive such an email within 10 days of your submission, youshould contact the electronic filing department at [email protected] to inquire about your file and confirm it was receivedand acceptable.
NOTE: Separate Proofs of Claim should be submitted for each separate legal entity (e.g., a claim from Joint Owners should notinclude separate transactions of just one of the Joint Owners, an Individual should not combine his or her IRA transactions withtransactions made solely in the Individual’s name). Conversely, a single Proof of Claim should be submitted on behalf of onelegal entity including all transactions made by that entity no matter how many separate accounts that entity has (e.g., aCorporation with multiple brokerage accounts should include all transactions in Addus HomeCare Corporation common stock)during the Class Period on one Proof of Claim, no matter how many accounts the transactions were made in.
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3 PAP1111C/3*
PART II - TRANSACTIONS IN ADDUS HOMECARE CORPORATION COMMON STOCK
A. PURCHASES/ACQUISITIONS: List all purchases/acquisitions of Addus HomeCare Corporationcommon stock made between October 27, 2009 through March 18, 2010, inclusive. (Mustbe documented):
Trade Date(s) Number of Shares Purchase/Acquisition Total Purchase/Acquisition Price(List Chronologically) Purchased/Acquired Price Per Share (excluding commissions,
Month/Day/Year transfer taxes or other fees)
/ / I $ I. I $.
/ / I I I $ I. I $.
/ / I I I $ I. I $.
/ / I I I $ I. I $.
B. SALES: List all sales of Addus HomeCare Corporation common stock made between October 27, 2009through March 18, 2010, inclusive. (Must be documented):
Trade Date(s) Number of Sale Price Total Sale Price(List Chronologically) Shares Sold Per Share (excluding commissions,
Month/Day/Year transfer taxes or other fees)
/ / I I I $ I. I $. q
/ / I I I $ I. I $. q
/ / I I I $ I. I $. q
/ / I I I $ I. I $. q
C. UNSOLD HOLDINGS: State the number of shares of Addus HomeCare Corporationcommon stock owned at the close of trading on March 18, 2010. (Must I Ibe documented. If none, write “0” or zero):
IF YOU NEED ADDITIONAL SPACE TO LIST YOUR TRANSACTIONSPLEASE PHOTOCOPY THIS PAGE AND CHECK THIS BOX q
IF YOU DO NOT CHECK THIS BOX THESE ADDITIONAL PAGES MAY NOT BE REVIEWED
Case: 1:10-cv-01937 Document #: 75-4 Filed: 03/21/11 Page 6 of 7
TJURISDICTION F RT AND ACKNOWLEDGMENTS I III II III I I II 1111111111111111111111SUBMISSIONO O COURTI (We), submit this Proof of Claim and Release under the terms of the Stipulation of Settlement dated as of March 21, 2011 (“Stipulation of Settlement”)described in the Notice. I (We) also submit to the jurisdiction of the United States District Court for the Northern District of Illinois, Eastern Division, withrespect to my (our) claim as a Class Member (as defined in the Notice) and for purposes of enforcing the release set forth herein. I (We) furtheracknowledge that I am (we are) bound by and subject to the terms of any judgment that may be entered in the Litigation. I (We) agree to furnishadditional information to Plaintiffs’ Lead Counsel or the Claims Administrator to support this claim if required to do so. I (We) have not submitted anyother claim covering the same purchases/acquisitions or sales of Addus HomeCare Corporation common stock during the Class Period and know of noother Person having done so on my (our) behalf.DEFINITIONS1. “Defendants” means Addus HomeCare Corporation, Mark S. Heaney, Francis J. Leonard, Mark L. First, Simon A. Bachleda, W. Andrew Wright,III, Steven I. Geringer, Robert W. Baird & Co. Incorporated, Oppenheimer & Co. Inc., and Stephens Inc.2. “Released Person(s)” means each and all of Defendants, and/or any of their respective past, present or future, family members and spouses,parent entities, associates, affiliates or subsidiaries and each and all of their past, present, or future officers, directors, stockholders, representatives,employees, attorneys, financial or investment advisors, consultants, accountants, underwriters, investment banks or bankers, commercial bankers,insurers, reinsurers, excess insurers, co-insurers, engineers, advisors, principals or agents, heirs, executors, trustees, estates, beneficiaries, distributees,foundations, general or limited partners or partnerships, joint ventures, personal representatives, administrators, and each of their respectivepredecessors, successors, and assigns, and any trust of which any Defendant is the settlor or which is for the benefit of any Defendant and/or member(s)of his family.3. “Released Claims” means any and all claims (including Unknown Claims), demands, losses, rights, causes of action, liabilities, obligations,judgments, suits, matters, controversies and issues of any kind or nature whatsoever, whether known or unknown, contingent or absolute, suspected orunsuspected, disclosed or undisclosed, concealed or hidden, apparent or not apparent, accrued or unaccrued, matured or unmatured, liquidated or notliquidated, asserted or unasserted that have been or could have been asserted against Defendants or any of the Released Persons in the Litigation orin any court, tribunal, forum or proceeding (including, but not limited to, any claims arising under federal, state or foreign law, common law, statute, rule,or regulation relating to alleged fraud, breach of any duty, negligence, violations of the federal securities laws, or otherwise, and including all claimswithin the exclusive jurisdiction of the federal courts), whether individual, class, direct, derivative, representative, legal, equitable or any other type or inany other capacity, which Plaintiffs or any Member of the Settlement Class ever had, now has, or hereafter can, shall, or may have against Defendantsor any of the Released Persons by reason of, arising out of, relating to, involving or in connection with, directly or indirectly the allegations, conduct, facts,events, practices, transactions, acts, occurrences, statements, representations, alleged misrepresentations, alleged omissions, or any other matter, thingor cause whatsoever, or any series thereof, that were, could have been or in the future might be alleged, claimed, asserted, embraced, involved, or setforth, referred to in or otherwise related to, directly or indirectly, the Litigation or subject matter of the Litigation, including without limitation, the documentsfiled with or provided to the Securities and Exchange Commission and all any disclosures or alleged non-disclosures made by Defendants in connectionwith any of the foregoing, except claims to enforce the Settlement.4. “Unknown Claims” means any Released Claims which Plaintiffs or any Settlement Class Member does not know or suspect to exist in his, heror its favor at the time of the release of the Released Persons which, if known by him, her or it, might have affected his, her or its settlement with andrelease of the Released Persons, or might have affected his, her or its decision not to object to this settlement. Unknown Claims include those claimsin which some or all of the facts comprising the claim may be suspected, or even undisclosed or hidden. With respect to any and all Released Claims,the Settling Parties stipulate and agree that, upon the Effective Date, Plaintiffs shall expressly waive, and each of the Settlement Class Members shallbe deemed to have, and by operation of the Judgment shall have, expressly waived the provisions, rights, and benefits of California Civil Code § 1542,which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXISTIN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATE-RIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
Plaintiffs shall expressly waive, and each of the Settlement Class Members shall be deemed to have, and by operation of the Judgment shall have,expressly waived any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of commonlaw or foreign law, which is similar, comparable or equivalent in effect to California Civil Code § 1542. Plaintiffs and Settlement Class Members may here-after discover facts in addition to or different from those which he, she or it now knows or believes to be true with respect to the subject matter of theReleased Claims, but Plaintiffs shall expressly and each Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operationof the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected,contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity nowexisting or coming into existence in the future, including, but not limited to, conduct which is negligent, reckless, intentional, with or without malice, or abreach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. Plaintiffs acknowledge, andthe Settlement Class Members shall be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver was separately bargainedfor and a key element of the settlement of which this release is a part.RELEASE1. I (We) hereby acknowledge full and complete satisfaction of, and do hereby fully, finally, and forever settle, release, relinquish and discharge,all of the Released Claims against each and all of the Defendants and each and all of the “Released Persons”.2. This Release shall be of no force or effect unless and until the Court approves the Stipulation of Settlement and it becomes effective on theEffective Date.3. I (We) hereby warrant and represent that I (we) have not assigned or transferred or purported to assign or transfer, voluntarily or involuntarily,any matter released pursuant to this Release or any other part or portion thereof.CERTIFICATIONUnder penalty of perjury, I (we) hereby certify and represent that I (we) have included information about all of my (our) transactions in Addus HomeCareCorporation common stock that occurred during the Class Period and through and including March 18, 2010, as well as the number of shares of AddusHomeCare Corporation common stock held by me (us) at the close of trading on March 18, 2010, and that such information is true and correct to thebest of my (our) knowledge. By executing this certification, I (we) acknowledge and agree to be bound by the Release set forth above.Executed this day of , in , .
(Month/Year) (City) (State/Country)
Signature of Claimant
Print Name of Claimant Date
Signature of Joint Claimant, if any
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REMINDER CHECKLIST
1. Please sign the Certification Section of the Proof of Claim Form and Release.
2. If this Claim is being made on behalf of Joint Claimants, then both must sign.
3. For an overview of what constitutes adequate supporting documentationplease visit www.gcginc.com/pages/cases/filing-tips.php.
4. DO NOT SEND ORIGINALS OF ANY SUPPORTING DOCUMENTS.
5. Keep a copy of your Proof of Claim Form and Release and all documentationsubmitted for your records.
6. The Claims Administrator will acknowledge receipt of your Proof of Claim Formand Release by mail or email within 60 days. Your claim is not deemed fileduntil you receive an acknowledgment postcard. If you do not receive anacknowledgment postcard within 60 days, please call the Claims Administratortoll free at 1-800-231-1815.
7. If you move, please send us your new address to:
Addus HomeCare Corporation Securities LitigationClaims Administrator
c/o The Garden City Group, Inc.PO Box 9349
Dublin, OH 43017-4249
8. Do not use highlighter on the Proof of Claim Form and Release orsupporting documentation.
THIS PROOF OF CLAIM MUST BE POSTMARKED NO LATER THAN , 2011 AND MUST BE MAILED TO:
Addus HomeCare Corporation Securities LitigationClaims Administrator
c/o The Garden City Group, Inc.PO Box 9349
Dublin, OH 43017-4249
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EXHIBIT 5
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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEVE CROTTEAU, Individually and onBehalf of All Others Similarly Situated,
Plaintiff,
v. Civil Action No. 10 C 1937 (VMK)(JC
ADDUS HOMECARE CORPORATION,MARK S. HEANEY, FRANCIS J. The Honorable Virginia M. KendallLEONARD, MARK L. FIRST, SIMON A.BACHLEDA, W. ANDREW WRIGHT, III,STEVEN I. GERINGER, ROBERT W.BAIRD & CO. INCORPORATED,OPPENHEIMER & CO. INC., andSTEPHENS INC.,
Defendants.
EXHIBIT A-3
SUMMARY NOTICE
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TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED ADDUSHOMECARE CORPORATION COMMON STOCK BETWEEN OCTOBER 27, 2009AND MARCH 18, 2010, INCLUSIVE.
YOU ARE HEREBY NOTIFIED, pursuant to an Order of the United States District
Court for the Northern District of Illinois, Eastern Division, that a hearing will be held on
, 2011, at 9:00 a.m., before The Honorable Virginia M. Kendall, at the Everett
McKinley Dirksen United States Courthouse, 219 South Dearborn Street, Courtroom 2319,
Chicago, IL 60604, for the purpose of determining (1) whether the proposed Settlement of the
claims in the Litigation for the sum of $3.0 million in cash should be approved by the Court as
fair, reasonable and adequate to Members of the Settlement Class; (2) whether to certify the
Settlement Class; (3) whether, thereafter, this Litigation should be dismissed with prejudice
pursuant to the terms and conditions set forth in the Stipulation of Settlement dated March 21,
2011; (4) whether the proposed plan to distribute the settlement proceeds (the “Plan of
Allocation”) is fair, reasonable and adequate and therefore should be approved; and (5) whether
the application of Plaintiffs’ Lead Counsel for the payment of attorneys’ fees and expenses
incurred in connection with this Litigation should be approved.
If you purchased or acquired Addus HomeCare Corporation common stock between
October 27, 2009 and March 18, 2010, inclusive, your rights may be affected by this Settlement.
If you have not received a detailed Notice of Proposed Settlement of Class Action, Motion for
Attorneys’ Fees and Settlement Hearing (the “Notice”) and a copy of the Proof of Claim and
Release form, you may obtain copies by writing to Addus HomeCare Corporation Securities
Litigation, Claims Administrator, c/o The Garden City Group, Inc., PO Box 9349, Dublin, OH
43017-4249, or you can download a copy at www.gcginc.com . If you are a Settlement Class
Member, in order to share in the distribution of the Net Settlement Fund, you must submit a
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Proof of Claim and Release form postmarked no later than , 2011, establishing
that you are entitled to recovery.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK’S OFFICE
REGARDING THIS NOTICE. If you have any questions about the Settlement, you may
contact Plaintiffs’ Lead Counsel at the address listed below:
Peter A. Binkow, Esq.Glancy Binkow & Goldberg LLP1801 Avenue of the Stars #311Los Angeles, California [email protected]
or go to the following website: www.gcginc.com
DATED:
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EXHIBIT 6
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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
STEVE CROTTEAU, Individually and onBehalf of All Others Similarly Situated,
Plaintiff,
v. Civil Action No. 10 C 1937 (VMK)(JC)
ADDUS HOMECARE CORPORATION,MARK S. HEANEY, FRANCIS J. The Honorable Virginia M. KendallLEONARD, MARK L. FIRST, SIMON A.BACHLEDA, W. ANDREW WRIGHT, III,STEVEN I. GERINGER, ROBERT W.BAIRD & CO. INCORPORATED,OPPENHEIMER & CO. INC., andSTEPHENS INC.,
Defendants.
EXHIBIT B
FINAL JUDGMENTAND ORDER OF DISMISSAL WITH PREJUDICE
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This matter came before the Court for hearing pursuant to an Order of this Court, dated
___, 2011, on the application of the Parties for approval of the Settlement set forth
in the Stipulation of Settlement dated as of March 21, 2011, (the “Stipulation”). Due and
adequate notice having been given of the Settlement as required in said Order, and the Court
having considered all papers filed and proceedings held herein and otherwise being fully
informed in the premises and good cause appearing therefore, IT IS HEREBY ORDERED,
ADJUDGED AND DECREED that:
1. This Judgment incorporates by reference the definitions in the Stipulation, and all
terms used herein shall have the same meanings set forth in the Stipulation.
2. This Court has jurisdiction over the subject matter of the Litigation and over all
Parties to the Litigation, including all Members of the Settlement Class who did not timely file a
Request for Exclusion from the Settlement Class by the , 2011, deadline pursuant to
the Court’s Order dated , 2011.
3. The Court certifies this action as a class action and finds that the prerequisites for
a class action under Rules 23(a) and (b)(3) of the Federal Rules of Civil Procedure have been
satisfied in that: (a) the number of Settlement Class Members is so numerous that joinder of all
members thereof is impracticable; (b) there are questions of law and fact common to the
Settlement Class; (c) the claims of the Court appointed Class Representative, Kermit Stumbo, are
typical of the claims of the Settlement Class he represents; (d) the Class Representative has and
will continue to fairly and adequately represent the interests of the Settlement Class; (e) the
questions of law and fact common to the Members of the Settlement Class predominate over any
questions affecting only individual Members of the Settlement Class; and (f) a class action is
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superior to other available methods for the fair and efficient adjudication of the controversy.
Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby finally certifies
this action as a class action on behalf of all persons or entities who purchased or otherwise
acquired the common stock of Addus HomeCare Corporation between October 27, 2009 and
March 18, 2010, inclusive, and were purportedly damaged thereby. Excluded from the
Settlement Class are Defendants herein, the officers and directors of Addus HomeCare
Corporation, members of their immediate families, and the heirs, successors or assigns of any of
the foregoing. Also excluded from the Settlement Class are persons and entities who submitted
valid and timely requests for exclusion in accordance with the Notice, who are listed on Schedule
1 hereto.
4. The distribution of the Notice and the publication of the Summary Notice, as
provided for in the Notice Order dated , 2011, constituted the best notice practicable
under the circumstances, including individual notice to all Members of the Settlement Class who
could be identified through reasonable effort. Said notices 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 notices, and said
notices fully satisfied the requirements of Federal Rule of Civil Procedure 23, Section 21D(a)(7)
of the Securities Exchange Act of 1934, the requirements of Due Process, and any other
applicable law.
5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby
approves the Settlement set forth in the Stipulation and finds that said Settlement is, in all
respects, fair, reasonable and adequate to, and is in the best interests of the Plaintiffs, the Class
and each of the Class Members. This Court further finds the Settlement set forth in the
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Stipulation is the result of arm’s-length negotiations between experienced counsel representing
the interests of the Plaintiffs, Class Members and the Defendants. Accordingly, the Settlement
embodied in the Stipulation is hereby approved in all respects and shall be consummated in
accordance with its terms and provisions. The Parties are hereby directed to perform the terms
of the Stipulation.
6. Except as to any individual claim of those Persons (identified in Schedule 1
attached hereto), who timely requested exclusion from the Settlement Class before the
, 2011 deadline, the Litigation and all claims contained therein, including all of the
Released Claims, are dismissed with prejudice as to the Plaintiffs and the other Class Members,
and as against each and all of the Released Persons. The Parties are to bear their own costs,
except as otherwise provided in the Stipulation.
7. Upon the Effective Date, the Plaintiffs and each of the Class Members (other than
those Persons listed on Schedule 1 who have timely and validly requested exclusion from the
Settlement Class) shall be deemed to have, and by operation of the Judgment shall have, fully,
finally, and forever released, relinquished and discharged Defendants and all Released Persons
from all claims (including Unknown Claims), demands, losses, rights, causes of action,
liabilities, obligations, judgments, suits, matters, controversies and issues of any kind or nature
whatsoever, whether known or unknown, contingent or absolute, suspected or unsuspected,
disclosed or undisclosed, concealed or hidden, apparent or not apparent, accrued or unaccrued,
matured or unmatured, liquidated or not liquidated, asserted or unasserted that have been or
could have been asserted against Defendants or any of the Released Persons in the Litigation or
in any court, tribunal, forum or proceeding (including, but not limited to, any claims arising
under federal, state or foreign law, common law, statute, rule, or regulation relating to alleged
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fraud, breach of any duty, negligence, violations of the federal securities laws, or otherwise, and
including all claims within the exclusive jurisdiction of the federal courts), whether individual,
class, direct, derivative, representative, legal, equitable or any other type or in any other capacity,
which Plaintiffs or any Member of the Settlement Class ever had, now has, or hereafter can,
shall, or may have against Defendants or any of the Released Persons by reason of, arising out
of, relating to, involving or in connection with, directly or indirectly, the allegations, conduct,
facts, events, practices, transactions, acts, occurrences, statements, representations, alleged
misrepresentations, alleged omissions, or any other matter, thing or cause whatsoever, or any
series thereof, that were, could have been or in the future might be alleged, claimed, asserted,
embraced, involved, or set forth, referred to in or otherwise related to, directly or indirectly, the
Litigation or subject matter of the Litigation, including without limitation, the documents filed
with or provided to the Securities and Exchange Commission and all any disclosures or alleged
non-disclosures made by Defendants in connection with any of the foregoing, except claims to
enforce the Settlement, whether or not such Class Member executes and delivers a Proof of
Claim form.
8. Upon the Effective Date hereof, each of the Released Persons shall be deemed to
have, and by operation of this Judgment shall have, fully, finally, and forever released,
relinquished and discharged Plaintiffs, each and all of the Class Members and Plaintiffs’ Lead
Counsel from all claims (including Unknown Claims), arising out of, relating to, or in connection
with the institution, prosecution, assertion, settlement or resolution of the Litigation or the
Released Claims.
9. Any further orders or proceedings solely regarding the Plan of Allocation shall in
no way disturb or affect this Judgment and shall be separate and apart from this Judgment.
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10. Neither the Stipulation nor the Settlement contained therein, nor any act
performed or document executed pursuant to or in furtherance of the Stipulation or the
Settlement: (a) is or may be deemed to be or may be used as an admission of, or evidence of, the
validity of any Released Claim, or of any wrongdoing or liability of the Defendants; or (b) is or
may be deemed to be or may be used as an admission of, or evidence of, any fault or omission of
any of the Released Persons in any civil, criminal or administrative proceeding in any court,
administrative agency or other tribunal. The Released Persons may file the Stipulation and/or
the Judgment in any other action that may be brought against them in order to support a defense
or counterclaim based on principles of res judicata, collateral estoppel, release, good faith
settlement, judgment bar or reduction or any other theory of claim preclusion or issue preclusion
or similar defense or counterclaim.
11. Without affecting the finality of this Judgment in any way, this Court hereby
retains continuing jurisdiction over: (a) implementation of this Settlement and any award or
distribution of the Settlement Fund, including interest earned thereon; (b) disposition of the
Settlement Fund; (c) hearing and determining applications for attorneys’ fees and expenses in the
Litigation; and (d) all Parties hereto for the purpose of construing, enforcing and administering
the Stipulation of Settlement.
12. The Court finds that during the course of the Litigation, the Parties and their
respective counsel at all times complied with the requirements of Federal Rule of Civil
Procedure 11.
13. In the event that the Settlement does not become effective in accordance with the
terms of the Stipulation or the Effective Date does not occur, or in the event that the Settlement
Fund, or any portion thereof, is returned to the Defendants, then this Judgment shall be rendered
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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.
14. The Court hereby GRANTS Plaintiffs’ Lead Counsel attorneys’ fees of
% of the Settlement Fund and expenses in an amount of $ ,
together with the interest earned thereon for the same time period and at the same rate as that
earned on the Settlement Fund until paid. The Court finds that the amount of fees awarded is fair
and reasonable in light of the time and labor required, the novelty and difficulty of the case, the
skill required to prosecute the case, the experience and ability of the attorneys, awards in similar
cases, the contingent nature of the representation and the result obtained for the Settlement Class.
Said fees shall be allocated among Plaintiffs’ counsel in a manner which, in their good-faith
judgment, reflects each counsel’s contribution to the institution, prosecution and resolution of the
Litigation.
The awarded attorneys’ fees and expenses, and interest earned thereon, shall be paid to
Plaintiffs’ 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.
DATED: The Honorable Virginia M. KendallUnited States District Judge
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SCHEDULE 1
List of Persons Excluded from the Class in
Crotteau v. Addus HomeCare Corporation, et al.,
Civil Action No. 10 C 1937 (VMK)(JC)
The following Persons, and only the following Persons, properly excluded themselvesfrom the Settlement Class by the , 2011, deadline pursuant to the Court’s Orderdated , 2011:
IN RESPONSE TO THE NOTICE OFPROPOSED SETTLEMENT OF CLASS ACTION
1
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EXHIBIT 7
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UNITED STATES DISTRICT COURTNORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
)STEVE CROTTEAU, Individually and on )Behalf of All Others Similarly Situated, )
)Plaintiff, )
)v. ) Civil Action No. 10 C 1937 (VMK)(JC)
)ADDUS HOMECARE CORPORATION, )MARK S. HEANEY, FRANCIS J. )LEONARD, MARK L. FIRST, SIMON A. )BACHLEDA, W. ANDREW WRIGHT, III ) HONORABLE VIRGINIA M.STEVEN I. GERINGER, ROBERT W. ) KENDALLBAIRD & CO. INCORPORATED, )OPPENHEIMER & CO. INC., and )STEPHENS INC., )
)Defendants. )
)
DECLARATION OF PETER A. BINKOW IN SUPPORT OF PLAINTIFFS’UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT AND
CONDITIONAL CERTIFICATION OF A CLASS
Case: 1:10-cv-01937 Document #: 75-7 Filed: 03/21/11 Page 3 of 16 PageID #:552
i
I, Peter A. Binkow, hereby declare as follows:
1. I am a member in good standing of the bar of the State of California, and I am
admitted pro hac vice in the above-captioned litigation.i
2. I am a partner of the law firm Glancy, Binkow & Goldberg LLP, Court appointed
Lead Counsel for Lead Plaintiff Kermit Stumbo ("Lead Plaintiff'), and the proposed Class. I
have personal knowledge of the matters stated herein and, if called upon, I could and would
testify competently thereto.
3. I submit this Declaration, together with the attached exhibit, in support of Lead
Plaintiff's Motion for Preliminary Approval of Settlement and Conditional Certification of a
Class.
4. Attached as Exhibit A is a true and correct copy of the firm resume of Glancy,
Binkow & Goldberg LLP, proposed Class Counsel who are experienced in complex securities
class action litigation.
I declare under penalty of perjury under the laws of the United States of America that the
foregoing facts are true and correct.
Executed. this 21 s` day of March, 2011, at Los Angeles, California.
^ r
Peter A. Binkowl^
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EXHIBIT A
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GLANCY BINKOW & GOLDBERG LLP
ATTORNEYS AT LAW
New York Office 1801 AVENUE OF THE STARS, SUITE 311 SAN FRANCICSO OFFICE
LOS ANGELES, CALIFORNIA 900671430 BROADWAY ONE EMBARCADERO CENTER
SUITE 1603 SUITE 760NEW YORK, NY 10018 SAN FRANCISCO, CA 94105
TELEPHONE (212) 382-2221 TELEPHONE (310) 201-9150 TELEPHONE (415) 972-8160FACSIMILE (212) 382-3944 FACSIMILE (310) 201-9160 FACSIMILE (415) 972-8166
FIRM RESUME
Glancy Binkow & Goldberg LLP has represented investors, consumers and employees infederal and state courts throughout the United States for sixteen years. Based in Los Angeles,California and with offices in New York, New York and San Francisco, California, Glancy Binkow& Goldberg has developed expertise prosecuting securities fraud, antitrust and complex commerciallitigation. As Lead Counsel or as a member of Plaintiffs’ Counsel Executive Committees, GlancyBinkow & Goldberg has recovered in excess of $1 billion for parties wronged by corporate fraud andmalfeasance. The firm’s efforts on behalf of individual investors have been the subject of articlesin such publications as The Wall Street Journal, The New York Times and The Los Angeles Times.
Appointed as Lead or Co-Lead Counsel by federal judges throughout the United States,Glancy Binkow & Goldberg has achieved significant recoveries for class members, including:
In re Mercury Interactive Corporation Securities Litigation, USDC Northern District of California,Case No. 05-3395, in which Glancy Binkow & Goldberg served as Co-Lead Counsel and achieveda settlement valued at over $117 million.
In re Real Estate Associates Limited Partnership Litigation, USDC Central District of California,Case No. 98-7035 DDP, in which the firm served as local counsel and plaintiffs achieved a $184million jury verdict after a complex six week trial in Los Angeles, California and later settled thecase for $83 million.
In re Lumenis, Ltd. Securities Litigation, USDC Southern District of New York, Case No.02-CV-1989, in which Glancy Binkow & Goldberg served as Co-Lead Counsel and achieved a settlementvalued at over $20 million.
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In re Heritage Bond Litigation, USDC Central District of California, Case No. 02-ML-1475-DT,where as Co-Lead Counsel, Glancy Binkow & Goldberg recovered in excess of $28 million fordefrauded investors and continues to pursue additional defendants.
In re ECI Telecom Ltd. Securities Litigation, USDC Eastern District of Virginia, Case No. 01-913 -A,in which Glancy Binkow & Goldberg served as sole Lead Counsel and recovered almost $22 millionfor defrauded ECI investors.
Jenson v. First Trust Corporation, USDC Central District of Californaia, Case No. 05-cv-3124-ABC,in which the firm was appointed sole lead counsel and achieved an $8.5 million settlement in a verydifficult case involving a trustee’s potential liability for losses incurred by investors in a Ponzischeme. Kevin Ruf of the firm also successfully defended in the 9th Circuit Court of Appeals the trialcourt’s granting of class certification in this case.
Yaldo v. Airtouch Communications, State of Michigan, Wayne County, Case No. 99-909694-CP,in which Glancy Binkow & Goldberg served as Co-Lead Counsel and achieved a settlement valuedat over $32 million for defrauded consumers.
In re Infonet Services Corporation Securities Litigation, USDC Central District of California, CaseNo. CV 01-10456 NM, in which as Co-Lead Counsel, Glancy Binkow & Goldberg achieved asettlement of $18 million.
In re Musicmaker.com Securities Litigation, USDC Central District of California, Case No. 00-02018, a securities fraud class action in which Glancy Binkow & Goldberg was sole Lead Counselfor the Class and recovered in excess of $13 million.
In re ESC Medical Systems, Ltd. Securities Litigation, USDC Southern District of New York, CaseNo. 98 Civ. 7530, a securities fraud class action in which Glancy Binkow & Goldberg served as soleLead Counsel for the Class and achieved a settlement valued in excess of $17 million.
In re Lason, Inc. Securities Litigation, USDC Eastern District of Michigan, Case No. 99 76079, inwhich Glancy Binkow & Goldberg was Co-Lead Counsel and recovered almost $13 million fordefrauded Lason stockholders.
In re Inso Corp. Securities Litigation, USDC District of Massachusetts, Case No. 99 10193, asecurities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel forthe Class and achieved a settlement valued in excess of $12 million.
In re National TechTeam Securities Litigation USDC Eastern District of Michigan, Case No. 97-74587, a securities fraud class action in which Glancy Binkow & Goldberg served as Co-LeadCounsel for the Class and achieved a settlement valued in excess of $11 million.
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In re Ramp Networks, Inc. Securities Litigation, USDC Northern District of California, Case No.C-00-3645 JCS, a securities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel for the Class and achieved a settlement of nearly $7 million.
In re Gilat Satellite Networks, Ltd. Securities Litigation, USDC Eastern District of New York, CaseNo. 02-1510 CPS, a securities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel for the Class and achieved a settlement of $20 million.
Taft v. Ackermans (KPNQwest Securities Litigation), USDC Southern District of New York, CaseNo. 02-CV-07951, a securities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel for the Class and achieved a settlement worth $11 million.
Ree v. Procom Technologies, Inc., USDC Southern District of New York, Case No. 02CV7613,a securities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel forthe Class and achieved a settlement of $2.7 million.
Capri v. Comerica, Inc., USDC Eastern District of Michigan, Case No. 02CV60211 MOB, asecurities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel forthe Class and achieved a settlement of $6.0 million.
Tatz v. Nanophase Technologies Corp., USDC Northern District of Illinois, Case No. 01C8440, asecurities fraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel forthe Class and achieved a settlement of $2.5 million.
In re Livent, Inc. Noteholders Litigation, USDC Southern District of New York, Case No. 99 Civ9425, a securities fraud class action in which Glancy Binkow & Goldberg served as Co-LeadCounsel for the Class and achieved a settlement of over $27 million.
Plumbing Solutions Inc. v. Plug Power, Inc., USDC Eastern District of New York, Case No. CV 005553 (ERK) (RML), a securities fraud class action in which Glancy Binkow & Goldberg served asCo-Lead Counsel for the Class and achieved a settlement of over $5 million.
Schleicher v. Wendt ,(Conseco Securities Litigation), USDC Southern District of Indiana, Case No.02-1332 SEB, a securities fraud class action in which Glancy Binkow & Goldberg served as LeadCounsel for the Class and achieved a settlement of over $41 million.
Lapin v. Goldman Sachs, USDC Southern District of New York, Case No. 03-0850-KJD, a securitiesfraud class action in which Glancy Binkow & Goldberg served as Co-Lead Counsel for the Class andachieved a settlement of $29 million.
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Glancy Binkow & Goldberg filed the initial landmark antitrust lawsuit against all of themajor NASDAQ market makers and served on Plaintiffs’ Counsel’s Executive Committee in In re Nasdaq Market-Makers Antitrust Litigation, USDC Southern District of New York, Case No. 94 C3996 (RWS), MDL Docket No. 1023, which recovered $900 million for investors in numerousheavily traded Nasdaq issues.
The firm currently serves as Lead or Co-Lead Counsel in numerous securities fraud andconsumer fraud actions throughout the United States, including, among others:
Senn v. Sealed Air Corporation, USDC New Jersey, Case No. 03-cv4372, in which the firm acts asco-lead counsel (the case has tentatively settled).
Shah v. Morgan Stanley Co.,USDC Southern District of New York, Case No. 03 Civ. 8761 (RJH)
Payne v. IT Group, Inc.,USDC Western District of Pennsylvania, Case No. 02-1927
Winer Family Trust v. Queen (Pennexx Securities Litigation),USDC Eastern District of Pennsylvania, Case No. 2:03-cv-04318 JP
In re ADC Telecommunications Inc. Securities Litigation,USDC District of Minnesota, Case No. 03-1194 (JNE/JGL)
In re Simon Transportation Services, Inc. Securities Litigation,USDC District of Utah, Case No. 2:98 CV 0863 K
The firm has also previously acted as Class Counsel in obtaining substantial benefits forshareholders in a number of actions, including:
In re F & M Distributors Securities Litigation,Eastern District of Michigan, Case No. 95 CV 71778 DT (Executive Committee Member) ($20.25million settlement)
James F. Schofield v. McNeil Partners, L.P. Securities Litigation,California Superior Court, County of Los Angeles, Case No. BC 133799
Resources High Equity Securities Litigation,California Superior Court, County of Los Angeles, Case No. BC 080254
The firm has served and currently serves as Class Counsel in a number of antitrust classactions, including:
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In re Nasdaq Market-Makers Antitrust Litigation,USDC Southern District of New York, Case No. 94 C 3996 (RWS), MDL Docket No. 1023
In re Brand Name Prescription Drug Antitrust Litigation,USDC Northern District of Illinois, Eastern Division, Case No. 94 C 897
The firm has served and currently serves as Class Counsel in a number of wage and hourclass actions, including:
Smith v. L’Oreal, Los Angeles Superior Court, Case No. BC 284690, in which firm partner KevinRuf successfully argued before the California Supreme Court and achieved the reversal of lowercourt holdings which could have curtailed employee rights to prompt payment of wages.
Mathews v. American Laser Centers, USDC Eastern District of Michigan, Case No. 2:08-cv-1063 8,in which the firm represents employees of ALC who contend they are entitled to unpaid overtimeand other benefits.
Baldwin v. Johnny Rockets, Los Angeles Superior Court, Case No. BC 385539, in which the firmrepresents a class of restaurant managers who contend they are entitled to overtime and other benefitsbecause they were improperly classified by their employer as “exempt” from such benefits.
Jenkin v. Sunglass Hut, USDC Central District of California, Case No. CV08-5394, in which thefirm represents Sunglass Hut employees who contend they were denied meal and rest breaks andother compensation.
Bousquet v. Cerritos Ford, Los Angeles Superior Court, Case No. BC 354026, in which the firmrepresents mechanics claiming unpaid overtime.
Paredes v. Pacific Ford, Los Angeles Superior Court, Case No. BC 372598, in which the firmrepresents mechanics claiming unpaid overtime.
The firm currently also serves as Interim Co-Lead Counsel in In re Nokia, Inc. ERISALitigation, USDC Southern District of New York, Case No. 10-CV-03306-PKC. This consolidatedaction is brought pursuant to the Employee Retirement Income Security Act of 1974 on behalf ofparticipants and beneficiaries of the Nokia Retirement Savings and Investment Plan from January1, 2008 through the present seeking to recover losses to the Plan as a result of its investments inNokia stock.
Glancy Binkow & Goldberg LLP has been responsible for obtaining favorable appellateopinions which have broken new ground in the class action or securities fields, or which havepromoted shareholder rights in prosecuting these actions. Glancy Binkow & Goldberg successfullyargued the appeals in a number of cases.
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In Smith v. L’Oreal, 39 Cal.4th 77 (2006), firm partner Kevin Ruf established ground-breaking law when the California Supreme Court agreed with the firm’s position that waitingpenalties under the California Labor Code are available to any employee after termination ofemployment, regardless of the reason for that termination.
Other notable firm cases are: Silber v. Mabon I, 957 F.2d 697 (9th Cir. 1992) and Silber v. Mabon II, 18 F.3d 1449 (9th Cir. 1994), which are the leading decisions in the Ninth Circuitregarding the rights of opt-outs in class action settlements. In Rothman v. Gregor, 220 F.3d 81 (2dCir. 2000), Glancy Binkow & Goldberg won a seminal victory for investors before the SecondCircuit Court of Appeals, which adopted a more favorable pleading standard for investors inreversing the District Court’s dismissal of the investors’ complaint. After this successful appeal,Glancy Binkow & Goldberg then recovered millions of dollars for defrauded investors of the GTInteractive Corporation. The firm also argued Falkowski v. Imation Corp., 309 F.3d 1123 (9th Cir.2002), as amended, 320 F.3d 905 (9th Cir. 2003) and favorably obtained the substantial reversal ofa lower court’s dismissal of a cutting edge, complex class action initiated to seek redress for a groupof employees whose stock options were improperly forfeited by a giant corporation in the course ofits sale of the subsidiary at which they worked. The revived action is currently proceeding in theCalifornia state court system.
The firm is also involved in the representation of individual investors in court proceedingsthroughout the United States and in arbitrations before the American Arbitration Association,National Association of Securities Dealers, New York Stock Exchange, and Pacific Stock Exchange.Mr. Glancy has successfully represented litigants in proceedings against such major securities firmsand insurance companies as A.G. Edwards & Sons, Bear Stearns, Merrill Lynch & Co., MorganStanley, PaineWebber, Prudential, and Shearson Lehman Brothers.
One of firm’s unique skills is the use of “group litigation” - the representation of groups ofindividuals who have been collectively victimized or defrauded by large institutions. This type oflitigation brought on behalf of individuals who have been similarly damaged often provides anefficient and effective economic remedy that frequently has advantages over the class action orindividual action devices. The firm has successfully achieved results for groups of individuals incases against major corporations such as Metropolitan Life Insurance Company, and OccidentalPetroleum Corporation.
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Glancy Binkow & Goldberg LLP currently consists of the following attorneys:
THE FIRM’S PARTNERS
LIONEL Z. GLANCY, a graduate of the University of Michigan Law School, is the foundingpartner of the firm. After serving as a law clerk for United States District Judge Howard McKibben,he began his career as an associate at Patterson Belknap Webb & Tyler LLP, concentrating insecurities litigation. Thereafter, he started a boutique law firm specializing in securities litigation,and other complex litigation, from the Plaintiff’s perspective. Mr. Glancy has established adistinguished career in the field of securities litigation over the last fifteen years, appearing as leadcounsel on behalf of aggrieved investors in securities class action cases throughout the country. Hehas appeared and argued before dozens of district courts and several appellate courts, and hasrecovered billions of dollars in settlement proceeds for large classes of shareholders. Well knownin securities law, he has lectured on its developments and practice at CLE seminars and law schools.
PETER A. BINKOW, a partner in Glancy Binkow & Goldberg, was born in Detroit, Michigan onAugust 16, 1965. Mr. Binkow earned his degree in English Literature from the University ofMichigan in1988 and attended law school at the University of Southern California (J.D., 1994). Mr.Binkow joined the Law Offices of Lionel Z. Glancy upon graduation and became a partner in 2002.
Mr. Binkow has prosecuted lawsuits on behalf of consumers and investors in state and federal courtsthroughout the United States. He has served as Lead or Co-Lead Counsel in many class action cases,including In re Mercury Interactive Corp Securities Litigation ($117.5 million recovery), In reLumenis Ltd Securities Litigation ($20.1 million recovery), In re Heritage Bond Litigation ($28million recovery), In re National Techteam Securities Litigation ($11 million recovery), In re CreditAcceptance Corporation Securities Litigation ($2.5 million recovery), In re Lason Inc. Securities Litigation ($12.68 million recovery), In re ESC Medical Systems, Ltd. Securities Litigation ($17million recovery) In re GT Interactive Securities Litigation ($3 million recovery) and many others.Mr. Binkow has prepared and/or argued appeals before the Ninth Circuit, Sixth Circuit and SecondCircuit Courts of Appeals.
Mr. Binkow is admitted to practice before the state of California, the United States District Courtsfor the Central, Northern and Southern Districts of California, the United States District Court forthe Eastern District of Michigan and the Ninth Circuit Court of Appeals. He is a member of the LosAngeles County Bar Association and the American Bar Association.
MICHAEL GOLDBERG, a partner in Glancy Binkow & Goldberg, specializes in federalsecurities, federal and state antitrust, and consumer fraud class action lawsuits. He has successfullylitigated numerous cases which resulted in multi-million dollar recoveries for investors, consumersand businesses.
Mr. Goldberg was born in New York on April 27, 1966. He earned his B.A. degree in 1989 fromPitzer College - The Claremont Colleges, and his J.D. degree in 1996 from Thomas M. Cooley Law
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School. After graduation from law school, Mr. Goldberg joined the Law Offices of Lionel Z. Glancyand became a partner of Glancy Binkow & Goldberg in 2003. He was admitted to both theCalifornia and Florida bars in 1997 and is admitted to practice in numerous courts.
SUSAN G. KUPFER, a partner of Glancy Binkow & Goldberg LLP, joined the firm in 2003, whereshe established its antitrust practice. She is a native of New York City and received her A.B. degreefrom Mount Holyoke College in 1969 and her J.D. from Boston University School of Law in 1973.She did graduate work at Harvard Law School. In 1977, she was named Assistant Dean and Directorof Clinical Programs at Harvard, where she supervised that program of legal practice and taught itsrelated academic components: Introduction to Advocacy (a NITA-style workshop), LawyeringProcess and Professional Responsibility.
For much of her legal career, Ms. Kupfer has been a professor of law. She subsequently taught atHastings College of the Law, Boston University School of Law, Golden Gate University School ofLaw and Northeastern University School of Law. From 1991 to 2002, she was a lecturer on law atUniversity of California, Berkeley, Boalt Hall, teaching Civil Procedure and Conflict of Laws. Herareas of academic expertise are Civil Procedure, Federal Courts, Conflict of Laws, ConstitutionalLaw, Legal Ethics and Jurisprudence. Her publications include articles on federal civil rightslitigation, legal ethics and jurisprudence. She has also taught various aspects of practical legal andethical training, including trial advocacy, negotiation and legal ethics, to both law students andpracticing attorneys.
Ms. Kupfer previously served as corporate counsel to The Architects Collaborative in Cambridgeand San Francisco and was the executive director of the Massachusetts Commission on JudicialConduct. She returned to the practice of law in San Francisco with Morgenstein & Jubelirer andBerman DeValerio Pease Tabacco Burt & Pucillo before joining the Glancy Firm. Her practice isconcentrated in antitrust, securities and consumer complex litigation. She has been a member of thelead counsel team which achieved significant settlements in the following cases: In re Sorbates Antitrust Litigation ($96.5 million settlement), In re Pillar Point Partners Antitrust Litigation ($50million settlement), In re Critical Path Securities Litigation ($17.5 million settlement).
Ms. Kupfer is a member of the Massachusetts and California State Bars and the United StatesDistrict Courts for the Northern, Central and Southern districts of California, the District ofMassachusetts, the First and Ninth Circuits Courts of Appeal and the U.S. Supreme Court. She wasnamed one of Northern California’s Super Lawyers of the Year in 2004, 2005, and 2006 in antitrustlitigation.
Ms. Kupfer is currently serving in leadership positions in the following cases:
In re Korean Air Lines Co., Ltd. Antitrust Litigation, U.S.D.C., Central District of California, MDL1891, No. 07-5107, Interim Co-Lead Counsel
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In re: Urethane Antitrust Litigation, U.S.D.C., District of Kansas, No. 2:04-md-01616, Co-LeadCounsel.
In re: Western States Wholesale Natural Gas Antitrust Litigation, U.S.D.C., District of Nevada, No.2:03 -cv-0 143 1, Co-Lead Counsel.
Sullivan et al v. DB Investments, Inc., et al., U.S.D.C, District of New Jersey, No. 3:04-cv-02819,Counsel for Reseller Subclass.
KEVIN F. RUF, a partner in Glancy Binkow & Goldberg LLP, was born in Wilmington, Delawareon December 7, 1961. Mr. Ruf graduated from the University of California at Berkeley in 1984 witha B.A. in Economics and earned his J.D. from the University of Michigan in 1987. Mr. Ruf wasadmitted to the State Bar of California in 1988. Mr. Ruf was an associate at the Los Angeles firmManatt Phelps and Phillips from 1988 until 1992, where he specialized in commercial litigation andwas a leading trial lawyer among the associates there. In 1993 he joined the firm Corbin & Fitzgeraldin order to gain experience in criminal law. There he specialized in white collar criminal defensework, including matters related to National Medical Enterprises, Cynergy Film Productions and theEstate of Doris Duke. Mr. Ruf joined Glancy Binkow & Goldberg in 2001 and has taken a lead triallawyer role in many of the firm's cases. In 2006, Mr. Ruf argued before the California SupremeCourt in the case Smith v. L'Oreal and achieved a unanimous reversal of the lower court rulings; thecase established a fundamental right of all California workers to immediate payment of all earningsat the conclusion of employment. In 2007, Mr. Ruf took an important case before the Ninth CircuitCourt of Appeals, convincing the Court to affirm the lower court's certification of a class action ina fraud case (fraud cases have traditionally faced difficulty as class actions because of therequirement of individual reliance). Mr. Ruf has extensive trial experience, including jury trials, andconsiders his courtroom and oral advocacy skills to be his strongest asset as a litigator. Mr. Rufcurrently acts as the Head of the Firm's Labor and Consumer Practice, and has extensive experiencein Securities cases as well. Mr. Ruf also has experience in real estate law and has been a LicensedCalifornia Real Estate Broker since 1999.
MARC L. GODINO has extensive experience successfully litigating complex, class action lawsuitsas a plaintiffs’ lawyer. Marc has played a primary role in cases resulting in settlements of more than$100 million. He has prosecuted securities, derivative, merger & acquisition, and consumer casesthroughout the country in both State and Federal court as well as represented defrauded investors atFINRA arbitrations. Marc supervises the firm’s consumer class action department.
While an associate with Stull Stull & Brody, Marc was one of the two primary attorneys involvedin Small v. Fritz Co., 30 Cal. 4th 167 (April 7, 2003) in which the California Supreme Court creatednew law in the state of California for shareholders that held shares in detrimental reliance on falsestatements made by corporate officers. The decision was widely covered by national media includingThe National Law Journal, Los Angeles Times, New York Times, and the New York Law Journal,among others and was heralded as a significant victory for shareholders.
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Recent successes with the firm include: In re Magma Design Automation, Inc. Securities Litigation,Case No. 05-2394 (N.D.Cal.) ($13,500,000.00 cash settlement for shareholders); ( In re HovnanianEnterprises, Inc. Securities Litigation, Case No. 08-cv-0099 (D.N.J.) ($4,000,000.00 cash settlementfor shareholders); In re Skilled Healthcare Group, Inc. Securities Litigation, Case No. 09-5416(C.D.Cal.) ($3,000,000.00 cash settlement for shareholders); In re Youbet.com, Inc. ShareholderLitigation, Case No. BC426144 (L. A. Sup. Ct.) (settlement provided supplemental disclosures toshareholders in this merger action); Burth v. MSC Software Corp., et al., Case No. 30-2009-00282743 (Orange Cty. Sup. Ct.) (settlement provided supplemental disclosures to shareholders inthis merger action)Shin et al., v. BMW of North America, 2009 WL 2163509 (C.D.Cal. July 16,2009) (after defeating a motion to dismiss, the case settled on very favorable terms for class membersincluding free replacement of cracked wheels); Payday Advance Plus, Inc. v. MIVA, Inc., Case No.06-1923 (S.D.N.Y.) ($3,936,812 cash settlement for class members); Villefranche v. HSBC BankNevada, N.A., Case No. 09-3693 (C.D.Cal.) (after defeating a motion to dismiss, the case resultedin 100% recovery to class members).
Other published decisions include: In re 2TheMart.com Securities Litigation, 114 F.Supp 2d 955(C.D.Ca 2002); In re Irvine Sensors Securities Litigation, 2003 U.S. Dist. LEXIS 18397 (C.D.Ca2003).
The following represent just a few of the cases that Marc is currently litigating in a leadershipposition:In re Toyota Motor Corp. Hybrid Brake Marketing, Sales Practices and Products LiabilityLitigation, MDL 02172 (C.D. Ca.), Co-Lead CounselIn re Stec, Inc. Derivative Litigation, Case No. 10-00667 (C.D. Ca.), Co-Lead CounselSabbag v. Akeena Solar, Inc., et al., Case No. 10-002735 (N.D. Ca.), Co-Lead CounselConroy v. Citibank, N.A., et al., Case No. 10-4930 (C. D. Cal.), Co-Lead Counsel
Marc received his undergraduate degree from Susquehanna University with a bachelor of sciencedegree in Business Management. He received his J.D from Whittier Law School in 1995.
Marc is admitted to practice before the state of California, the United States District Courts for theCentral, Northern and Southern Districts of California, the District of Colorado, and the NinthCircuit Court of Appeals.
OF COUNSEL
ROBIN BRONZAFT HOWALD, a native of Brooklyn, New York, returned home in 2001 to openthe firm’s New York City office. Ms. Howald graduated magna cum laude from Barnard Collegein 1980, with a B.A. in psychology. In 1983, she received her J.D. from Stanford Law School, whereshe served as an Articles Editor for the Stanford Law Review. In addition to her current focus onsecurities fraud and consumer class action matters, during her 20-year career Ms. Howald hashandled cases in many different practice areas, including commercial disputes, professionalmalpractice, wrongful termination, bankruptcy, patent and construction matters. As outside counsel
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for the City of Torrance, California, she also handled a number of civil rights and land use matters,as well as a ground-breaking environmental action concerning Mobil Oil’s Torrance refinery. Ms.Howald has experience in pre-trial and trial procedure and has successfully prosecuted post-trialmotions and appeals.
Mrs. Howald is a member of the bar of both California (1983) and New York (1995), and is admittedto practice in all federal judicial districts in California, the Southern and Eastern Districts of NewYork, and the United States Supreme Court. She co-authored “Potential Tort Liability in BusinessTakeovers” (California Lawyer, September 1986), was a speaker and contributing author at theEighth Annual Current Environmental and Natural Resources Issues Seminar at the University ofKentucky College of Law (April 1991), and served as a Judge Pro Tem for the Los Angeles CountySmall Claims Court (1996-1997). Married in 1985, Mrs. Howald and her husband have two sons.An avid runner, Mrs. Howald has completed six marathons.
JALA AMSELLEM has been engaged in the private practice of civil ligation for over ten years.She has handled a broad variety of cases in the areas of corporate commercial, family law, personalinjury and entertainment litigation. Jala is also a former legal writing professor who taught legalskills for twelve years. In her last academic position she was the Associate Director of the legalwriting program at The George Washington School of Law. Recently, Jala founded The Bar Coach,a company dedicated to assisting bar takers pass the California Bar Exam.
Jala received her undergraduate degree from New York University in 1982 and her J.D. from TouroLaw School in 1985. At Touro, Jala was the Senior Editor of the law review. Jala is admitted to thebars of California, New York, New Jersey, Michigan and the District of Columbia.
ASSOCIATES
DALE MacDIARMID is a native of Los Angeles, California. He holds a B.A. in Journalism (withDistinction) from the University of Hawaii, and a J.D. from Southwestern University School of Law,where he was a member of the Board of Governors of the Trial Advocacy Honors Program. He isadmitted to practice in California, before the United States District Courts for the Southern, Centraland Northern Districts of California and the District of Colorado. Dale is a member of Kappa TauAlpha, the national journalism honor society, and before joining Glancy Binkow & Goldberg he wasa writer and editor for newspapers and magazines in Honolulu and Los Angeles.
ANDY SOHRN joined Glancy Binkow & Goldberg LLP in 2006. He was admitted to the CaliforniaBar in January 2006 after receiving his J.D. from the University of California Los Angeles Schoolof Law in May 2005. While attending law school, Andy was the Managing Editor of the PacificBasin Law Journal, participated in Moot Court and was a Teaching Assistant for the LawyeringSkills program. He also holds a B.A. in Economics and Mathematics from Yale University (classof 2002).
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COBY MARIE TURNER joined Glancy Binkow and Goldberg LLP in 2010. Coby was a Regent’sScholar at the University of California, Santa Barbara, and holds a B.A. in Business Economics andPolitical Science. She received her J.D. from the University of Southern California, Gould Schoolof Law. During law school, Coby was an editor of the Hale Moot Court Honors Program, thePresident of the International Law and Relations Organization, and an extern for Mental HealthAdvocacy Services in Los Angeles, California. Coby was admitted to the California State Bar in2009.
ROBERT V. PRONGAY is an associate in the Firm’s Los Angeles office, where he focuses onthe investigation, initiation, and litigation, of complex securities cases brought on behalf ofinstitutional and individual investors.
Mr. Prongay earned his Bachelor of Arts degree in Economics from the University of SouthernCalifornia in 2005 and earned his Juris Doctor degree from Seton Hall University School of Law in2008. While attending law school, Mr. Prongay worked as a summer associate at the Firm, andinterned for a federal magistrate judge for the United States District Court for the District of NewJersey. Mr. Prongay is admitted to the State Bar of California, as well as the United States DistrictCourts for the Central, Northern and Southern Districts of California, and the District of Colorado.
LOUIS BOYARSKY joined Glancy Binkow & Goldberg LLP in 2010. Louis received hisJD/MBA from Loyola Law School, Los Angeles and Loyola Marymount University’s GraduateSchool of Business. While in law school, Louis served as a staff writer for the Loyola of Los AngelesEntertainment Law Review. The Law Review published his article: Stealth Celebrity Testimonialsof Prescription Drugs: Placing the Consumer in Harm’s Way and How the FDA has Dropped theBall. Additionally, while in law school, Louis externed for the Honorable Suzanne H. Segal,magistrate judge for the Central District of California.
Louis is a member of the St. Thomas More Legal Honor Society, the Alpha Sigma Nu NationalJesuit Honor Society and the Beta Gamma Sigma Business Honor Society. Louis is admitted topractice before the state of California and the United States District Court for the Central District ofCalifornia.
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RECOMMENDED SCHEDULE OF THE VARIOUS DATES PROVIDED IN THE PROPOSED NOTICE ORDER
Notice Mailed to Class Members (Notice 20 business days after entry of the orderOrder, ¶ 7(a)) preliminarily approving the settlement
Summary Notice published (Notice Order, ¶ 30 business days after entry of the order7(b)) preliminarily approving the settlement
Settlement Hearing (Notice Order, ¶ 3) To be determined by the court, Plaintiffspropose 100 days after the order preliminarilyapproving the settlement
Deadline for Plaintiffs to file papers in 35 days prior to the Settlement Hearingsupport of final approval and application forfees and expenses. (Notice Order, ¶ 7(d))
Deadline for Objections to the Settlement 21 days prior to the Settlement Hearing(Notice Order, ¶ 13)
Deadline for requesting exclusion from the 21 days prior to the Settlement HearingSettlement (Notice Order, ¶ 9) or objecting tothe Settlement, the proposed Plan ofAllocation, and the request for attorneys’ feesand expenses (Notice Order, ¶ 13)
Deadline for Plaintiffs to file papers in further 10 days prior to the Settlement Hearingsupport of final approval and application forfees and expenses. (Notice Order, ¶ 15)
Deadline for submitting Proof of Claim forms 120 days from the Notice Date(Notice Order, ¶ 11)