Salhuana v. Diamond Foods, Inc. et al

Filing 313

ORDER TO SHOW CAUSE AS TO HOLD BROTHERS ON-LINE INVESTMENT SERVICES LLC. Order to Show Cause Hearing set for 2/6/2014 01:00 PM. Show Cause Response due by 1/27/2014. Signed by Judge Alsup on 1/14/2014. (whalc2, COURT STAFF) (Filed on 1/14/2014).

Case3:11-cv-05386-WHA Document308-2 Filed01/13/14 Page2 of 5

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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Case No.: 11-cv-05386-WHA
IN RE DIAMOND FOODS, INC.,
SECURITIES LITIGATION

[PROPOSED] ORDER TO SHOW CAUSE

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This Document Relates to:
All Actions

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To:

Hold Brothers On-Line Investment Services LLC
1177 Avenue of the Americas
Suite 2B
New York, NY 10036
525 Washington Blvd., 1400A
Jersey City, NJ 07310

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On September 26, 2013, this Court issued its Preliminary Approval Order of the

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proposed settlement in the above captioned matter, setting the Final Approval Hearing for

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January 9, 2014, and requiring, among other things, that brokers and custodians who held

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Diamond common stock on behalf of clients submit a letter confirming that they have

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either provided the Notice of Proposed Settlement to their clients or provided the Claims
Administrator with a mailing list of these clients to Class Counsel. Hold Brothers was
[PROPOSED] ORDER TO SHOW CAUSE
No. 11-CV-05386-WHA

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identified in the records of the Depository Trust Clearing Corporation as a nominee that
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held Diamond stock during the Class Period (October 5, 2010 through February 8, 2012),

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potentially on behalf of clients. Plaintiff has represented to the Court that Hold Brothers

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was sent the Notice, as well as letters and email communications from Class Counsel

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concerning its obligation to submit the required broker letter, and was provided a form

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letter of compliance to complete, but it has not responded. Additionally, Plaintiff has
represented that it contacted Hold Brothers by mail and email on several occasions as

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described in the Declaration of Krissi T. Gore of Class Counsel’s Compliance with May
31, 2013 Order Re Form and Manner of Class Notice dated August 21, 2013 [ECF 273],

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the Declaration of Krissi T. Gore Regarding Broker Compliance dated November 26,

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2013 [ECF 299-2], and the Supplemental Declaration of Krissi T. Gore Regarding Broker

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Compliance dated December 30, 2013 [ECF 301-2], which were filed in connection with

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the settlement of this Action, and that these efforts have continued through January 13,

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2014.
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The Court conducted the Final Approval Hearing on January 9, 2014, and issued

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the Order Granting Final Approval of the Proposed Class Settlement on January 10, 2014.

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Because Hold Brothers did not submit the required broker compliance letter, the Court is

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concerned that Hold Brothers’ clients who purchased Diamond common stock during the

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Class Period did not or will not have sufficient opportunity to submit a claim to receive

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their appropriate share of the settlement consideration. In the event that Hold Brothers did

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not distribute the Notice of Proposed Settlement to its clients by November 20, 2013, the
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time for its clients to submit a claim will be extended from the existing deadline of
February 28,
January 9, 2014, which has already passed, to February 15, 2014.

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Accordingly, having considered the circumstances described above, NOW,

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THEREFORE,
[PROPOSED] ORDER TO SHOW CAUSE
No. 11-CV-05386-WHA

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IT IS ORDERED that Hold Brothers is to appear and demonstrate why it should
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not be held in contempt for failing to respond to Class Counsel’s notice and instructions

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regarding this Court’s Orders. Hold Brothers may file a responsive brief in this Court no

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later than January 27, 2014 at noon and serve it on all parties by the same date and time.

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This brief shall set forth the reasons why Hold Brothers has not submitted the required

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broker letter demonstrating that it distributed the Notice of Proposed Settlement to any
clients who purchased Diamond common stock during the Class Period, or in the

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alternative, provided the names and addresses of such clients to the Claims Administrator
in accordance with the Notice that was distributed on October 1, 2013. The parties may

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file any replies thereto on or before January 29, 2014, at noon. A hearing to consider the

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responses and to determine whether Hold Brothers should be held in contempt, is
February 6,
scheduled for January 30, 2014, at 1:00 p.m.
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IT IS FURTHER ORDERED that Hold Brothers identify the date on which it

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distributed the Notice of Proposed Settlement to its clients who purchased Diamond
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common stock during the Class Period, if applicable, and, if the date of distribution of the

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Notice was later than November 20, 2013, that the time for its clients to submit a Claim to
February 28,
the Claims Administrator is extended to February 15, 2014. Hold Brothers shall give

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appropriate notice of the extension of time to file a Claim set forth above, and confirm to

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this Court that it has done so. Hold Brothers may be relieved of its obligation to appear on
February 6,
January 30, 2014 to show cause only if it provides to Class Counsel [Meryl W. Roper,

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Chitwood Harley Harnes LLP, 1230 Peachtree Street, NE, Suite 2300, Atlanta, GA 30309,
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[phone], [e-mail]], on or before that date, the required broker

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compliance letter or a statement confirming that it did not hold Diamond common stock

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on behalf of any clients during the Class Period; and

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IT IS FURTHER ORDERED that Class Counsel serve this Order to Show Cause
[PROPOSED] ORDER TO SHOW CAUSE
No. 11-CV-05386-WHA

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personally, if possible, as well as by overnight delivery.
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IT IS SO ORDERED.

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Dated: __________, 2014.
January 14

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____________________________
WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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[PROPOSED] ORDER TO SHOW CAUSE
No. 11-CV-05386-WHA

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