Maritime Asset Management, LLC v. Neurogesx, Inc. et al

Filing 94

ORDER PRELIMINARILY APPROVING SETTLEMENT AND CERTIFYING SETTLEMENT CLASS, APPROVING CLASS NOTICE AND SETTING SETTLEMENT HEARING [AS MODIFIED BY THE COURT] re 84 MOTION for an Order Granting Preliminary Approval of Class Action Settlemen t and Directing Dissemination of Notice to the Class filed by Maritime Asset Management, LLC. Signed by Judge Yvonne Gonzalez Rogers on 6/27/14. (Attachments: # (1A-1) Exhibit: Notice of Settlement, # (1A-2) Exhibit: Claim Form )(fs, COURT STAFF) (Filed on 6/27/2014)

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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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OAKLAND DIVISION
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MARITIME ASSET MANAGEMENT, LLC,
on Behalf of Itself and All Others Similarly
Situated,
Plaintiff,

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v.
NEUROGESX, INC., ANTHONY A.
DITONNO, STEPHEN F. GHIGLIERI, and
JEFFREY K. TOBIAS, M.D.,

Case No. CV 12-05034-YGR
CLASS ACTION
ORDER PRELIMINARILY
APPROVING SETTLEMENT AND
CERTIFYING SETTLEMENT
CLASS, APPROVING CLASS
NOTICE, AND SETTING
SETTLEMENT HEARING
*As Modified By The Court*

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Defendants.
EXHIBIT A

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[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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The Court has received the Stipulation of Settlement dated May 16, 2014 that has been

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entered into by Lead Plaintiff and Defendants and Amendment No. 1 to the Stipulation of

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Settlement dated June 26, 2014. The Court has reviewed the Settlement and its attached exhibits,

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and, good cause appearing,

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IT IS HEREBY ORDERED AS FOLLOWS:

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1.

For purposes of this Order, capitalized terms are as defined in paragraph 18

2.

The Court hereby certifies the settlement class consisting of all Persons who

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below.

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purchased or otherwise acquired NeurogesX Securities pursuant to the July 21, 2011 Private

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Placement (the “Settlement Class”). Excluded from the Settlement Class are Defendants, the

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officers and directors of NeurogesX, members of their immediate families and their legal

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representatives, heirs, successors or assigns, and any entity in which any defendant has a

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controlling interest. Also excluded from the Settlement Class are any Persons who exclude

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themselves by submitting a valid request for exclusion in accordance with the requirements set

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forth in the Notice.

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Settlement Class and appoints Levi & Korsinsky LLP as Lead Counsel to the Settlement Class.

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The certification of the Settlement Class, and appointments of the class representative and Lead

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Counsel, shall be binding only with respect to the Settlement. If, for any reason, the Settlement

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is terminated, or the Effective Date does not occur, the certification of the Settlement Class shall

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automatically be vacated, and the Action shall proceed as though the Settlement Class had never

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been certified.

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3.

The Court certifies Lead Plaintiff as the class representative for the

The Court preliminarily approves the Settlement as falling within the range of

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possible approval and meriting submission to the Settlement Class for consideration, pursuant to

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Rule 23(e) of the Federal Rules of Civil Procedure.

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4.

The Court approves for distribution to potential members of the Settlement Class

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the Notice substantially in the form of Exhibit A-1 to this order, and the Claim Form

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substantially in the form of Exhibit A-2 to this order.

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[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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5.

Lead Counsel shall distribute, by registered first class mail, the Notice and Claim

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Form to all persons who purchased NeurogesX Securities pursuant to the July 21, 2011 Private

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Placement. The deadline for mailing of the Notice shall be July 3, 2014. Lead Counsel shall file

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with the Court and serve upon Counsel for Defendants no later than 28 calendar days prior to the

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Final Approval Hearing an affidavit or declaration stating that the mailings have been completed

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in accordance with the terms of this order.

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6.

The Court finds that dissemination of the Notice and Claim Form in the manner

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required in paragraph 5 constitutes the best notice practicable under the circumstances to

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potential members of the Settlement Class, and complies fully with Rule 23 of the Federal Rules

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of Civil Procedure, Section 21D(a)(7) of the Securities Exchange Act of 1934 (as amended by

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the Private Securities Litigation Reform Act of 1995, 15 U.S.C. § 78u-4(a)(7)), and the United

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States Constitution.

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7.

The Final Approval Hearing will be held on September 2, 2014, at 2:00 p.m., in

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the United States District Court for the Northern District of California, Oakland Division, 1301

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Clay Street, Courtroom 1, 4th Floor, Oakland, California, at which the Court will determine: (1)

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whether the Settlement should be approved as fair, reasonable, and adequate; (2) whether the

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Judgment, substantially in the form attached as Exhibit B to the Settlement, should be entered;

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(3) whether Lead Counsel’s Plan of Allocation is fair, reasonable, and adequate; and (4) whether

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the application of Lead Counsel for attorneys’ fees and Litigation Expenses should be approved.

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The Court may adjourn or continue the Final Approval Hearing without further notice to the

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Settlement Class.

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8.

Any Settlement Class Member who objects to the Settlement, the Plan of

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Allocation, or application of Lead Counsel for attorneys’ fees and Litigation Expenses, shall have

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a right to appear and be heard at the Final Approval Hearing. Any such person must file with the

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Court and deliver to Lead Counsel and Defendants’ Counsel a written notice of objection no later

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than August 5, 2014. The manner by which a notice of objection should be prepared, filed, and

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delivered shall be stated in the Notice. Only Settlement Class Members who have filed and

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[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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delivered valid and timely written notices of objection will be entitled to be heard at the Final

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Approval Hearing, unless the Court otherwise orders.

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9.

Any Settlement Class Member who wishes to participate in the Settlement Fund

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must submit a valid and timely Claim Form to Lead Counsel. To be valid, a Claim Form must

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include the information requested by the Claim Form. To be timely, the Claim Form must be

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submitted no later than August 5, 2014. All Settlement Class Members who submit valid and

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timely Claim Forms shall share in the distribution of the Settlement Fund. Settlement Class

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Members who do not submit valid and timely Claim Forms shall be forever barred from

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receiving any payments from the Settlement Fund, but will in all other respects be subject to and

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bound by the provisions of the Settlement and Judgment, including the releases provided for in

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the Settlement and Judgment.

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10.

Any person falling within the definition of the Settlement Class may, upon

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request, be excluded from the Settlement. Any such person must file with the Court and submit

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to Lead Counsel a request for exclusion no later than August 5, 2014. A request for exclusion

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must state: (1) the name, address, and telephone number of the person requesting exclusion; and

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(2) that the person wishes to be excluded from the Settlement Class. All persons who submit

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valid and timely requests for exclusion in the manner set forth in this paragraph shall have no

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rights under the Settlement, shall not share in the distribution of the Settlement Fund, and shall

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not be bound by the Settlement or the Judgment. All persons falling within the definition of

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Settlement Class who do not request exclusion in the manner set forth in this paragraph shall be

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Settlement Class Members and shall be bound by the Settlement and Judgment. Lead Counsel

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shall provide copies of any and all requests for exclusion to Counsel for Defendants within five

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(5) calendar days of receipt by Lead Counsel, and in no event later than fourteen (14) calendar

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days before the Final Approval Hearing.

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11.

Lead Counsel shall administer the Settlement Fund in accordance with paragraphs

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6.1 through 6.5 of the Settlement. Under no circumstances shall Lead Counsel disburse any

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portion of the Settlement Fund prior to the Effective Date without an order of the Court, except

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as permitted by paragraph 6.5 of the Settlement.
[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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12.

Lead Counsel shall submit any applications it wishes to make for attorneys’ fees

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and Litigation Expenses on or before July 22, 2014. Any opposition thereto shall be filed no

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later than August 5, 2014.

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13.

The Plan of Allocation and Lead Counsel’s application for attorneys’ fees and

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Litigation Expenses will be considered separately from the fairness, reasonableness, and

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adequacy of the Settlement. Any appeal from any orders relating solely to the Plan of Allocation

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and/or to Lead Counsel’s application for attorneys’ fees and Litigation Expenses, or any reversal

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or modification thereof, shall not operate to terminate or cancel the Settlement, or affect or delay

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the finality of the Judgment.

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14.

All briefs supporting final approval of the Settlement shall be served and filed no

later than August 12, 2014.
15.

All discovery and other proceedings in the Action are stayed until further order of

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the Court, except as may be necessary to implement the Settlement or comply with its terms.

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The class representative and the Settlement Class Members are barred from commencing or

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prosecuting any direct or representative action asserting any of the Released Claims, unless and

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until the Settlement is terminated according to its terms.

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16.

The Court may, for good cause, extend any of the deadlines set forth in this order

without further notice to the Settlement Class.
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The Court will retain jurisdiction of this matter for one year following final

approval of the settlement.
18.

The Court, for purposes of this order, adopts the following definitions:
a.

“Action” means the lawsuit now pending in the United States District

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Court for the Northern District of California under the caption Maritime

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Asset Management, LLC v. NeurogesX, Inc. et al., Case No. CV 12-05034-

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YGR.

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b.

“Appeal” means any attempt to seek review of an order or the Judgment

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including any motion to alter or amend under Rules 52(b) or 59(e) of the

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Federal Rule of Civil Procedure, any appeal as of right, discretionary
[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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appeal, interlocutory appeal, petition for writ of certiorari or other

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proceeding involving writs of certiorari or mandamus, and any other

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proceedings of like kind. Any appeal or other proceeding pertaining solely

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to the Plan of Allocation or an application for attorneys’ fees and expenses

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shall not in any way delay or preclude occurrence of the Effective Date.

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c.

“Authorized Claimant” means any Settlement Class Member who has

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submitted a timely and valid Claim Form and who is entitled to a

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distribution from the Net Settlement Fund pursuant to the Plan of

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Allocation or any order of the Court.

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d.

“Claim Form” means the Claim Form and Release (substantially in the

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form of Exhibit A-2 to Exhibit A to the Settlement) that a Settlement Class

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Member must complete and timely submit in accordance with the

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instructions on the Claim Form if that Settlement Class Member seeks to

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be potentially eligible to share in a distribution of the Net Settlement

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Fund.

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e.

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Ghiglieri, and Jeffrey K. Tobias, M.D.
f.

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“Defendants” means NeurogesX, Anthony A. DiTonno, Stephen F.

“Defendants’ Counsel” means the law firms of Morrison & Foerster LLP
and Cooley LLP.

g.

“Effective Date” means the first date by which all of the following events

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have occurred: (1) Lead Counsel and Defendants’ Counsel have executed

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the Settlement; (2) the Court has entered this Order Preliminarily

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Approving Settlement and Certifying Settlement Class, Approving Class

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Notice, and Setting Settlement Hearing; (3) the payment provided for in

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paragraph 5.1 of the Settlement has been made to Lead Counsel for the

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benefit of Settlement Class Members; (4) NeurogesX has not notified

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Lead Counsel of its election to terminate the Settlement pursuant to ¶15.2

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of the Settlement and the provisions of the Supplemental Agreement, or, if
[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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such election has been made, the resulting termination has been withdrawn

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pursuant to the terms of the Supplemental Agreement; (5) the Court has

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entered the Judgment; (6) no Settling Party has given notice of its election

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to terminate the Settlement pursuant to ¶15.1 of the Settlement, and the

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time for doing so has expired; (7) the time to Appeal from the Judgment

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has expired; and (8) if any Appeal is taken from the Judgment, the Appeal

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has either been dismissed or has resulted in affirmance of the Judgment.

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h.

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September 2, 2014 at 2:00 p.m. under Rule 23(e) of the Federal Rules of

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“Final Approval Hearing” means the hearing set by the Court for

Civil Procedure to consider final approval of the Settlement.
i.

“Judgment” means the Final Judgment and Order of Dismissal with

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Prejudice to be entered after the Final Approval Hearing if the Settlement

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is approved.

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j.

“Lead Counsel” means the law firm of Levi & Korsinsky LLP.

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k.

“Lead Plaintiff” means Maritime Asset Management, LLC.

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l.

“Litigation Expenses” means the reasonable costs and expenses incurred

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by Lead Counsel in connection with commencing and prosecuting this

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action.

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Plaintiff’s expenses in accordance with 15 U.S.C. § 78u-4(a)(4).

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m.

Litigation Expenses may also include reimbursement of Lead

“Net Settlement Fund” means the Settlement Fund less: (i) any taxes; (ii)

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any notice and administration costs; (iii) any Litigation Expenses awarded

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by the Court; (iv) any attorneys’ fees awarded by the Court; and (v) other

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costs, expenses or amounts as may be approved by the Court.

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n.

“NeurogesX” means NeurogesX, Inc.

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o.

“NeurogesX Securities” means NeurogesX’s common stock and/or

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warrants to purchase NeurogesX’s common stock.
p.

“Notice” means the letter from Lead Counsel describing the terms of the
Settlement and the procedures for presenting the Settlement for the

[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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approval of the Court and for requesting exclusion from the Settlement

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Class or for submitting a Claim (substantially in the form of Exhibit A-1 to

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Exhibit A of the Settlement).

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q.

“Person” means an individual, corporation, limited liability company,

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professional corporation, partnership, domestic partnership, limited

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partnership, limited liability partnership, marital community, association,

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joint stock company, joint venture, joint venturer, estate, legal

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representative, trust or trustee, unincorporated association, government or

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any political subdivision or agency thereof, or any other business or legal

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entity.
r.

“Plan of Allocation” means the plan for allocation of the Net Settlement

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Fund on a pro rata basis based on the ratio of (i) the purchase price paid by

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each Authorized Claimant to purchase shares in the Private Placement to

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(ii) the total purchase price paid by all Authorized Claimants, or such other

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plan of allocation as the Court shall approve.

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s.

“Private Placement” means the transaction described in the Securities

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Purchase Agreement dated July 21, 2011 between NeurogesX and the

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purchasers identified on the signature pages attached to that agreement.

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t.

“Released Claims” means all claims, demands, rights, liabilities, suits,

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debts, obligations, and causes of action, of every nature and description

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whatsoever, whether known or unknown, contingent or absolute, mature

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or unmature, discovered or undiscovered, liquidated or unliquidated,

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accrued or unaccrued, including those that are concealed or hidden,

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regardless of legal or equitable theory, that have been, could have been, or

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in the future might be asserted based upon, arising out of, or in any way

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relating to: (i) any purchase or sale by any Settlement Class member of

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NeurogesX

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misrepresentation, fact, event, transaction, occurrence, or other matter set

Securities;

(ii)

any

act,

[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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to

act,

omission,

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forth, alleged, underlying, or otherwise referred to in the Action or that

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could have been alleged in the Action; or (iii) the subject matter of the

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Action.

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include claims relating to the enforcement of the Settlement.

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u.

Notwithstanding the foregoing, “Released Claims” does not

“Request for Exclusion” means a request by a Member of the Settlement

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Class to be excluded from participating in the Settlement, submitted in

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accordance with the requirements set out in the Notice or otherwise

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accepted by the Court.

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v.

“Settlement” means the Stipulation of Settlement executed by Lead

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Plaintiff and Defendants on May 16, 2014, including any amendment to

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that agreement made in a writing signed by or on behalf of all Settling

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Parties.

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w.

“Settlement Class” means all Persons who purchased or otherwise

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acquired NeurogesX Securities pursuant to the July 21, 2011 Private

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Placement.

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officers and directors of NeurogesX, members of their immediate families

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and their legal representatives, heirs, successors or assigns, and any entity

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in which any Defendant has a controlling interest. Also excluded from the

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Settlement Class are any Persons who otherwise satisfy the above

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requirements for membership in the Settlement Class, but who exclude

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themselves by submitting a valid Request for Exclusion.

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x.

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Excluded from the Settlement Class are Defendants, the

“Settlement Class Member” means a Person who falls within the
definition of the Settlement Class.

y.

“Settlement Fund” means the sum of up to One Million Two Hundred

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Fifty Thousand United States dollars ($1,250,000) in cash, which

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Defendants shall cause to be paid to Lead Counsel, to be held for the

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benefit of Settlement Class Members, within fourteen (14) business days

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after entry of the Judgment, plus all interest and income earned thereon.
[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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z.

“Supplemental Agreement” means the Supplemental Agreement regarding

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the Opt-Out Threshold to be signed by the Settling Parties in connection

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with the Settlement.

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IT IS SO ORDERED.

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DATED: June 27, 2014

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_________________________________________
THE HONORABLE YVONNE GONZALEZ ROGERS
UNITED STATES DISTRICT COURT JUDGE

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[PROPOSED] ORDER RE PRELIMINARY APPROVAL OF SETTLEMENT
Case No. CV 12-05034-YGR

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