Janssen v. OppenheimerFunds, Inc. et al

Filing 107

ORDER PRELIMINARILY APPROVING SETTLEMENT AND PROVIDING FOR NOTICE Re: 104 Unopposed Motion for Preliminary Approval of Proposed Class Settlement and Approval of Notice Plan. The Court does hereby preliminarily approve the Stipulation and the Settle ment set forth therein, subject to further consideration at the Settlement Hearing. Settlement Hearing set for 9/30/2011 at 01:30 PM in Courtroom A 802 before Judge John L. Kane. See Order for further details. The Court reserves the right to adjourn the date of the Settlement Hearing without further notice to the Members of the Class, and retains jurisdiction to consider all further applications arising out of or connected with the proposed Settlement, by Judge John L. Kane on 06/01/2011.(wjc, )

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLORADO
Judge John L. Kane

Civil Action No. 09-cv-386-JLK-KMT (consolidated with 09-cv-525-JLK-KMT)
IN RE: OPPENHEIMER CHAMPION FUND SECURITIES FRAUD CLASS ACTIONS
This document relates to BOTH actions.
ORDER PRELIMINARILY APPROVING SETTLEMENT
AND PROVIDING FOR NOTICE

WHEREAS, a consolidated class action is pending before the Court entitled In re
Oppenheimer Champion Fund Securities Fraud Class Actions, No. 09-cv-386-JLK-KMT (the
“Action”);
WHEREAS, the Court has received the unopposed motion for preliminary approval of
the Stipulation and Agreement of Settlement dated May 19, 2011 (the “Stipulation”), that has
been entered into by the Lead Plaintiffs and Defendants, and the Court has reviewed the
Stipulation and its attached Exhibits;
WHEREAS, Lead Plaintiffs having made an unopposed motion for preliminary approval
of the settlement, pursuant to Federal Rule of Civil Procedure 23(e) (“Federal Rule 23”), for an
order preliminarily approving the settlement of this Action, in accordance with the Stipulation
which, together with the Exhibits annexed thereto sets forth the terms and conditions for a
proposed settlement of the Action and for dismissal of the Action with prejudice upon the terms
and conditions set forth therein; and the Court having read and considered the Stipulation and the
Exhibits annexed thereto (the “Settlement”); and

WHEREAS all defined terms contained herein shall have the same meanings as set forth
in 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.

A hearing (the “Settlement Hearing”) shall be held before this Court on

September 30, 2011, at 1:30 p.m., at the Alfred A. Arraj United States District Courthouse, 901
19th Street, Denver, Colorado 80294, Courtroom A802, to determine whether: the proposed
Settlement of the Action on the terms and conditions provided for in the Stipulation is fair,
reasonable and adequate to the Class and should be approved by the Court; whether a judgment
as provided in ¶ 22 of the Stipulation should be entered; whether the proposed plan of
distribution for the proceeds of the Settlement (“Plan of Distribution”) should be approved; and
to determine the amount of fees and expenses that should be awarded to Class Counsel and Lead
Plaintiffs.
3.

Pursuant to Federal Rule 23, the Court certifies the following Class:
The Class shall include all persons and entities who purchased or
otherwise acquired shares of the Champion Fund during the Class
Period and who were damaged thereby. Excluded from the Class
are Defendants; Oppenheimer’s Officers and Directors; members
of Defendants’ immediate families; Defendants’ legal
representatives, heirs, successors, or assigns; any entity in which
Defendants have or had a controlling interest; and any mutual fund
or account managed by OFI or its affiliates (including without
limitation “funds of funds”) that owned shares of the Champion
Fund. Also excluded from the Class are any proposed Class
Members who properly exclude themselves by filing a valid and
timely request for exclusion in accordance with the requirements
set forth in the Notice (“the Class”).
“Class Period” means the period from January 1, 2006 through
December 31, 2008, inclusive.

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4.

The Court finds that certification of the Class meets the requirements of Federal

Rule 23 as follows:
a.

There are at least tens of thousands of Members of the Class and likely

more, and the Class is of sufficient size and geographical dispersion that joinder of all
Class Members is impracticable, thus satisfying Federal Rule 23(a)(1).
b.

There are questions of law and fact common to the Class, thus satisfying

Federal Rule 23(a)(2). Among the questions of law and fact common to the Class are:
whether the Securities Act of 1933 was violated by Defendants’ acts as alleged; whether
statements made by Defendants to the investing public in the Champion Income Fund
Registration Statements and Prospectuses misrepresented or omitted material facts; and
whether the Members of the Class have sustained damages and, if so, what is the proper
measure thereof.
c.

Lead Plaintiffs’ claims for violations of Sections 11, 12(a)(2) and 15 of the

Securities Act of 1933 are typical of the claims of the Class, thus satisfying Federal Rule
23(a)(3).
d.

Lead Plaintiffs Thomas H. Goodman and Errol G. O’Steen, and their

counsel, Labaton Sucharow LLP and Hagens Berman Sobol Shapiro LLP, will fairly and
adequately protect the interests of the Class, thus satisfying Federal Rule 23(a)(4).
e.

The questions of law and fact common to the Class predominate over any

questions affecting only individual members, thus satisfying Federal Rule 23(b)(3).
f.

A class action is superior to other available methods for the fair and

efficient adjudication of the controversy, thus satisfying Federal Rule 23(b)(3).

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5.

Class Members are provided an opportunity to be excluded from the Class. The

deadline to request exclusion is August 31, 2011.
6.

Lead Plaintiffs Thomas H. Goodman and Errol G. O’Steen are appointed

representatives of the Class.
7.

Labaton Sucharow LLP and Hagens Berman Sobol Shapiro LLP are appointed

Class Counsel. The Shuman Law Firm is appointed Liaison Counsel.
8.

The Court approves, as to form and content, the “Notice of Pendency and

Proposed Settlement of Class Action for Identified Purchasers” and the “Notice of Pendency and
Proposed Settlement of Class Action for Un-Identified Purchasers” (collectively, the “Notice”),
and Publication Notice for publication, in substantially the forms annexed as Exhibits 1, 2, and 5
hereto, and finds that the mailing and distribution of the Notice and publishing of the Publication
Notice, as set forth herein, meet the requirements of Federal Rule 23, due process, and Section
27 of the Securities Act of 1933, 15 U.S.C. §77z-1(a)(7), as amended by the Private Securities
Litigation Reform Act of 1995 (the “PSLRA”), and constitutes the best notice practicable under
the circumstances and shall constitute due and sufficient notice to all persons and entities entitled
thereto.
9.

The Court hereby appoints Epiq Class Action & Claims Solutions, Inc. (“Claims

Administrator”) to supervise and execute the notice program as well as the administration of the
Settlement, as more fully set forth below and as set forth in the Stipulation:
a.

Not later than July 15, 2011 (the “Notice Date”), the Claims Administrator

shall cause a copy of the Notice, substantially in the forms annexed hereto, to be mailed
by first class mail, postage prepaid, to all Class Members who can be identified with
reasonable effort. The Oppenheimer Defendants, to the extent they have not already

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done so, shall within ten (10) calendar days of entry of this Order, provide to the Claims
Administrator, at no cost to Lead Plaintiffs, Lead Counsel, the Class or the Claims
Administrator, a list, in electronic searchable form, of the names, addresses, and Class
Period account transaction data for individual Class Members to the extent that the
Oppenheimer Defendants possess the information. To the extent that certain Class
Members held Champion Income Fund shares at broker-dealers or other intermediaries
(“Broker-Dealer Intermediaries”) and, as a result, the Oppenheimer Defendants do not
possess the names, addresses and Class Period account transaction data for these Class
Members, the Oppenheimer Defendants shall within two (2) calendar days of entry of this
Order provide to the Claims Administrator the names and addresses of such brokerdealers or other intermediaries along with their aggregate account data at no cost and in
electronic searchable form. After the Claims Administrator has notified the brokerdealers or other intermediaries of the Settlement, the Oppenheimer Defendants shall also
contact such broker-dealers and intermediaries to advise them of the Settlement and of
their obligations under this Order, and to request that they provide names, addresses and
transactional data to the Claims Administrator. The Defendants are not obligated to bear
any costs associated with obtaining Class Members’ names, addresses, or Class Period
account transactions data from broker-dealers or other intermediaries.
b.

Not later than July 29, 2011, the Claims Administrator shall cause the

Publication Notice to be published once in Investor’s Business Daily and transmitted over
PRNewswire.
c.

Together with the mailed Notice, the Claims Administrator shall send, for

those Class Members for whom the Claims Administrator has obtained transaction data, a

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Record of Fund Transactions from January 1, 2006 through December 31, 2008,
substantially in the form annexed as Exhibit 4 hereto. For those Class Members for
whom the Claims Administrator has been unable to obtain transaction data (or has only
incomplete transaction data), the Claims Administrator shall send a Proof of Claim form
(“Proof of Claim”), substantially in the form annexed as Exhibit A-3 hereto, with the
Notice.
d.

Not later than July 29, 2011, Class Counsel shall file with the Court papers

in support of their request for an award of attorneys’ fees and expenses.
e.

Not later than July 29, 2011, Class Counsel shall file with the Court papers

in support of approval of the Settlement and Plan of Distribution, including a declaration
of proof of mailing and publishing notice. Reply papers, if any, shall be filed by Class
Counsel no later than September 15, 2011.
f.

Class Members who were sent Proofs of Claim must return completed

forms to the Claims Administrator no later than October 30, 2011 in order to be eligible
to participate in any Settlement distributions. Class Members who were sent a Record of
Fund Transactions and wish to challenge the information therein must contest the Claims
Administrator’s determinations by the deadline set by the Claims Administrator.
10.

Within five (5) business days of this Order, the Claims Administrator is directed

to send a notification to all Broker-Dealer Intermediaries identified in the intermediary account
data provided by Oppenheimer requesting that, for each account that held Oppenheimer
Champion Income Fund shares at any time from January 1, 2006 through December 31, 2008,
the Broker-Dealer Intermediary shall provide the name(s), address(es) of each account-holder
and all Champion Income Fund transaction data in each account. The notification shall inform

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the Broker-Dealer Intermediaries that, if it is not feasible to provide the Champion Income Fund
transaction data for each account by July 1, 2011, the Broker-Dealer Intermediaries still must
provide name and address information by that date so that Proofs of Claim may be sent to
account-holders who held Champion Income Fund shares in accounts with that Broker-Dealer
Intermediary. The Court hereby orders such Broker-Dealer Intermediaries to promptly provide
all information requested by the Claims Administrator in order for the intermediary accountholders to benefit from the proposed Settlement.
11.

Class Members shall be bound by all orders, determinations and judgments in this

Action, whether favorable or unfavorable, unless such Persons request exclusion from the Class
in a timely and proper manner, as hereinafter provided. A Class Member wishing to make such
an exclusion request shall mail the written request to the address designated in the Notice for
such exclusions, such that it is postmarked no later than August 31, 2011. Such request for
exclusion must state the name, address, and telephone number of the person or entity seeking
exclusion, that the person “requests exclusion from the Class in “In re Oppenheimer Champion
Fund Securities Fraud Class Actions, Case No. 09-cv-386-JLK-KMT,” and must be signed and
dated by such person. Such persons requesting exclusion are also directed to state: (i) the name
of the broker at which such person or entity held Champion Income Fund shares, if any; (ii) the
date, number and share price of each Champion Income Fund share purchase and sale made
during the period from January 1, 2006 through December 31, 2008, inclusive, and the dollar
amount of dividends earned thereon, through December 31, 2008 or the date of sale of such
shares, if earlier; and (iii) the number of Champion Income Fund shares that such persons held
on December 31, 2005. The request for exclusion shall not be effective unless it provides all of

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the required information and is made within the time stated above, or the exclusion is otherwise
accepted by the Court.
12.

Class Members timely and validly requesting exclusion from the Class as set forth

in Paragraph 11 shall not be eligible to receive any payment out of the Net Settlement Fund as
described in the Stipulation and Notice, unless otherwise ordered by the Court.
13.

Any Member of the Class may appear at the Settlement Hearing and show cause,

if he, she or it has any reason why the proposed Settlement of the Action 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 Distribution should or should not be approved, or why attorneys’ fees
and expenses should or should not be awarded to Class Counsel or Lead Plaintiffs; provided,
however, that no 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 Distribution, or the
attorneys’ fees and expenses to be awarded to Class Counsel or Lead Plaintiffs, unless that
person or entity has delivered by hand or sent by mail to the parties below a written objection
complying with the requirements set forth in the Notice, and copies of any papers and briefs,
such that they are postmarked on or before August 31, 2011 and filed with the Court:
Clerk of the Court
Alfred A. Arraj United States Courthouse
Room A105
901 19th Street
Denver, Colorado 80294-3589
Jonathan M. Plasse
Labaton Sucharow LLP
140 Broadway
New York, New York 10005

Peter G. Rush
K&L Gates LLP
70 West Madison Street, Suite 3100
Chicago, IL 60602

William K. Dodds

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Dechert LLP
1095 Avenue of the Americas
New York, NY 10036
Any Member of the Class who does not make his, her or its objection in the manner provided
herein and in the Notice shall be deemed to have waived such objection and shall forever be
foreclosed from making any objection to the fairness or adequacy of the proposed Settlement as
set forth in the Stipulation, to the Plan of Distribution, or to the award of attorneys’ fees and
expenses to Class Counsel or Lead Plaintiffs, unless otherwise ordered by the Court.
14.

Attendance at the hearing is not necessary; however, persons wishing to be heard

orally in opposition to the approval of the Settlement, the Plan of Distribution, and/or the
application for an award of attorneys’ fees and other expenses to Class Counsel or Lead
Plaintiffs are required to indicate in their written objection their intention to appear at the
hearing, as set forth in the Notice. Persons who intend to object to the Settlement, the Plan of
Distribution, and/or the application for an award of attorneys’ fees and expenses to Class
Counsel or Lead Plaintiffs and desire to present evidence at the Settlement Hearing must include
in their written objections the identity of any witnesses they may call to testify and exhibits they
intend to introduce into evidence at the Settlement Hearing, and comply with the requirements in
the Notice. Class Members do not need to appear at the hearing or take any other action to
indicate their approval.
15.

The passage of title and ownership of the Settlement Fund to the Escrow Agent in

accordance with the terms and obligations of the Stipulation is approved. No person who is not a
Class Member or Lead Counsel shall have any right to any portion of, or to any distribution of,
the Net Settlement Fund unless otherwise ordered by the Court or otherwise provided in the
Stipulation.

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16.

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 and/or further order(s) of the
Court.
17.

The administration of the proposed Settlement and the determination of all

disputed questions of law and fact with respect to the validity of any claim or right of any person
or entity to participate in the distribution of the Settlement Fund shall be under the authority of
this Court.
18.

The Defendants shall not have any responsibility for or liability with respect to

the Plan of Distribution or any application for attorneys’ fees or reimbursement of expenses
submitted by Class Counsel or Lead Plaintiffs, and such matters will be considered separately
from the fairness, reasonableness and adequacy of the Settlement.
19.

At or after the Settlement Hearing, the Court shall determine whether the

Settlement and any application for attorneys’ fees or reimbursement of expenses by Class
Counsel or Lead Plaintiffs shall be approved.
20.

All reasonable expenses incurred in identifying and notifying Class Members, as

well as administering the Settlement, including the payment of Taxes, 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 Lead Plaintiffs nor Class Counsel shall have any obligation to
repay any amounts actually and properly disbursed from the Gross Settlement Fund.
21.

This Preliminary Approval Order, the Stipulation and its terms, the negotiations

leading up to this Stipulation, the fact of the Settlement, and the proceedings taken pursuant to
the Settlement, shall not: (1) be construed as an admission of liability or an admission of any

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claim or defense on the part of any party, in any respect; (2) form the basis for any claim of
estoppel by any third party against any of the Released Defendant Parties; or (3) be admissible in
any action, suit, proceeding, or investigation as evidence, or as an admission, of any wrongdoing
or liability whatsoever by any of the Released Defendant Parties or as evidence of the truth of
any of the claims or allegations contained in any complaint filed in the Action or deemed to be
evidence of or an admission or concession that Lead Plaintiffs or any Class Members have
suffered any damages, harm, or loss. Neither this Preliminary Approval Order, the Stipulation,
nor any of their terms and provisions, nor any of the negotiations or proceedings connected with
them, nor any action taken to carry out this Preliminary Approval Order or the Stipulation by any
of the Parties shall be referred to, offered into evidence, or received in evidence in any pending
or future civil, criminal or administrative action or proceeding, except in a proceeding to enforce
this Preliminary Approval Order, the Stipulation, or to enforce any insurance rights, to defend
against the assertion of Released Claims (including to support a defense or counterclaim based
on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or
reduction), or by Lead Counsel to demonstrate its adequacy to serve as class counsel pursuant to
Federal Rule of Civil Procedure 23(g) (or its state law analogs), or as otherwise required by law.
22.

Pending final determination of whether the Settlement should be approved, Lead

Plaintiffs, all Class Members, and each of them, and anyone who acts or purports to act on their
behalf, shall not institute, commence, prosecute or assist, without legal compulsion, in the
prosecution of any action which asserts a Released Claim against any of the Released Defendant
Parties.
23.

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 Gross

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Settlement Fund, or any portion thereof, is returned to the 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.
24.

The Court reserves the right to adjourn the date of the Settlement Hearing without

further notice to the Members of the Class, and retains jurisdiction to consider all further
applications arising out of or connected with the proposed Settlement. The Court may approve
the Settlement and/or the Plan of Distribution, with such modifications as may be agreed to by
the Settling Parties, if appropriate, without further notice to the Class.

DATED: Wednesday, June 1, 2011

John L. Kane
SENIOR U.S. DISTRICT JUDGE

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