Pena v. iBio Inc. et al

Filing 25

MEMORANDUM ORDER regarding the competing motions for appointment of a lead plaintiff and selection of counsel (see D.I. 8 , 11 , 15 ). The Court will hold a hearing regarding these applications on 2/17/2015, at 10:00 AM in Courtroom 6A before Judge Richard G. Andrews (see Memorandum Order for further details). Signed by Judge Richard G. Andrews on 1/30/2015. (nms)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE

JUAN PENA, Individually And On Behalf Of
All Others Similarly Situated,
Plaintiff;

v.

Civil Action No. 14-1343-RGA

iBIO, INC. and ROBERT B. KAY,
Defendants.

MEMORANDUM ORDER

I have three competing motions for appointment of a lead plaintiff and selection of
counsel. (D.I. 8 at 11, 15). One of the motions has been more or less withdrawn. (D.I. 18). I
follow the same process in deciding the other two motions as I previously did in OF/ Risk
Arbitrages v. Cooper Tire & Rubber Co., 2014 WL 3886021 (D. Del. Aug. 6, 2014).

It is undisputed that Vamsi Andavarapu has the "largest financial interest in the relief
sought by the class." (D.I. 20 at p. 5).
In terms of typicality and adequacy, the main objection is that Andavarapu's initial
certification was erroneous. He certified that he had bought 100,000 shares on October 16, 2014,
at $2.42 per share. (D.1. 17-2). The purchase price was well above the price that shares were
actually trading for on October 16, 2014. One of the competing candidates noticed this, and
suggested it might mean that Andavarapu's claim could be subject to unique defenses. But for
the competing candidate's alertness, there is no indication this error would have been brought to
my attention. Andavarapu submitted an "amended" certification describing his purchases as

being 100,000 shares on October 13, 2014, at $2.45 per share, and 50,000 shares on October 16,
2014, at $1.91 per share. (D.I. 23-1). I think those purchase prices are consistent with what the
stock was selling for on October 13 and 16, 2014. Thus, I do not think there is any actual
suggestion of "atypicality." It does raise concerns about adequacy, however. Andavarapu
offered that he is willing to serve as class representative, and provide testimony, on the same
preprinted form on which the only individual information was wrong as to date, amount, and
purchase price. Andavarapu has hired experienced counsel, but one might expect experienced
counsel would ask for what I assume is easily available documentation of Andavarapu's
purchases. If counsel did so ask, counsel apparently did no follow-up.
Thus, I will set a hearing at which Andavarapu will be expected to explain how he is
going to manage and direct this litigation. I expect he will explain why he swore to false
information.
Further, if I do accept Andavarapu as lead plaintiff, I will also consider whether I should
accept his counsel as lead counsel.
In terms of selection of lead counsel, while there is a presumption in favor of lead
plaintiffs selection of counsel, there are a number of factors for the Court to consider. See OF!,
2014 WL 3886021, at* 12 (identifying five factors). I have sufficient information on factor (4),
but not on any of the others. Thus, I request that counsel submit Andavarapu's retainer
agreement by February 10, 2015, and that Andavarapu also be prepared to testify about the four
factors so far unaddressed.
The Court will hold a hearing on the above on February 17, 2015, at 10 a.m. Counsel for
the competing candidates may cross-examine Andavarapu at this hearing if they so choose.

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IT IS SO ORDERED this~ day of January 2015.