Del Rosario, et al v. King & Prince, et al

Filing 412

ORDER Preliminarily Approving Settlement, Approving Form of Notice, and Setting Fairness Hearing. Fairness Hearing set for June 4, 2012. Signed by Judge Dudley H. Bowen on 04/04/2012. (thb)

FILED
U.S. DISTRICT COURT
AUGUSTA OV,

IN THE UNITED STATES DISTRICT COURT I OR —11 P Z. 3q
FOR THE SOUTHERN DISTRICT OF GEORGIA
BRUNSWICK DIVISION
CLERJUJk

L

LEONARDO DEL ROSAJ(IO and
EVELYN WEST, Individually and on
Behalf of a Class of all Others Similarly
Situated,
Plaintiffs,
V.

Civil Action File
No. 2:04-C V-00036-DHB-JEG

KING & PRINCE SEAFOOD
CORPORATION, et al.,
Defendants.

ORDER PRELIMINARILY APPROVING SETTLEMENT, APPROVING
FORM OF NOTICE, AND SETTING FAIRNESS HEARING
This action involves a claim for an alleged violation of the Employee Retirement Income
Security Act of 1974, as amended, 29 U.S.C. § 1001, et seq. ("ERISA"), with respect to the
King & Prince Seafood Corporation Employee Stock Ownership Plan (the "ESOP").
Presented to the Court for preliminary approval is a settlement of this action as against all
remaining Defendants (the "Settlement").' The terms of the Settlement are set out in a
Stipulation and Agreement of Settlement (the "Settlement Agreement"), executed by the Parties'
respective attorneys as of March 22, 2012, and filed with the Court on March 22, 2012.2

The claims against Defendant Guy Still were dismissed as part of this Court's summary
judgment order. [D.E. 301.] Additionally, Plaintiffs recently filed an unopposed motion to
dismiss the ESOP, with prejudice, as a party defendant in the Action,. [D.E. 406.]
2

Capitalized terms not otherwise defined in this order shall have the same meaning as ascribed
to them in the Settlement Agreement. References to a Paragraph in the Settlement Agreement
include its relevant subparts.

Upon reviewing the Settlement Agreement, it is hereby ORDERED, ADJUDGED, AND
DECREED as follows:
1.

Preliminary Find in gs Regarding Proposed Settlement, The Court preliminarily

finds that: (a) the proposed Settlement resulted from informed, extensive arm's-length
negotiations and third party mediation; (b) Class Counsel has concluded that the proposed
Settlement is fair, reasonable, and adequate; (c) the proposed settlement is sufficiently fair,
reasonable, and adequate to warrant sending notice (the "Notice") of the Settlement to the Class
Members.
2.

Fairness Hearing. A hearing is scheduled for

04vmt ' ,

2012 (the "Fairness

Hearing") to determine, among other things:
(a)

Whether the Settlement should be approved as fair, reasonable, and
adequate to the Class Members;

(b)

Whether the litigation should be dismissed with prejudice pursuant to the
terms of the Settlement;

(c)

Whether the Notice provided for by the Settlement Agreement and this
Order was provided and: (1) was appropriate and reasonable and
constituted due, adequate, and sufficient notice to all persons entitled to
notice; and (ii) met all applicable requirements of the Federal Rules of
Civil Procedure, and any other applicable law,

(d)

Whether the Plan ofAllocation proposed by Class Counsel should be
approved; and

6194151.1

2

(e)

Whether the application for attorneys' fees and expenses filed by Class
Counsel should be approved.

3.

Notice. A proposed form of Notice to Class Members is attached to the

Settlement Agreement as Exhibit "C" and it attached hereto as Exhibit 1. With respect to such
form of Notice, the Court finds that such form fairly and adequately: (a) describes the terms and
effect of the Settlement Agreement and of the Settlement; (b) notifies the Class Members that
Class Counsel will seek from the Settlement Fund an award of attorneys fees and reimbursement
of expenses; (d) notifies the Class Members of the purpose, time and place of the Fairness
Hearing; and (e) describes how the recipients of the Notice may object to any of the relief
requested. The Court directs that Class Counsel shall:
444jl)

(a)

Within M (1) days of the entry of this Order, cause the Notice, with such
non-substantive modifications thereto as may be agreed upon by the

Parties, to be sent to each Class Member. Such Notice shall be sent either
by e-mail or first-class mail, postage prepaid, to the Person's last known
address as set forth in the records previously produced by King & Prince
Seafood Corporation, or to such other more current address if known by
Class Counsel.
(b)

Within two (2) days of the entry of this Order, cause the Notice to be
published on the website identified therein.

At or before the Fairness Hearing, Class Counsel shall file with the Court a statement of timely
compliance with the foregoing mailing.

6194151.1

3

4.

Objections to Settlement. Any Class Member who wishes to object to the

fairness, reasonableness, or adequacy of the Settlement, to the Plan ofAllocation, to any term of
the Settlement Agreement, or to the proposed award of attorneys' fees and expenses, may file and
serve an Objection in accordance with the procedures set forth in the Notice no later than five (5)
days before the Fairness Hearing.
5.

Appearance at Fairness Hearing. Any objector who files and serves a timely,

written objection in accordance with paragraph 4 above, may also appear at the Fairness
Hearing either in person or through counsel retained at the objector's expense. Objectors or their
attorneys intending to appear and be heard at the Fairness Hearing must follow the procedures
set forth in the Notice and must also file a written notice of such intent with the Clerk of this

Court no later than five (5) days before the hearing. Any objector who does not timely file and
serve a notice of intention to appear in accordance with this paragraph and the procedures set
forth in the Notice shall not be permitted to appear at the Fairness Hearing, except for good
cause shown.
6.

Service of japers. Defendants' Counsel and Class Counsel shall promptly furnish

each other with copies of any and all objections that come into their possession.

lL4t(/O)
7.

Additional Filings. No later than five (5) days following the entry of this Order,

Class Counsel shall file motions for final approval of the Settlement, approval of the proposed
Plan ofAllocation, and an application for award of attorneys' fees and cost reimbursement. Any
opposition thereto shall be filed no later than five (5) days before the Fairness Hearing. Any
reply if necessary shall be filed before the Fairness Hearing. These submission shall be heard at

the Fairness Hearing.

6194151.1

4

S.

Termination of Settlement. This Order shall become null and void, and shall be

without prejudice to the rights of the parties, all of whom shall be restored to their respective
positions existing immediately before the execution date of the Settlement Agreement, if the
Settlement Agreement is terminated in accordance with Paragraph 9 thereof in such event,
Paragraph 9 of the Settlement Agreement shall govern the rights of the parties.
9.

Use of Order. In the event this Order becomes of no force or effect, it shall not be

construed or used as an admission, concession, or declaration by or against the Defendants or the
Plaintiffs.
10.

Continuance of Rearing. The Court may continue the Fairness Hearing without

further written notice.
SO ORDERED this

day of

2012.

United States District Court

6194151.1

5.

rN

rmmm^

.t

4

IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF GEORGIA
BRUNSWICK DIVISION
LEONARDO DEL ROSARIO and )
EVELYN WEST, individually and on behalf)
of a Class of all Others Similarly Situated, )
)
Plaintiffs,
)
)
V.

)

KING & PRINCE SEAFOOD
CORPORATION, et al.,
Defendants.

CV204-036

)
)
)
)
)

NOTICE OF PROPOSED SETTLEMENT OF THIS CLASS ACTION
TO: ALL FORMER EMPLOYEES OF KING & PRINCE SEAFOOD
CORPORATION WHO TERMINATED EMPLOYMENT FOR A REASON
OTHER THAN DEATH, DISABILITY OR RETIREMENT AT AGE 65,
AND WHO RECEIVED A DISTRIBUTION FROM THE COMPANY'S
EMPLOYEE STOCK OWNERSHIP PLAN DURING PLAN YEARS 1998
THROUGH 2001, HAD AN ESOP ACCOUNT BALANCE IN EXCESS OF
$5,000 AT THE TIME OF THEIR DISTRIBUTION AND RECEIVED A
CASH OR CASH ROLLOVER DISTRIBUTION.
THIS NOTICE RELATES TO A CLASS ACTION LAWSUIT
THAT MAY AFFECT YOU AND YOUR LEGAL RIGHTS.
PLEASE READ CAREFULLY.
WHAT IS THIS NOTICE ABOUT?
This notice is about a proposed settlement of the class action lawsuit that was filed
against the King & Prince Seafood Corporation (the "Company"), the Company's Employee
Stock Ownership Plan ("ESOP") and three of the ESOP's trustees (the "Trustees") (collectively
the "Defendants") in connection with the Defendants' administration of the ESOP. You are
receiving this notice because you are a member of the class covered by the lawsuit.
THE CASE
The class, as certified, contains 162 members. The case was tried before the Court in
October 2009. The decision of the Court of December 8, 2009, found that the Defendants
violated federal law by failing to inform members of the class of their right to elect to receive a

distribution of their ESOP account balances in the form of company stock and their right to sell
the stock back to the Company during one of two "put option periods" after the stock price had
been reappraised. The Court further found that the class members, if fully informed, likely
would have elected to receive their distributions in the form of stock and likely would have sold
the stock back to the Company during the second put-option period. The Court further
concluded that it lacked authority under controlling decisions of the United States Supreme
Court to award money to compensate class members for the harm they likely suffered as a result
of the Defendants' violations. Plaintiffs appealed and Defendants cross-appealed. While the
matter was on appeal, the United States Supreme Court decided the case of Cigna Corp. V.
Amara, U.S. -, 131 S.Ct. 1866 (2011), a decision that held that federal courts can award
money to compensate individuals for harm that they suffer as a result of an ERISA plan
fiduciary's breach of duty. Id. at 1878. By decision entered June 28, 2011, the United States
Court of Appeals for the Eleventh Circuit vacated the District Court's prior judgment and
remanded this action to the District Court for reconsideration in light of the Amara decision. Del
Rosario v. King & Prince Seafood Corp., 2011 WL 2555822 (1 1th Cir.)
Upon remand, this Court directed the parties to brief the impact of the Amara decision "on
the issues before the Court. The parties briefed their respective positions and simultaneous' ly
began settlement negotiations. The parties subsequently involved the services of Terrance
White, Esquire, of Daytona Beach, Florida, a talented mediator who had previously mediated
this matter without success. Over the following months, there were a number of interchanges of
information between the parties and through Mr. White. Mr. White subsequently concluded that
the positions of the parties had reached the point that it was reasonable to meet again in person to
continue the mediation. The parties gathered at the offices of Bryan Cave in Atlanta on Monday,
February 20, 2012. By the end of the day, the parties had reached a settlement that was
memorialized in a preliminary term sheet. The parties have subsequently reduced their
agreement to the settlement agreement that has been submitted to the Court for approval and
preliminarily approved by the Court.
It is undisputed that: (i) there are 162 members of the class; and (ii) that had each of these
class members elected to receive a stock distribution instead of cash or cash roll-over distribution
from the ESOP, and had they sold that stock back to the Company in the second put-option
period, they would have collectively received $1,640,518.08 more than they collectively
received when they received their respective cash or cash roll-over distributions.

THE SETTLEMENT
The proposed settlement provides that the Defendants will pay $2,875,000 to settle all
claims. Class counsel will apply to be paid a fee from this fund and for reimbursement of their
expenses. The fee applied for will be one third of the fund. However, the amount of the fee and
expenses will be set by the Court at the hearing set for
2012.
If the settlement is approved by the Court, the approved fees and expenses will be paid
from the settlement fund and the balance of the settlement fund will be paid to you and the other
class members under a plan of allocation as approved by the Court.

If the settlement is approved by the Court and the Court's order is not appealed, you
should receive your check for your share of the settlement within sixty days after the settlement
is finally approved.
The Settlement Agreement and the application of Class counsel for fees and
reimbursement of expenses can be viewed at www.bellbrigham.com .

WHAT ARE MY CHOICES
You do not have to do anything to participate in the settlement. Our records indicate that
you are a member of the Class and you will therefore receive a distribution of a share of the net
settlement proceeds if the proposed settlement is approved by the Court. The Court has set a
bearing for , 2012, at o'clock at the United States Courthouse, 801
Gloucester Street, Brunswick, Georgia. You do not need to attend the hearing to receive money
from the settlement.
You have a right to object to the proposed settlement or to object to Class counsel's
application for fees and reimbursement of expenses. You may do so by filing a written objection
with the Clerk of the United States District Court at the Brunswick courthouse. An objection
should set out the reasons for the objection. The deadline to file an objection is
2012.
You also have a right to appear at the hearing on
2012, and be heard. To
do so, you must file a written request to be heard at the hearing. The deadline to file a request to
be heard is
,2012.

WHO IS REPRESENTING THE CLASS?
The Court has appointed Leonardo Del Rosario and Evelyn West to serve as class
representatives, and has appointed the following attorneys to represent the class:
John C. Bell, Jr.
Leroy W. Brigham
BELL & BRIGHAM
457 Greene Street
Augusta, Georgia 30901
[phone]

James Lee Ford, Sr.
JAMES LEE FORD, P.C.
Building U, Suite 100
6111 Dunwoody Road
Atlanta, Georgia 30328
[phone]

Helen Cleveland
CLEVELAND GILJ3REATH LLC
4197 Sentinel Post Rd., NW
Building 2
Atlanta, GA 30327-3905
[phone]

DO I NEED TO HIRE A LAWYER?
The Court has appointed the lawyers listed above to represent the Class. As a result, it is
not necessary for you to hire a lawyer. However, you may hire your own lawyer if you wish. If
you choose to hire your own lawyer, you will be responsible for paying his or her fees.

WHAT SHOULD I DO IF I HAVE QUESTIONS?
If you have questions about the case, you may ca 1 one of the attorneys appointed by the
Court to represent the class. if you wish to read more about the lawsuit, the complaint and other
papers that have been filed in the case are available for your review at the offices of the lawyers
listed above, and at the Clerk's office which is located at 801 Gloucester Street, Suite 220,
Brunswick, GA 31520.
DO NOT CALL THE CLERK OF COURT IF YOU HAVE QUESTIONS.
PLEASE ADDRESS ALL QUESTIONS TO ONE OF THE
ATTORNEYS FOR THE CLASS LISTED ABOVE.

Clerk, United States District Court
Southern District of Georgia
DATED:

.2012.