Israni v. First Mercury Financial Corporation et al

Filing 33

ORDER granting preliminary approval of settlement and directing notice to the class re 31 Stipulation, filed by Sanjay Israni. Settlement/Class Certification Hearing set for 6/30/2011 09:30 AM before District Judge George Caram Steeh Signed by District Judge George Caram Steeh. (MBea)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MICHIGAN
SOUTHERN DIVISION
)
)
SANJAY ISRANI, on behalf of himself and all
)
others similarly situated,
)
)
Plaintiff,
)
)
v.
)
)
FIRST MERCURY FINANCIAL CORP.,
)
RICHARD H. SMITH, JEROME M. SHAW,
)
GEORGE R. BOYER, THOMAS B.
)
KEARNEY, LOUIS J. MANETTI, BRADLEY
)
J. PICKARD, HOLLIS W. RADEMACHER
STEVEN A. SHAPIRO, WILLIAM C. TYLER, )
)
and FAIRFAX FINANCIAL HOLDINGS
)
LIMITED,
)
)
Defendants. )
)

Civil Action No. 2:10-cv-14482GCS-MAR

ORDER GRANTING PRELIMINARY APPROVAL OF SETTLEMENT AND
DIRECTING NOTICE TO THE CLASS
The parties having made an application, pursuant to Rule 23 of the Federal Rules of Civil
Procedure, for an Order approving the settlement (the “Settlement”) of the above-captioned
action (the “Action”) in accordance with a Stipulation of Settlement effective as of March 30,
2011 (the “Stipulation”), which (along with the defined terms therein) is incorporated herein by
reference and which, together with the accompanying documents, sets forth the terms and
conditions for the proposed Settlement of the Action between plaintiff Sanjay Israni (“Plaintiff”)
on the one hand and First Mercury Financial Corp. (“FMR”), Richard H. Smith, Jerome M.
Shaw, George R. Boyer, Thomas B. Kearney, Louis J. Manetti, Bradley J. Pickard, Hollis W.
Rademacher, Steven A. Shapiro, William C. Tyler, (the “Director Defendants” and, collectively

with FMR, the “FMR Defendants”) and Fairfax Financial Holdings Limited (the “Fairfax
Defendants”) (all defendants in the Action are collectively referred to herein as “Defendants”) on
the other, and for a judgment dismissing Plaintiff’s claims with prejudice upon the terms and
conditions set forth therein; and the Court having read and considered the Stipulation and the
accompanying documents; and all parties having consented to the entry of this Order;
IT IS HEREBY ORDERED this 14th day of April, 2011, that:
1.

For purposes of the Settlement only, and preliminarily, for purposes of this Order,

this Action shall proceed as a class action, pursuant to Rules 23(a), 23(b)(1) and 23(b)(2) of the
Federal Rules of Civil Procedure, by the Plaintiff in the Action, on behalf of all record and
beneficial stockholders of FMR common stock (other than Fairfax, the Director Defendants,
members of the immediate families of the Director Defendants or their successors, heirs, assigns
or legal representatives, and any firm, trust, corporation, or other entity in which any Defendant
has a controlling interest) during the period from the close of business on October 27, 2010
through the Effective Time of the Merger, including any and all of their respective successors in
interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or
transferees, immediate and remote, and any person or entity acting for or on behalf of, or
claiming under any or each of them (the “Class”), and by Plaintiff’s counsel as class counsel.
2.

The Court preliminarily approves the Settlement of the Action on the terms and

conditions set forth in the Stipulation as being fair, reasonable, and adequate to warrant sending
notice of the proposed settlement to the Class and further consideration of the proposed
settlement at the Hearing described in paragraph 3 below.
3.

A hearing shall be held on June 30, 2011, at 9:30 a.m., before the United States

District Court for the Eastern District of Michigan, Theodore Levin U.S. Courthouse, 231 W.

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Lafayette Blvd., Courtroom #236, Detroit, MI 48226 (the “Hearing”), for the purposes of:
(a) determining whether the proposed Settlement of the Action on the terms and conditions
provided for in the Stipulation is fair, reasonable, adequate and in the best interests of the Class
and should be approved by the Court, and whether the Order and Final Judgment provided for in
the Stipulation should be entered thereon; (b) determining whether the Action should be finally
certified as a class action; (c) considering the application of Plaintiff’s counsel for an award of
attorneys’ fees and expenses to be paid by FMR; and (d) ruling on such other matters as the
Court may deem appropriate. The Court may adjourn the Hearing (including consideration of
the application for an award of attorneys’ fees and expenses) or any adjournment thereof without
further notice to the Class other than by announcement at the Hearing or any adjournment
thereof.
4.

(a)

The Court approves, in form and content, the Notice of Pendency of Class

Action, Stipulation of Settlement, Settlement Hearing and Right to Appear (the “Notice”)
attached as Exhibit C to the Stipulation and finds that the mailing and distribution of the Notice
substantially in the manner and form set forth in Paragraph 4(b) of this Order meets the
requirements of Rule 23 and due process, is the best notice practicable under the circumstances,
and shall constitute full and adequate notice to all persons entitled thereto.
(b)

Within 14 calendar days of the entry of this Order, FMR shall commence,

by first class mail, dissemination of the Notice. Defendants shall use reasonable efforts to give
notice to beneficial owners of FMR’s common stock by making additional copies of the Notice
available to any record holder requesting the same for the purpose of distribution to beneficial
owners. Defendants will pay all costs and expenses related to the Notice. Ten days before the
Hearing, Defendants shall file proof, by affidavit, of such mailing.

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5.

At the Hearing, any member of the Class who desires to do so may appear

personally or by counsel, providing that an appearance is filed and served as hereinafter
provided, and show cause, if any, why the Settlement of Plaintiff’s claims in the Action should
not be approved as fair, reasonable, adequate and in the best interests of the Class, why judgment
should not be entered dismissing Plaintiff’s claims asserted against all of the defendants with
prejudice against Plaintiff, and the Class, as determined by the Court, or why the Court should
not grant an allowance of fees and expenses to Plaintiff’s counsel for their services herein and
expenses incurred. Provided, however, that no member of the Class or any other person
opposing the Settlement or any provision thereof shall be heard or entitled to contest the
approval of the terms and conditions of the Settlement and, if approved, the judgment to be
entered thereon and the allowance of fees and expenses to Plaintiff’s counsel, and no papers or
briefs submitted by any member of the Class or any other person shall be received and
considered, except by Order of the Court for good cause shown, unless, no later than ten business
days prior to the Hearing, copies of (a) a written notice of intention to appear, (b) proof of
membership in the Class, (c) a detailed statement of such person’s specific objections to any
matter before the Court, (d) the grounds for such objections and any reasons for such person’s
desiring to appear and to be heard, as well as all documents and writings such person desires this
Court to consider, and (e) a statement advising the Court and the parties of any court proceeding
in which said objector and his counsel has made an objection to a class action settlement within
the past three years identifying the past objections made by case name, docket number and court,
shall be served upon the following counsel:
Gregory M. Nespole
Matthew M. Guiney
Wolf Haldenstein Adler Freeman & Herz LLP
270 Madison Avenue
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New York, NY 10016
Plaintiff’s Counsel
Jeffrey A. Rossman
McDermott Will & Emery LLP
227 West Monroe Street
Chicago, IL 60606-5096
Counsel for FMR Defendants
Alan S. Goudiss
Shearman & Sterling LLP
599 Lexington Avneue
New York, NY 10022
Counsel for Fairfax Defendants
and then filed with the Clerk for the Court. Unless the Court otherwise directs, no member of the
Class shall be entitled to object to the Settlement or to the judgment to be entered herein, or to
the award of attorneys’ fees and expenses to Plaintiff’s counsel, or otherwise to be heard, except
by serving and filing written objections as described above. Any person who fails to object in the
manner provided above shall be deemed to have waived such objection and shall forever be
barred from making any such objection in this Action or in any other action or proceeding.
6.

The parties shall file all papers in support of the proposed Settlement, and

Plaintiff’s counsel shall file their application for an award of attorneys’ fee and expenses, no later
than five days before the Hearing.
7.

If the Settlement provided for in the Stipulation is approved by the Court

following the Hearing, judgment shall be entered in the form attached as Exhibit D to the
Stipulation.
8.

Except as otherwise provided in the Stipulation, all pre-trial proceedings in this

Action, except for such proceedings ordered by the Court with respect to approval of the
Settlement, are stayed and suspended until further order of this Court.
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9.

In the event that: (a) the Court declines, in any respect (except for a disallowance

or modification of the fees and/or expenses sought by Plaintiff’s counsel) to enter the Order and
Final Judgment provided for in the Stipulation and any one of the parties hereto fails to consent
to the entry of another form of order in lieu thereof; (b) the Court disapproves the Settlement
proposed in the Stipulation, including any amendments thereto agreed upon by all of the parties;
or (c) the Court approves the Settlement proposed in the Stipulation or any amendment thereto
approved by all of the parties, but such approval is reversed or substantially modified on appeal
and such reversal or modification becomes final by a lapse of time or otherwise; then, in any of
such events, the Stipulation, the Settlement proposed herein (including any amendments thereof),
any qualification of Plaintiff as appropriate representative of the Class or of Plaintiff’s counsel as
counsel to the Class, and any actions taken or to be taken with respect to the Settlement proposed
in the Stipulation and the Order and Final Judgment to be entered, shall be of no further force or
effect and shall be null and void, and shall be without prejudice to any of the parties hereto.
10.

The Court reserves the right to approve the Stipulation and the Settlement with

modifications and without further notice to members of the Class, and retains jurisdiction over
the Action to consider all further applications arising out of or connected with the proposed
Settlement.
s/George Caram Steeh
United States District Judge
Dated: April 13, 2011
Proof of Service
I certify that a copy of this order was served upon
the parties/attorneys of record by electronic and/or
ordinary mail.
s/Marcia Beauchemin
Deputy Clerk
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