Moses v. Apple Hospitality REIT, Inc. et al

Filing 68

ORDER granting 47 Motion to Certify Class. The proposed Order Preliminarily Approving Class Action Settlement, Preliminarily Certifying Settlement Class, and Appointing Interim Class Counsel, filed as Docket Entry 67, is hereby approved and entered as an Order of the Court. A FINAL FAIRNESS HEARING IS SCHEDULED FOR JANUARY 16, 2018 AT 4:30 PM IN COURTROOM 13D. Ordered by Magistrate Judge Steven M. Gold on 9/19/2017. (Gold, Steven)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SUSAN MOSES, on behalf of herself and all
others similarly situated,

Case No. 1:14-cv-03131 (SMG)

Plaintiff,
v.
APPLE HOSPITALITY REIT INC.,
Defendant.

[PROPOSED] ORDER PRELIMINARILY APPROVING CLASS ACTION
SETTLEMENT, PRELIMINARILY CERTIFYING SETTLEMENT CLASS, AND
APPOINTING INTERIM CLASS COUNSEL
GOLD, STEVEN M., U.S. Magistrate Judge:
WHEREAS, the above-titled putative class action (the “Class Action” or the “Litigation”)
is pending before the Court;
WHEREAS, Plaintiff and Defendant have entered into a Stipulation of Settlement dated
August 25, 2017 which is subject to review and approval under Rule 23 of the Federal Rules of
Civil Procedure and which, together with the exhibits thereto, sets forth the terms and conditions
for the proposed settlement of the Litigation (the “Settlement”) and the dismissal of the
Litigation with prejudice;
WHEREAS, the Court has read and considered the Stipulation of Settlement1 and
exhibits thereto, and the accompanying documents;

1

Unless otherwise stated, all capitalized terms used herein have the meanings defined in the Stipulation of
Settlement.

1

WHEREAS, the Counsel for Plaintiff have submitted, and the Court has reviewed, a
motion and accompanying memorandum of law supporting preliminary approval of the proposed
Settlement; and
WHEREAS, the Parties to the Settlement have consented to the entry of this Order, the
Court:
NOW, THEREFORE, HEREBY ORDERS, ADJUDGES AND DECREES THAT:
1.

Pursuant to Rule 23(a) and Rule 23(b)(3) of the Federal Rules of Civil

Procedure, and for the purposes of the Settlement only, the Court preliminarily certifies the
following Settlement Class (the “Class”): Any person in the United States who participated in the
DRIPs for Apple REIT Seven and/or Apple REIT Eight from July 17, 2007 to June 27, 2013
inclusive2.
2.

Pursuant to Fed. R. Civ. P. 23, and for purposes of this Settlement only, the Court

hereby preliminarily appoints Susan Moses as class representative of the Class (“Class
Representative”).
3.

The Court preliminarily finds that the prerequisites for maintaining a class action

under Rule 23(a) of the Federal Rules of Civil Procedure have been satisfied for the Settlement
Class in that: (a) the number of Class members is so numerous that joinder of all members is
impracticable; (b) there are questions of law and fact common to each member of the Class; (c)
the claims of the Class Representative are typical of the claims of the members of the Class she
seeks to represent; and (d) Plaintiff will fairly and adequately represent the interests of the Class.

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Excluded from the proposed Class are: (a) Defendant, any entity in which Defendant has a controlling interest or
which has a controlling interest in Defendant; (b) Defendant’s legal representatives, predecessors, successors and
assigns; and (c) any persons who affirmatively exclude themselves from the Class pursuant to the procedures
described in the Notice.

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4.

Plaintiff also satisfies Federal Rule of Civil Procedure 23(b)(3). Common

questions of law and fact predominate and a class action is the superior method available to fairly
and efficiently litigate this class action involving the sale of securities.
5.

Having considered the factors set forth in Fed. R. Civ. P. 23(g)(1) and the

qualifications of Plaintiff’s counsel submitted to the Court, the Court hereby preliminarily
appoints Salas Wang LLC, Eccleston Law, LLC, and Law Office of Christopher J. Gray, P.C. as
Interim Class Counsel.
6.

The Court preliminarily concludes that the Settlement was negotiated in good

faith and is fair, reasonable and adequate, subject to proof to this Court’s satisfaction in
connection with Final Approval. See Fed. R. Civ. P. 23(e). Accordingly, the Court hereby
preliminarily approves the Settlement.
7.

The Court reserves the authority to approve the Settlement with or without

modification and with or without further notice of any kind. The Court further reserves the
authority to enter its Final Order and Judgment approving the Settlement and dismissing the
Claims against Defendant on the merits and with prejudice regardless of whether it has awarded
attorneys’ fees and expenses.
8.

A Final Fairness Hearing (which, from time to time, and without further notice to

the Class other than by filing a notice on the docket in the Class Action in advance of the Final
Fairness Hearing, may be continued or adjourned by order of this Court) will be held by this
Court on January 16, 2018 at 4:30 p.m. for the following purposes:
(a)

to finally determine whether the Class satisfies the applicable prerequisites

for certification under Fed. R. Civ. P. 23(a) and 23(b)(3);

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(b)

to finally determine whether the Settlement should be approved by the

Court as fair, reasonable and adequate and in the best interests of the Class;
(c)

to determine whether a Final Order and Judgment should be entered

pursuant to the Stipulation of Settlement, dismissing the Class Action with prejudice as against
the Plaintiff and the Class;
(d)

to determine whether the proposed Plan of Allocation of the settlement

fund set forth in the Notice is fair and reasonable, and should be approved by the Court;
(e)

to consider any request by counsel for an award of attorneys’ fees and

reimbursement of litigation expenses;
(f)

to hear and determine any objections to the Settlement or to any request by

counsel for an award of attorneys’ fees and reimbursement of litigation expenses; and
(g)
9.

to rule on such other matters as the Court may deem appropriate.

The Court approves the substance and requirements of the Notice, in the form

annexed as Appendix “A” hereto.
10.

No later than October 10, 2017, Interim Class Counsel shall mail, or cause to be

mailed, the Notice to those Class members who can be identified through reasonable effort. Not
later than October 20, 2017, Interim Class Counsel shall also cause a summary notice in the form
annexed hereto as Appendix “B” to be published via PR Newswire or another national wire
service and shall establish a website that will (at a minimum) provide Class members with access
to this Order, the Stipulation of Settlement, the Notice, and all of the papers before the Court on
this motion.
11.

The Court finds that mailing and dissemination of the Notice, as described herein,

constitutes the best notice practicable under the circumstances and is due and sufficient notice of

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the matters set forth in the Notice to all Class Members, and fully satisfies the requirements of
due process and of Rule 23 of the Federal Rules of Civil Procedure.
12.

The Court will consider any objections, and comments in support of or in

opposition to the Settlement, the Plan of Allocation, or any request by counsel for an award of
attorneys’ fees and reimbursement of litigation expenses, only if such comments and any
supporting papers are in writing and filed with the Clerk of the Court, United States District
Court for the Eastern District of New York, 225 Cadman Plaza East, Room 130, Brooklyn, NY
11201, and copies of all such papers are served, on or before December 29, 2017 upon each of
the following by U.S. Mail and e-mail:
Jeffrey M. Salas
SALAS WANG, LLC
73 West Monroe, Suite 219
Chicago, IL 60603
[phone]
[phone] (fax)
[e-mail]
James J. Eccleston
Stephany D. McLaughlin
ECCLESTON LAW, LLC
55 West Monroe, Suite 610
Chicago, IL 60603
[phone]
[phone] (fax)
[e-mail]
Christopher J. Gray
Michael J. Giarrusso
LAW OFFICE OF CHRISTOPHER J. GRAY, P.C.
360 Lexington Avenue, 14th Floor
New York, New York 10017
[phone]
[phone] (fax)
[e-mail]

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Any replies to any objections or comments shall be filed and served no later than January 5,
2018.
13.

Attendance at the Final Fairness Hearing is not necessary; however, persons

wishing to be heard orally with respect to the approval of the Settlement, the Plan of Allocation,
and/or any request by counsel for an award of attorneys’ fees and reimbursement of litigation
expenses, are required to indicate in their written comments or objections their intention to
appear at the Final Fairness Hearing.
14.

Persons who intend to object to the Settlement, the Plan of Allocation, and/or any

request by counsel for an award of attorneys’ fees and reimbursement of litigation expenses and
desire to present evidence at the Final Fairness 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 Final Fairness Hearing. Class members do not need to appear at the hearing or
take any action to indicate their approval.
15.

Any person or entity who fails to object in the manner provided above shall be

deemed to have waived such objection (including the right to appeal), and absent good cause
found by the Court shall forever be barred from making any such objection in the Class Action
or any other action or proceeding or otherwise contesting any aspect of the Settlement, but shall
otherwise be bound by the Final Order and Judgment to be entered and the releases to be given.
16.

All parties are hereby notified that final approval of the Settlement would result in

the dismissal, with prejudice, of all claims in the Litigation.
17.

This Order, the Stipulation of Settlement, and any negotiations, discussions, or

proceedings in connection with this Settlement shall not be offered or received against Defendant
as evidence of, or deemed to be any admission or confession by Defendant, of the truth of any of

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the claims, allegations, facts, subjects, or issues that were or could have been set forth or raised
in the Litigation.
SO ORDERED.
Dated: Brooklyn, New York
19
September __, 2017
____________________________
STEVEN M. GOLD
United States Magistrate Judge

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APPENDIX ''A''

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SUSAN MOSES, on behalf of herself and all
others similarly situated,

Case No. 1:14-cv-03131 (SMG)

Plaintiff,
v.
APPLE HOSPITALITY REIT, INC.,

Defendant.
NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION
AND PLAN OF ALLOCATION
TO:

ALL PERSONS IN THE UNITED STATES WHO ACQUIRED SHARES OF
APPLE REIT SEVEN AND/OR APPLE REIT EIGHT PURSUANT TO THE
APPLE REITS’ DISTRIBUTION REINVESTMENT PLANS (“DRIPs”)
BETWEEN JULY 17, 2007 AND JUNE 27, 2013, INCLUSIVE.
PLEASE READ THIS NOTICE CAREFULLY AND IN ITS ENTIRETY.
YOUR RIGHTS MAY BE AFFECTED BY THE LEGAL PROCEEDINGS IN
THIS ACTION.
IF YOU WISH TO COMMENT IN FAVOR OF THE SETTLEMENT OR
OBJECT TO THE SETTLEMENT, YOU MUST FOLLOW THE DIRECTIONS
IN THIS NOTICE.
YOU MAY BE ELIGIBLE TO RECEIVE MONEY FROM THE SETTLEMENT
OF THIS LAWSUIT.
TO RECEIVE MONEY FROM THIS LAWSUIT, YOU DO NOT NEED TO
SUBMIT ANYTHING. AS SHOWN BELOW, YOU WILL RECEIVE A
VERIFICATION FORM INDICATING YOUR CALCULATED NET AFFECTED
SHARE BALANCE FROM THE SETTLEMENT ADMINISTRATOR AFTER
FINAL APPROVAL OF THE SETTLEMENT. YOU MAY DISPUTE THIS
INFORMATION WITH THE SETTLEMENT ADMINISTRATOR.

IF YOU DO NOT WISH TO PARTICIPATE IN THE SETTLEMENT, YOU MAY
REQUEST TO BE EXCLUDED FROM THE SETTLEMENT BY SUBMITTING
A VALID REQUEST FOR EXCLUSION THAT MUST BE POSTMARKED ON
OR BEFORE DECEMBER 29, 2017. IF YOU RECEIVED THIS NOTICE ON
BEHALF OF A SETTLEMENT CLASS MEMBER WHO IS DECEASED, YOU
SHOULD PROVIDE THE NOTICE TO THE AUTHORIZED LEGAL
REPRESENTATIVE OF THAT SETTLEMENT CLASS MEMBER.
I.

THE PURPOSE OF THIS NOTICE

This Notice is being sent pursuant to Rule 23 of the Federal Rules of Civil Procedure and an
Order of the United States District Court for the Eastern District of New York (the "District
Court") to inform you: (a) of the pendency of a class action lawsuit currently pending in the
District Court under the above caption (the “Action” or the "Class Action") against Apple
Hospitality REIT, Inc. (“AHR” or “Defendant”); (b) that the Class Action has been preliminarily
certified by the District Court to proceed as a class action on behalf of the Class of persons in the
United States who acquired shares of Apple REIT Seven, Inc. (“A7”) and/or Apple REIT Eight,
Inc. (“A8” or, jointly with A7, the “Apple REITs”) pursuant to the Apple REITs’ Distribution
Reinvestment Plants (the “DRIPs”) between July 17, 2007 and June 27, 2013, inclusive
(“Class”); and (c) that a proposed settlement (the "Settlement'') has been reached by Plaintiff and
Defendant (the “Parties”) in the Action.
The District Court has preliminarily approved the Settlement, whose terms are set forth in the
Settlement Agreement, which is available at www.AppleReitSettlement.com. You have received
this Notice because Defendant's records indicate that you may be a member of the Class. This
Notice is designed to inform you of your rights, how you can agree to or dispute the Verification
Form, and how you can comment in favor of the Settlement or object to the Settlement.
If the Settlement is finally approved by the District Court, the Settlement will be binding upon
you, unless you exclude yourself, even if you dispute the Verification Form and even if you
object to the Settlement. If finally approved, the Settlement resolves the Class's claims asserted
against the Defendant.
There will be a hearing on the Settlement (the "Settlement Hearing") before the Hon. Steven M.
Gold, United States Magistrate Judge, at 4:30 p.m. on January 16, 2018, in Courtroom 13-D of
the United States Courthouse, 225 Cadman Plaza East. Brooklyn, New York.
THE FOLLOWING RECITATION DOES NOT CONSTITUTE FINDINGS OF THE
COURT AND SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY
OPINION OF THE COURT AS TO THE MERITS OF ANY CLAIMS OR DEFENSES
ASSERTED BY ANY OF THE PARTIES. IT IS BASED ON STATEMENTS OF THE
PARTIES AND IS SENT FOR THE SOLE PURPOSE OF INFORMING YOU OF THE
EXISTENCE OF THE LAWSUIT AND OF THE UPCOMING SETTLEMENT
HEARING CONCERNING THE SETTLEMENT SO THAT YOU MAY MAKE
APPROPRIATE DECISIONS AS TO STEPS YOU MAY, OR MAY NOT, WISH TO
TAKE IN RELATION TO THE CLASS ACTION.

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II.

BACKGROUND OF THE ACTION

The Class Action arises out of sales of shares in the Apple REITs by A7 and A8 pursuant to their
respective DRIPs. As part of the DRIPs, Defendant represented to Plaintiff and the Class that the
DRIP sale price “[would] be based on the fair market value of [the REITs’] units as of the
reinvestment date as determined in good faith by [their] board[s] of directors from time to time.”1
But Plaintiff alleges that, in reality, the $11.00 DRIP share sale price did not reflect a meaningful
estimate of the underlying or realizable value of the units. The Apple REITs further agreed to
price the DRIP shares utilizing the most recent price at which an unrelated person had purchased
units of the Apple REITs or, if that price was not indicative of fair value, to utilize good faith
judgment in determining the share price of the DRIP. Despite these agreements, throughout the
life of the DRIPs, Apple REITs shares were consistently sold at an artificial price of $11 per
share that did not reflect fair value. It was not until March of 2013 that Defendant, for the first
time, admitted in public filings that—despite representations that the boards of the Apple REITs
would use the stated calculations to determine fair market value—the DRIP price was not
actually based on any appraisal or valuation of the shares.
Plaintiff alleges that as a result of Defendant’s misconduct, DRIP participants were overcharged
for each share they received. By virtue of Defendant’s failure to follow the methodology in the
S-3, Plaintiff and the Class were further damaged by receiving fewer Apple REITs shares in
connection with the DRIPs than they would have received if the shares had been valued in good
faith and in accordance with the methodology set forth in the Apple REITs’ respective Form S3’s.
Plaintiff commenced this action on April 22, 2014 by filing a class action complaint against
AHR and certain of its officers and directors in New York Supreme Court, Kings County.
Defendant removed the action to this Court on May 19, 2014. Plaintiff filed an Amended
Complaint on June 27, 2014. Defendant moved to dismiss the complaint, and Judge Irizarry
granted Defendant’s motion to dismiss but granted Plaintiff leave to amend her complaint to add
further detail to her claim for breach of contract in an Order dated March 9, 2015.
Plaintiff filed a Second Amended Complaint on April 6, 2015, and Defendant again filed a
motion to dismiss. On September 30, 2016, Judge Irizarry issued a Memorandum Opinion
granting in part and denying in part Defendant’s Motion to Dismiss Plaintiff’s Second Amended
Complaint.
In January 2017, the Parties engaged in a private mediation with Hon. Theodore H. Katz, U.S.
Magistrate Judge (Ret.) and reached an agreement in principle to settle the Class Action on the
terms that have now been preliminarily approved by the Court.

1

See Apple REIT Seven, Inc., Registration Statement (Form S-3), at 9 (July 17, 2007); Apple REIT Eight, Inc.,
Registration Statement (Form S-3), at 8 (Apr. 23, 2008).

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III.

SUMMARY OF SETTLEMENT TERMS AND FREQUENTLY ASKED
QUESTIONS (FAQS)

Defendant will pay $5,500,000.00 in cash to resolve the claims of Plaintiff and the Class. The
Class (and each member of the Class) is limited solely to the Settlement Fund for the satisfaction
of all Released Claims against all Released Parties (which include Defendant and its
predecessors Apple REIT Seven, Inc. and Apple REIT Eight, Inc. and affiliates, including but
not limited to Apple Seven Advisors, Inc., Apple Eight Advisors, Inc., and Apple Fund
Management, LLC, and the Apple REITs’ present and former directors, partners, principals,
officers, employees, agents, trustees, attorneys, insurers, reinsurers, parents, subsidiaries,
affiliates, divisions, representatives, predecessors, administrators, and assigns).
Under the proposed Plan of Allocation, the proposed Settlement Administrator will calculate
each Class Member's “Allowed Payment Amount” (share of the Net Settlement Fund) in the
following matter:
85% of the Net Settlement Fund will be allocated to DRIP shares purchased between July 22,
2011 and January 13, 2012 for Apple REIT Seven and between July 22, 2011 and February 19,
2013 for Apple REIT Eight less any shares redeemed.
15% of the Net Settlement Fund will be allocated to DRIP shares purchased between July 17,
2007 and July 21, 2011 as well as January 14, 2012 to June 27, 2013 for Apple REIT Seven and
April 23, 2008 to July 21, 2011 as well as February 20, 2013 to June 27, 2013 for Apple REIT
Eight less any shares redeemed.
The Plan is not a part of or a condition of approval of the Settlement. Under the Agreement, the
Net Settlement Fund may be distributed in accordance with the proposed Plan or such other plan
as the Court may approve.
Why Did I Get This Notice?
This Notice is being sent to you pursuant to an Order of the District Court because you, someone
in your family, or an investment account for which you serve as a custodian may have acquired
shares of the Apple REITs pursuant to the Apple REITs’ DRIPs between July 17, 2007 and June
27, 2013. The District Court has directed us to send you this Notice because, as a potential Class
Member, you have a right to know about your options before the District Court rules on the
proposed Settlement. Additionally, you have the right to understand how a class action lawsuit
may generally affect your legal rights. If the District Court approves the Settlement and the Plan
of Allocation (or some other plan of allocation), the Settlement Administrator selected by the
Parties and approved by the Court will make payments pursuant to the Settlement and the courtapproved Plan of Allocation after any objections and appeals are resolved. This Notice is also
being sent to inform you of a hearing to be held by the District Court to consider the fairness,
reasonableness, and adequacy of the Settlement, the proposed Plan of Allocation, and the Fee and
Expense Application.
In a class action lawsuit, the court selects one or more people, known as class representatives, to
sue on behalf of all people with similar claims, commonly known as the class or the class members.

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A class action lawsuit is a type of lawsuit in which the claims of a number of individuals are
resolved together, thus providing the class members with both consistency and efficiency. Once
the class is certified, the court must resolve all issues on behalf of the class members, except for
any Persons who choose to exclude themselves from the class. In this case, the District Court has
appointed Susan Moses to serve as Class Representative, and has appointed the law firms of Salas
Wang LLC, Eccleston Law, LLC, and Law Office of Christopher J. Gray, P.C. to serve as Interim
Class Counsel. The District Court has also preliminarily certified this case to proceed as a class
action, for settlement purposes only.
This Notice does not express any opinion by the District Court concerning the merits of any claim
in the Class Action. The District Court must decide whether to approve the Settlement. If the
Court approves the Settlement and the Plan of Allocation, payments to Class Members will be
made after any appeals are resolved.
What Does The Settlement Provide?
Defendant shall cause to be delivered to Class Counsel, a check or wire transfer in the amount of
$5,500,000.00, which will earn interest for the benefit of the Class (the “Settlement Fund”), and
all Class Members who do not validly exclude themselves from the Class. The claims of all Class
Members who do not timely exclude themselves will be released.
Am I Included In The Settlement?
You are included in the Class if you, or an investment account for which you serve as a custodian,
acquired shares of the Apple REITs, specifically Apple REIT Seven, Inc. and Apple REIT Eight,
Inc., pursuant to the Apple REITs’ DRIPs between July 17, 2007 and June 27, 2013, inclusive.
PLEASE NOTE: RECEIPT OF THIS NOTICE DOES NOT MEAN THAT YOU ARE A
CLASS MEMBER OR THAT YOU WILL BE ENTITLED TO RECEIVE PROCEEDS
FROM THE SETTLEMENT FUND. IF YOU ARE A CLASS MEMBER, YOU WILL
RECEIVE A VERIFICATION FORM SUBSEQUENT TO THIS NOTICE IF THE COURT
APPROVES THE SETTLEMENT. TO BE ELIGIBLE TO PARTICIPATE IN THE
DISTRIBUTION OF PROCEEDS FROM THE SETTLEMENT, YOU NEED NOT
RESPOND TO THIS NOTICE OR TO THE VERIFICATION FORM. IF YOU DO NOT
RESPOND TO OR DISPUTE THE VERIFICATION FORM, YOU WILL BE DEEMED
TO HAVE CONSENTED TO THE TERMS OF THE SETTLEMENT. IF YOU DISPUTE
THE ACCOUNT INFORMATION INCLUDED WITH THE VERIFICATION FORM,
YOU MAY RESPOND TO THE SETTLEMENT ADMINISTRATOR PURSUANT TO
INSTRUCTIONS THAT WILL BE INCLUDED IN THE VERIFICATION FORM.
What Might Happen If There Were No Settlement?
If there were no Settlement, the litigation would proceed to judgment. If Plaintiff failed to establish
any essential legal or factual element of her claims against the Defendant, neither she nor the Class
would recover anything from the Defendant. Also, if the Defendant were successful in proving

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any of its defenses, the Class could recover substantially less than the amounts provided in the
Settlement, or nothing at all.
What Is The Legal Effect Of The Settlement On My Rights?
If you are a member of the Class, the Settlement will affect you. If the District Court grants final
approval of the Settlement, the Class Action will be dismissed with prejudice and all Class
Members will fully release and discharge the Defendant (and the other Released Parties) from all
claims for relief arising out of or based on Plaintiff’s allegations. When a Party to the litigation
“releases” claims, that means that Party cannot sue the Defendant or the other Released Parties for
any of the claims covered by the release. If you are a Class Member and you agree to a Verification
Form (by not disputing the amounts on that Form), you will receive a payment based upon the
distribution formula described below or as otherwise approved by the Court.
What If I Purchased Shares After The Class Period?
The Class Period covered by the Settlement runs from July 17, 2007 until June 27, 2013
inclusive, and the claims of all Settlement Class members concerning purchases of Apple REIT 7
and/or Apple REIT 8 shares during that period will be released under the terms of the Settlement
unless Settlement Class members affirmatively exclude themselves and opt out of the Settlement
Class. The period June 28, 2013 through February 12, 2014, which was formerly defined as part
of the class period in Plaintiff’s Second Amended Complaint, is not part of the Class Period
covered by the Settlement. You will not receive any compensation for purchases of Apple REIT
7 and/or Apple REIT 8 shares between June 28, 2013 and February 12, 2014 in connection with
the Settlement, and if you wish to pursue claims concerning purchases during this period you
would need to commence a separate legal action within the applicable statute of limitations.
What Will I Receive From The Settlement?
At this time, it is not possible to determine precisely how much each Class Member may receive
from the Settlement. However, using a conservative estimate assuming that every Class Member
participates, and assuming that a request for attorneys’ fees for the maximum potential sum
permitted under the Settlement Agreement ($1.833 million) is granted, and that an application for
reimbursement of expenses in the amount of $150,000 is granted, then Class Members would
receive at least $1.26 per share for DRIP shares purchased between July 22, 2011 and January 13,
2012 for Apple REIT Seven and between July 22, 2011 and February 19, 2013 for Apple REIT
Eight. Class members would receive at least $0.02 per share for DRIP shares purchased between
July 17, 2007 and July 21, 2011 as well as January 14, 2012 to June 27, 2013 for Apple REIT
Seven and April 23, 2008 to July 21, 2011 as well as February 20, 2013 to June 27, 2013 for Apple
REIT Eight.
Pursuant to the Settlement, Defendant shall cause to be delivered to Lead Counsel a check or wire
transfer in the amount of $5,500,000.00, which will be deposited into an interest-bearing escrow
account. If the Settlement is approved by the District Court, the Net Settlement Fund (i.e., the
Settlement Fund less: (a) all federal, state, and local taxes on any income earned by the Settlement
Fund and the reasonable costs incurred in connection with determining the amount of and paying

6

taxes owed by the Settlement Fund (including reasonable expenses of tax attorneys and
accountants); (b) the costs and expenses incurred in connection with providing Notice to Class
Members and administering the Settlement on behalf of Class Members; and (c) any attorneys’
fees and expenses awarded by the District Court) will be distributed to Class Members as set forth
in the proposed Plan of Allocation, or such other plan as the District Court may approve.
After approval of the Settlement by the District Court and upon satisfaction of the other conditions
to the Settlement, the Net Settlement Fund will be distributed to Authorized Class Members in
accordance with the Plan of Allocation approved by the District Court. Under the proposed Plan
of Allocation, 85% of the Net Settlement Fund will be allocated to DRIP shares purchased between
July 22, 2011 and January 13, 2012 for Apple REIT Seven and between July 22, 2011 and February
19, 2013 for Apple REIT Eight less any shares redeemed. 15% of the Net Settlement Fund will be
allocated to DRIP shares purchased between July 17, 2007 and July 21, 2011 as well as January
14, 2012 to June 27, 2013 for Apple REIT Seven and April 23, 2008 to July 21, 2011 as well as
February 20, 2013 to June 27, 2013 for Apple REIT Eight less any shares redeemed.
The Net Settlement Fund will not be distributed until the District Court has approved a plan of
allocation, and the time for any petition for rehearing, appeal, or review, whether by certiorari or
otherwise, concerning the terms of the Settlement and the District Court’s approval thereof, has
expired.
Approval of the Settlement is independent from approval of the Plan of Allocation. Any
determination with respect to the Plan of Allocation will not affect the Settlement, if approved.
After this notice, but prior to payment, you will receive a communication that includes a Verification
Form from the Settlement Administrator with your distribution amount and the basis for that
calculation. Unless you dispute that amount with the Settlement Administrator within the time stated
in the letter, you will receive payment based on that calculation.
Unless the District Court otherwise orders, any Class Member who agrees to a valid Verification
Form by not disputing the amount on the form prior to the date stated in the Verification Form,
shall be fully and forever barred from receiving additional payments pursuant to the Settlement,
but will in all other respects remain a Class Member and be subject to the provisions of the
Settlement Agreement that is approved, including the terms of any judgment entered and releases
given.
The District Court has reserved jurisdiction to allow, disallow, or adjust the claim of any Class
Member on equitable grounds.
Each Class Member shall be deemed to have submitted to the jurisdiction of the District Court
with respect to his, her, or its Verification Form. Upon request of the Settlement Administrator,
each Person that agrees to a Verification Form shall subject his, her, or its Claim to investigation
as to his, her, or its status as a Claimant and the allowable amount of his, her, or its Claim. Disputes
will be handled by the Settlement Administrator upon proof submitted supporting that dispute.

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Persons that are excluded from the Class by definition or that exclude themselves from the Class
will not be eligible to receive a distribution from the Net Settlement Fund.
Proposed Plan of Allocation
85% of the Net Settlement Fund will be allocated to DRIP shares purchased between July 22,
2011 and January 13, 2012 for Apple REIT Seven and between July 22, 2011 and February 19,
2013 for Apple REIT Eight less any shares redeemed.
15% of the Net Settlement Fund will be allocated to DRIP shares purchased between July 17,
2007 and July 21, 2011 as well as January 14, 2012 to June 27, 2013 for Apple REIT Seven and
April 23, 2008 to July 21, 2011 as well as February 20, 2013 to June 27, 2013 for Apple REIT
Eight less any shares redeemed.
Payment pursuant to the Plan of Allocation, or such other plan as may be approved by the District
Court, shall be deemed conclusive against all Authorized Class Members. No Person shall have
any claim against Plaintiff, Interim Class Counsel, Defendant, or any of the other Released Parties,
or the Settlement Administrator arising from distributions made substantially in accordance with
the Settlement Agreement, the Plan of Allocation approved by the District Court, or further orders
of the District Court. Except as otherwise provided in the Settlement Agreement, Plaintiff,
Defendant, and their respective counsel, and all other Released Parties shall have no responsibility
or liability whatsoever for the investment or distribution of the Settlement Funds, the Net
Settlement Fund, the Plan of Allocation, or the determination, administration, calculation, or
payment of any Verification Form or nonperformance of the Settlement Administrator, the
payment or withholding of taxes owed by the Settlement Fund, or any losses incurred in connection
therewith.
The Plan of Allocation set forth herein is the plan that is being proposed by Plaintiff to the District
Court for approval. The District Court may approve this Plan of Allocation as proposed or it may
modify the Plan of Allocation without further notice to the Class. Any orders regarding a
modification of the Plan of Allocation will be posted on the Settlement website,
www.AppleReitSettlement.com.
What If I Do Not Wish To Be Included In This Settlement?
If you do not wish to be included in the Class and you do not wish to participate in the Settlement,
you may request to be excluded. To do so, you must timely submit a valid Request for Exclusion
that must (a) be properly completed and postmarked on or before December 29, 2017, and (b) be
signed by you or your authorized representative. The Court may request further documentation
evidencing your holdings of Apple REITs shares if deemed necessary. The Request for Exclusion
should be mailed to the address set forth in this Notice.
If you timely and validly request exclusion from the Class, (a) you will be excluded from the Class,
(b) you will not share in the proceeds of the Settlement described herein, (c) you will not be bound
by any judgment entered in the Action, and (d) you will not be precluded, by reason of your decision

8

to request exclusion from the Class, from otherwise prosecuting an individual claim, if timely,
against the Defendants (or the Released Parties) based on the matters complained of in the Action.
What If A Settlement Class Member Is Deceased?
The authorized legal representative(s) of a Class Member may receive a recovery on behalf of the
Class Member.
What If I Held Apple REITs Shares On Someone Else’s Behalf?
If you held Apple REITs shares for the beneficial interest of a Class Member, you are requested
to provide the names and addresses of such persons or entities to the Settlement Administrator. If
you notify the Settlement Administrator of this information, the Settlement Administrator will
send a copy of the Notice to the beneficial owners. Upon full compliance with this request, such
nominees may seek reimbursement of their reasonable expenses actually incurred, by providing
the Settlement Administrator with proper documentation supporting the out-of-pocket expenses
for which reimbursement is sought.
How And What Do I Do To Make Sure The Settlement Administrator Has My Correct
Address?
If your address changes from the address to which this Notice was directed, you must notify the
Settlement Administrator of your new address as soon as possible. Failure to keep the Settlement
Administrator informed of your address may result in the loss of any monetary award you might
be eligible to receive. Please send your new contact information to the Settlement Administrator
at the address listed below and include your old address, new address, new telephone number, date
of birth (for natural persons), and appropriate tax identification number. These last two items are
required so that the Settlement Administrator can verify that the address change is from an actual
Class Member.
What Are The Plaintiffs’ and Counsels’ Fees And Costs?
At the Settlement Hearing, Lead Counsel will request that the District Court award attorneys’ fees
not to exceed one-third of the Settlement Fund, or $1.833 million, plus expenses in the amount of
approximately $150,000 (inclusive of administration costs) which were incurred in connection
with the litigation of the Class Action. Whatever amount is approved by the Court as legal fees
and expenses will be paid from the Settlement Fund. To date, Lead Counsel has not received any
payment for their services in conducting the Class Action, nor have Lead Counsel been reimbursed
for their expenses. Lead Counsel will also request incentive awards to the class representative in
recognition of her time, effort, and expense on behalf of the Class, in a sum not to exceed a total
of $10,000 inclusive of administration costs.
How Will the Notice Costs and Expenses Be Paid?
Lead Counsel are authorized by the Settlement Agreement, as approved by the District Court, to
use the Settlement Fund to pay the Settlement Administrator’s fees and expenses incurred in

9

connection with giving notice, administering the Settlement, and distributing the Net Settlement
Fund to Class Members.
IV.

REASONS FOR THE SETTLEMENT

Plaintiff’s counsel have conducted a thorough investigation of the claims and allegations asserted
in the Class Action, as well as the underlying events relevant to the Class Action.
In evaluating the Settlement, Plaintiff and her counsel have considered: (a) the substantial
benefits to the members of the Class from the Settlement; (b) the facts developed during
Plaintiff’s investigation and discovery; (c) the attendant risks of continued litigation and the
uncertainty of the outcome of the Class Action; (d) the probability of success on the merits; and
(e) the conclusion of Plaintiff’s counsel that the terms and conditions of the Settlement are fair,
reasonable, adequate and in the best interests of Plaintiff and the Class.
Defendant has denied, and continues to deny, that it or the Apple REITs (or their officers and
directors) committed any breach of any contract, fiduciary duty, securities law or any other law,
or engaged in any of the wrongful acts alleged in the Class Action, and expressly maintains that
the Class Action is without merit and that Defendant is entering into the Settlement solely to
eliminate the burden, expense, distraction and uncertainties inherent in further litigation.
Plaintiff has stated, and continues to state, that she brought her claims in good faith, that she
believes that the claims had substantial merit at all relevant times, and that she is agreeing to the
terms of the Settlement only because she believes that the Settlement provides a substantial
benefit to the Class and has concluded that the terms of the Settlement are fair, reasonable and
adequate and in the best interests of the Class.
The $5,500,000.00 in consideration payable by Defendant under the Settlement provides a
substantial and immediate benefit to the Class. Although Lead Counsel believes that Plaintiff
would be able to prove merit to the claims asserted in the case, there is a substantial risk that
Class Members would not recover anything at all if the case were not settled. If the case were to
continue to be litigated, the Class would still need to establish the legal requirements for class
certification under Fed. R. Civ. P. 23 by a preponderance of the evidence, and would also need to
overcome various legal defenses in order to survive any dispositive summary judgment motions
or recover at trial.

10

V.

SUMMARY OF CLASS MEMBERS’ LEGAL RIGHTS AND OPTIONS

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT:
The Settlement Administrator will send a Verification Form
with the basis for your payment calculation. You may
dispute this amount by submitting documentation to the
Settlement Administrator. The Settlement Administrator
DO NOTHING OR DISPUTE will determine the validity of that dispute and adjust
THE VERIFICATION FORM payment if the dispute is valid.
If you do not dispute the payment amount prior to the date
noted in the Verification Form, you will receive the payment
amount shown on the Verification Form.
EXCLUDE
YOURSELF
FROM THE CLASS BY
SUBMITTING A REQUEST
FOR EXCLUSION FORM
POSTMARKED NO LATER
THAN DECEMBER 29, 2017

If you exclude yourself from the Class, you will not be
eligible to get any payment from the Net Settlement Fund.
This is the only option that allows you to be part of any other
lawsuit against the Defendant or the other Released Parties
concerning the Released Claims.

OBJECT
TO
THE
SETTLEMENT
BY
SUBMITTING A WRITTEN
OBJECTION NO LATER
THAN DECEMBER 29, 2017

If you do not like the proposed Settlement, the proposed
Plan of Allocation, or the Fee and Expense Application, you
may write to the District Court and explain why you do not
like them. You cannot object to the Settlement, the Plan of
Allocation, or the Fee and Expense Application unless you
are a Class Member and do not exclude yourself.

GO TO THE SETTLEMENT
HEARING ON JANUARY 16,
2018 AT 4:30 P.M. AND FILE
A NOTICE OF INTENTION
TO APPEAR NO LATER
THAN DECEMBER 29, 2017

Filing a written objection and notice of intention to appear
allows you to speak in the District Court about the fairness
of the Settlement, the Plan of Allocation, and/or the Fee and
Expense Application. If you submit a written objection, you
may (but do not have to) attend the hearing and speak to the
District Court about your objection.

VI.

YOUR RIGHT TO OPT OUT OF THE CLASS ACTION AND FILE YOUR OWN
LAWSUIT

How Can I Exclude Myself from the Settlement?
If you do not want to be legally bound by the settlement, you must exclude yourself by
December 29, 2017. To do so, you must mail your written request for exclusion to the
Settlement Administrator at the address below. Your written request for exclusion must include

11

your full name, address, telephone number, the last four digits of your Social Security Number, a
statement that you wish to be excluded from the settlement, and it must be personally signed by
you. If you exclude yourself, you will not receive money from this settlement, but you will retain
your legal rights regarding any claims that you may have against the Released Parties regarding
the claims asserted in this case.
How Can I Object To The Settlement, Plan of Allocation, and Fee and Expense
Application?
Any Class Member who does not request exclusion may object to the Settlement, the proposed
Plan of Allocation, and/or the Fee and Expense Application. Objections must be in writing. You
must file any written objection, together with copies of all other papers and briefs supporting the
objection, with the Clerk’s Office at the United States District Court for the Eastern District of
New York at the address set forth below on or before December 29, 2017. Your written objection
should include all reasons for the objection, including any legal and evidentiary support you wish
to bring to the Court’s attention. The objection must also include your name, address, telephone
number, the number and class of Apple REITs shares you held, and the number and class of Apple
REITs shares that you purchased in the DRIPs. You must also serve the papers on designated
representative Lead Counsel and Defendant’s counsel at the addresses set forth below.
To be considered, your objection must be filed with the Office of the Clerk’s Office no later than
December 29, 2017, and sent to:
Clerk’s Office

Defendants’ Counsel

Clerk of the Court

MCGUIREWOODS, LLP SALAS WANG LLC
Elizabeth F. Edwards, Esq. Jeffrey M. Salas, Esq.
Gateway Plaza
73 West Monroe, Suite 219
Chicago, IL 60603
800 East Canal Street
Richmond, VA 23219
ECCLESTON LAW, LLC,
James J. Eccleston, Esq.,
55 W. Monroe, Suite 610
Chicago, IL 60603

United States Court Eastern
District of New York 225
Cadman Plaza East Brooklyn,
New York 11201

Re: Moses v. Apple Hospitality
REIT, Inc.,14-cv-03131 (DLI)
(SMG)

Lead Counsel

LAW OFFICE OF
CHRISTOPHER J. GRAY, P.C.
Christopher J. Gray, Esq.
360 Lexington Ave., 14th Fl.
New York, NY 10017

You may file a written objection without having to appear at the Settlement Hearing. You may
not, however, appear at the Settlement Hearing to present your objection unless you first filed and
served a written objection in accordance with the procedures described above, unless the District
Court orders otherwise.

12

If you file an objection to the Settlement, Plan of Allocation, and/or the Fee and Expense
Application you also have a right to appear at the Settlement Hearing either in person or through
counsel hired by you at your own expense. You are not required, however, to hire an attorney to
represent you in making written objections or in appearing at the Settlement Hearing. If you wish
to be heard orally at the hearing in opposition to the approval of the Settlement, the Plan of
Allocation, or the Fee and Expense Application, and if you file and serve a timely written objection
as described above, you must also file a notice of appearance with the Clerk’s Office and serve it
on the Settlement Administrator at the address set forth above. Persons who intend to object and
desire to present evidence at the Settlement Hearing must include in their written objection or
notice of appearance, the identity of any witnesses they may call to testify and exhibits they intend
to introduce into evidence at the hearing.
Unless the District Court orders otherwise, any Class Member who does not object in the
manner described above will be deemed to have waived any objection and shall be forever
foreclosed from making any objection to the proposed Settlement, the proposed Plan of
Allocation and the Fee and Expense Application. Class Members do not need to appear at
the Settlement Hearing or take any other action to indicate their approval.
What Rights Am I Giving Up By Remaining In The Class?
If you remain in the Class, you will be bound by any orders issued by the District Court. For
example, if the District Court approves the Settlement, the District Court will enter the Final Order
and Judgment. The Final Order and Judgment will dismiss with prejudice the claims against the
Defendant, and will provide that, upon the Effective Date of the Settlement, Plaintiff and each of
the other members of the Class on behalf of themselves, their respective heirs, executors,
administrators, predecessors, successors, and assigns, among others, shall be deemed by operation
of law to have fully granted and completely discharged, dismissed with prejudice, settled and
released, and agreed to be barred by a permanent injunction from the assertion of, Released Claims
against any of the Released Parties and their attorneys.
“Released Claims” shall mean any and all manner of claims, demands, actions, suits, causes of
action, damages whenever incurred, liabilities of any nature and kind whatsoever, including
without limitation costs, expenses, penalties and attorneys’ fees, known or unknown, suspected or
unsuspected, in law or equity, that each and every Class Member (including any of their past,
present or future parents, subsidiaries, divisions, affiliates, stockholders, and each and any of their
respective stockholders, officers, directors, insurers, general or limited partners, agents, attorneys,
employees, legal representatives, trustees, associates, heirs, executors, administrators, purchasers,
predecessors, successors and assigns, acting in their capacity as such) may have, ever had, now
has, or hereafter can, shall or may have, directly, representatively, derivatively or in any other
capacity, against the Released Parties arising out of any conduct or claims alleged in any Complaint
in this Action, including, without limitation, claims which have been asserted or could have been
asserted in this litigation arising under any federal or state securities law or regulation, or common
law, including, without limitation, any breach of contract, breach of good faith, breach of fiduciary
duty, or any other tort.

13

“Released Parties” shall mean the Defendant and its predecessors Apple REIT Seven, Inc. and
Apple REIT Eight, Inc. (the “Apple REITs”) and affiliates, including but not limited to Apple
Seven Advisors, Inc., Apple Eight Advisors, Inc., and Apple Fund Management, LLC, , and the
Apple REITs’ present and former directors, partners, principals, officers, employees, agents,
trustees, attorneys, insurers, reinsurers, parents, subsidiaries, affiliates, divisions, representatives,
predecessors, administrators, and assigns.
“Unknown Claims” means any claim that any Class Member does not know or suspect exists in
his, her, or its favor at the time of the Release as against the Released Parties, including without
limitation those which, if known, might have affected the decision to enter into the Settlement.
Upon the Effective Date of the Settlement Agreement, each Class Member shall be deemed to
have, and by operation of the final order and judgment by the Court shall have, expressly waived,
relinquished, and released any and all provisions, rights, and benefits conferred by or under
California Civil Code § 1542 or any law of the United States or any state of the United States or
territory of the United States, or any principle of common law or foreign law, which is similar,
comparable or equivalent to § 1542, which provides:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
VII.

CLASS ACTION DETERMINATION

The Court has ordered that the Class Action shall be preliminarily certified as a class action for
purposes of the Settlement only, pursuant to Rule 23 of the Federal Rules of Civil Procedure. At
the Settlement Hearing, the Court will consider, among other things, whether the Class should be
certified permanently.
VIII. THE SETTLEMENT HEARING
The Court has scheduled the Settlement Hearing to be held January 16, 2018 at the time
identified in Section I above to determine: (a) whether the Court should finally approve the
Settlement as fair, reasonable and adequate to the Class; (b) whether to enter judgment
dismissing the Class Action with prejudice and extinguishing and releasing the Released Claims;
(c) whether the Class should be permanently certified pursuant to Rule 23 or the Federal Rules of
Civil Procedure; (d) whether the Court should finally certify Plaintiff as the Class Representative
in the Class Action and Interim Class Counsel as Class Counsel in the Class Action; (e) if the
Court approves the Settlement, whether the Court should grant Plaintiff’s application for
payment of attorneys’ fees and reimbursement of expenses; and (f) to consider such other matters
as may properly come before the Court.
The Court may postpone, reschedule or adjourn the Settlement Hearing without further notice to
the Class other than by filing a notice on the docket in the Class Action in advance of the
Settlement Hearing, or by making an announcement at the Settlement Hearing or any
adjournment thereof. The Court also has reserved the right to approve the Settlement at or after

14

the Settlement Hearing with such modification(s) as may be consented to by the Parties and
without further notice to the Class.
IX.

YOUR RIGHT TO APPEAR AND OBJECT

Any member of the Class who objects to any aspect of the Settlement, certification of the Class,
entry of the Final Order and Judgment, and/or Plaintiff’s counsel’s application for payment of
attorneys’ fees and expenses, or who otherwise wishes to be heard, may appear in person by his,
her or its attorney at the Settlement Hearing and present evidence or argument that may be
proper and relevant; provided, however, that, except for good cause shown, no person shall be
heard or entitled to contest the approval of the terms and conditions of the Settlement, or, if
approved, the judgment to be entered thereon, and no papers or briefs submitted by any member
of the Class or any other person shall be received and considered by the Court, unless, not later
than December 29, 2017, such person files with the Court and serves upon all of the counsel
listed below, at the addresses listed below, a written objection. The objection must include all
reasons for the objection, including any legal and evidentiary support you wish to bring to the
Court’s attention. The objection must also include the Class member’s name, address, telephone
number, the number and class of Apple REITs shares that the Class member held, the number
and class of Apple REITs shares that the Class member purchased in the DRIPs, and the dates of
purchase of the DRIP shares. See also Section VI supra.
X.

FINAL ORDER AND JUDGMENT OF THE COURT

If following the Settlement Hearing the Settlement is approved by the Court as fair, reasonable
and adequate, the Parties will jointly request that the Court enter a Final Order and Judgment
which will, among other things: (a) certify the Class Action as a class action pursuant to Rule 23
of the Federal Rules of Civil Procedure on behalf of the Class; (b) determine that the
requirements of the Federal Rules of Civil Procedure and due process have been satisfied in
connection with the Notice provided to the Class; (c) certify Plaintiff Susan Moses, as Class
Representative and Interim Class Counsel as Class Counsel in the Class Action; (d) approve the
Settlement as fair, reasonable and adequate to the Class; (e) dismiss the Class Action with
prejudice on the merits, as against Defendant, without costs except as herein provided, and
release Defendant and any other of the Released Parties from the Released Claims; and (f)
determine any payment of attorneys’ fees and expenses incurred by Plaintiff.
XI.

THE APPLICATION FOR ATTORNEYS’ FEES AND EXPENSES

At the Settlement Hearing, Lead Counsel will request that the District Court award attorneys’ fees
not to exceed one-third of the Settlement Fund (or $1.833 million) plus expenses in the amount of
approximately $150,000 (inclusive of administration costs) which were incurred in connection
with the litigation of the Class Action. Whatever amount is approved by the Court as legal fees
and expenses will be paid from the Settlement Fund. To date, Interim Class Counsel has not
received any payment for their services in conducting the Class Action, nor have they been
reimbursed for their expenses. Plaintiff will also request an incentive award to the class
representative in recognition of her time, effort, and expense on behalf of the Class, in a sum not
to exceed a total of $10,000.

15

XII.

SCOPE OF THIS NOTICE

This Notice is not all-inclusive. The references in this Notice to the pleadings in the Class
Action, the Stipulation of Settlement and all other papers or proceedings herein are only
summaries and do not purport to be comprehensive. For the full details of the Class Action, the
claims that have been asserted in the Class Action and the terms and conditions of the
Settlement, including a complete copy of the Stipulation of Settlement and related Orders and
proposed forms of Orders, you are referred to the Court file for the Class Action (accessible at
www.AppleReitSettlement.com).
***
This Notice is a summary and does not describe all of the details of the Settlement. For precise
terms and conditions of the Settlement, you may review the Stipulation of Settlement filed with
the District Court, as well as the other pleadings and records of this litigation, which may be
inspected during business hours, at the office of the Clerk of the Court, Eastern District of New
York, 225 Cadman Plaza East, Room 130, Brooklyn, New York 11201. You may also access all
of the significant documents filed with the District Court at www.AppleReitSettlement.com.
If you have any questions about the settlement of the Class Action, you may contact Interim Class
Counsel at the addresses and telephone numbers below.
DO NOT TELEPHONE OR WRITE THE DISTRICT COURT OR THE OFFICE OF
THE CLERK OF THE COURT REGARDING THIS NOTICE
BY ORDER OF THE U.S. DISTRICT COURT,
EASTERN DISTRICT OF NEW YORK
SALAS WANG LLC
Jeffrey M. Salas
John C. Wang
73 West Monroe, Suite 219
Chicago, IL 60603
[phone]
[phone] (fax)
ECCLESTON LAW, LLC
James J. Eccleston
Stephany D. McLaughlin
55 W. Monroe, Suite 610
Chicago, IL 60603
[phone]
[phone] (fax)

16

LAW OFFICE OF CHRISTOPHER J. GRAY, P.C.
Christopher J. Gray
360 Lexington Avenue, 14th Floor
New York, New York 10017
[phone]
[phone] (fax)

PLEASE DO NOT CALL OR WRITE THE COURT WITH GENERAL INQUIRIES.

17

APPENDIX ''B''

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK

SUSAN MOSES, on behalf of herself and all
others similarly situated,

Case No.1:14-cv-03131 (SMG)

Plaintiff,
v.
APPLE HOSPITALITY REIT, INC.,
Defendant.

SUMMARY NOTICE OF (I) PENDENCY OF CLASS ACTION, CERTIFICATION OF
SETTLEMENT CLASS, AND PROPOSED SETTLEMENT; (II) SETTLEMENT
HEARING; AND (III) MOTION FOR AN AWARD OF ATTORNEYS' FEES AND
REIMBURSEMENT OF LITIGATION EXPENSES
To:

ALL PERSONS IN THE UNITED STATES WHO ACQUIRED SHARES OF
APPLE REIT SEVEN AND/OR APPLE REIT EIGHT PURSUANT TO THE
APPLE REITS’ DISTRIBUTION REINVESTMENT PLANS (DRIPs) BETWEEN
JULY 17, 2007 AND JUNE 27, 2013 INCLUSIVE.

PLEASE READ THIS NOTICE CAREFULLY. YOUR RIGHTS WILL BE AFFECTED
BY A CLASS ACTION LAWSUIT PENDING IN THIS COURT.
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23 of the Federal Rules of Civil Procedure
and an Order of the United States District Court for the Eastern District of New York, that the
above-captioned litigation (the "Action") has been certified as a class action on behalf of the
Settlement Class, except for certain persons and entities who are excluded from the Settlement
Class by definition as set forth in the full printed Notice of (I) Pendency of Class Action,
Certification of Settlement Class, and Proposed Settlement; (II) Settlement Hearing; and
(III) Motion for an Award of Attorneys' Fees and Reimbursement of Litigation Expenses (the
"Notice").
YOU ARE ALSO NOTIFIED that the Plaintiff in the Action, on behalf of herself and the other
members of the Settlement Class, have reached a proposed settlement of the Action
for $5,500,000 in cash (the "Settlement"). If the Settlement is approved by the Court, it will
resolve all claims in the Action.

1

A hearing will be held on January 16, 2018 at 4:30 p.m., before the Honorable Steven M. Gold,
United States Magistrate Judge, at the United States District Court for the Eastern District of
New York, 225 Cadman Plaza East, Brooklyn, New York 11201, Courtroom 13-D, to determine:
(i) whether the proposed Settlement should be approved as fair, reasonable, and adequate; (ii)
whether the Action should be dismissed with prejudice against Defendants, and the Releases
specified and described in the Stipulation and Agreement of Settlement dated August 25,
2017 (and in the Notice) should be granted; (iii) whether the proposed Plan of Allocation should
be approved as fair and reasonable; and (iv) whether Lead Counsel's application for an award of
attorneys' fees and reimbursement of litigation expenses should be approved.
The Class Period covered by the Settlement runs from July 17, 2007 until June 27, 2013
inclusive, and the claims of all Settlement Class members concerning purchases of Apple REIT 7
and/or Apple REIT 8 shares during that period will be released under the terms of the Settlement
unless Settlement Class members affirmatively exclude themselves and opt out of the Settlement
Class. The period June 28, 2013 through February 12, 2014, which was formerly defined as part
of the class period in Plaintiff’s Second Amended Complaint, is not part of the Class Period
covered by the Settlement. You will not receive any compensation for purchases of Apple
REIT 7 and/or Apple REIT 8 shares between June 28, 2013 and February 12, 2014 in
connection with the Settlement, and if you wish to pursue claims concerning purchases during
this period you would need to commence a separate legal action within the applicable statute of
limitations.
If you are a member of the Settlement Class, your rights will be affected by the pending
Action and the Settlement, and you may be entitled to share in the Settlement Fund. If you
have not yet received the Notice, you may obtain copies of these documents by contacting the
Claims Administrator by writing to: Apple Hospitality REIT Settlement, c/o KCC Class Action
Services, P.O. Box 404033, Louisville, KY 40233-4033, calling [phone], or by e-mail
to [e-mail]. Copies of the Notice and Claim Form can also be downloaded
from the website maintained by the Claims Administrator, www.applereitsettlement.com.
At this time, it is not possible to determine precisely how much each Class Member may receive
from the Settlement. However, using a conservative estimate assuming that every Class Member
participates, and assuming that a request for attorneys’ fees for the maximum potential sum
permitted under the Settlement Agreement ($1.833 million) is granted, and that an application
for reimbursement of expenses in the amount of $150,000 is granted, then Class Members would
receive at least $1.26 per share for DRIP shares purchased between July 22, 2011 and January
13, 2012 for Apple REIT Seven and between July 22, 2011 and February 19, 2013 for Apple
REIT Eight. Class members would receive at least $0.02 per share for DRIP shares purchased
between July 17, 2007 and July 21, 2011 as well as January 14, 2012 to June 27, 2013 for Apple
REIT Seven and April 23, 2008 to July 21, 2011 as well as February 20, 2013 to June 27, 2013
for Apple REIT Eight.
The Settlement Administrator will send a Verification Form with the basis for your payment
calculation. You may dispute this amount by submitting documentation to the Settlement
Administrator. The Settlement Administrator will determine the validity of that dispute and
adjust payment if the dispute is valid.
2

If you do not dispute the payment amount prior to the date noted in the Verification Form, you
will receive the payment amount shown on the Verification Form.
If you are a member of the Settlement Class and wish to exclude yourself from the Settlement
Class, you must submit a request for exclusion such that it is postmarked no later than December
29, 2017, in accordance with the instructions set forth in the Notice. If you properly exclude
yourself from the Settlement Class, you will not be bound by any judgments or orders entered by
the Court in the Action and you will not be eligible to share in the proceeds of the Settlement.
Any objections to the proposed Settlement, the proposed Plan of Allocation, or Lead Counsel's
motion for attorneys' fees and reimbursement of Litigation Expenses, must be filed with the
Court and delivered to Lead Counsel and Defendant’s Counsel, postmarked no later
than December 29, 2017, in accordance with the instructions set forth in the Notice.
Exclusions should be made to:
Apple REIT Settlement
c/o KCC Class Action Services
3301 Kerner Boulevard
San Rafael, CA 94901
[e-mail]
www.applereitsettlement.com
Please do not contact the Court, the Clerk's office, Apple Hospitality REIT Inc., or
Defendant’s counsel regarding this notice. All questions about this notice, the proposed
Settlement, or your eligibility to participate in the Settlement should be directed to the
Claims Administrator or Lead Counsel.
All other inquiries should be made to Lead Counsel:
Jeffrey M. Salas, Esq.
SALAS WANG LLC
73 W. Monroe, Suite 219
Chicago, IL 60603
312.803.4963
By Order of the Court

3