IN RE: COBALT INTERNATIONAL ENERGY, INC. SECURITIES LITIGATION

Filing 244

MEMORANDUM AND ORDER granting 163 MOTION to Certify Class. Status Conference set for 7/12/2017 at 10:00 AM in Courtroom 9F before Judge Nancy F Atlas. It is ORDERED that on or before July 7, 2017, counsel shall file a proposed Docket Control Order to govern the remaining deadlines in this case. (Signed by Judge Nancy F Atlas) Parties notified. (wbostic, 4)

United States District Court
Southern District of Texas

ENTERED
IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS
HOUSTON DIVISION

IN RE COBALT INTERNATIONAL
ENERGY, INC. SECURITIES
LITIGATION

§
§
§

June 15, 2017
David J. Bradley, Clerk

CIVIL ACTION NO. H-14-3428

MEMORANDUM AND ORDER
This securities case is before the Court on Plaintiffs’ Motion for Class
Certification and Appointment of Class Representatives and Class Counsel (“Motion”)
[Doc. # 163], to which Defendants filed an Opposition [Doc. # 205], and Plaintiffs
filed a Reply [Doc. # 239]. Having reviewed the full record and the applicable legal
authorities, the Court grants the Motion.
I.

BACKGROUND
Cobalt is an exploration and production company that was formed in 2005 as

a private company. Cobalt conducted an initial public offering (“IPO”) of its shares
in December 2009.
In 2007, Cobalt entered into an agreement with Sonangol E.P. (“Sonangol”),
the Angolan national oil company, to acquire a 40% interest in oil exploration
Blocks 9, 20, and 21 in offshore Angola. In 2009, the Angolan Parliament issued two
decrees assigning an interest in the Blocks to Nazaki Oil & Gaz (“Nazaki”), Sonangol

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P&P, and Alper Oil, Limitada (“Alper”). In February 2010, Cobalt and these other
companies signed Risk Services Agreements (“RSAs”) with Sonangol.
On January 4, 2011, Cobalt filed a Registration Statement and Prospectus
(“January 2011 Registration Statement”) with the Securities and Exchange
Commission (“SEC”). Based on this 2011 Registration Statement, Cobalt conducted,
inter alia, a stock offering in late February 2012 (“February 2012 Stock Offering”).
Additionally, Cobalt conducted registered public offerings of Cobalt convertible
senior notes (“Cobalt Notes”) in December 2012 and May 2014.
On March 10, 2011, Cobalt learned that the SEC was conducting an informal
inquiry into allegations that there existed a connection between Nazaki and senior
government officials in Angola. The next day, Cobalt contacted the Department of
Justice (“DOJ”) regarding the same allegations. Both the SEC and the DOJ later
began formal investigations into whether Cobalt had violated the Foreign Corrupt
Practices Act of 1977 (“FCPA”). The SEC investigation and the DOJ investigation
regarding FCPA violations have ended with no recommendation for enforcement
action against Cobalt.
Meanwhile, Cobalt drilled two exploration wells in the offshore Angola drilling
region: Lontra on Block 20 and Loengo on Block 9. Cobalt had no rights to gas
discoveries and, instead, had rights only to any oil that was discovered in the Blocks.

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Ultimately, Lontra was found to contain a substantially higher percentage of gas than
originally estimated, and drilling at Loengo failed to discover oil.
On April 15, 2012, the Financial Times published two reports that Nazaki was
owned by Angolan officials, who had admitted their ownership interest to the
Financial Times. On December 1, 2013, Cobalt issued a press release disclosing that
the Lontra well contained primarily gas to which Cobalt had no rights. On August 5,
2014, Bloomberg reported that the SEC had issued a “Wells Notice” recommending
the institution of an enforcement action, and that “social payments” that Cobalt was
required to make to the Angolan government to fund a research center were for a
center that did not exist. On November 4, 2014, Cobalt issued a press release
disclosing that the Loengo well was a “dry hole” with no oil. The price of Cobalt
shares declined after each of these reports.
On March 15, 2017, Plaintiffs filed their Second Amended Complaint.
Plaintiffs assert a claim under Section 10(b) of the Securities Exchange Act of 1934
(“Exchange Act”) and Rule 10b-5; Section 20(a) of the Exchange Act; Section 20A
of the Exchange Act; Section 11 of the Securities Act of 1933 (“Securities Act”);
Section 15 of the Securities Act; and Section 12(a)(2) of the Securities Act. Plaintiffs
have filed a Motion seeking class certification, appointment of class representatives,

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and appointment of class counsel. The Motion has been fully briefed and is now ripe
for decision.
II.

STANDARD FOR CLASS CERTIFICATION
“The class action is ‘an exception to the usual rule that litigation is conducted

by and on behalf of the individual named parties only.’” Comcast Corp. v. Behrend,
__ U.S. __, 133 S. Ct. 1426, 1432 (2013) (quoting Califano v. Yamasaki, 442 U.S.
682, 700-701 (1979)). To pursue a class action, Plaintiffs must demonstrate
compliance with the requirements of Rule 23. See id. (citing Wal-Mart Stores, Inc.
v. Dukes, 564 U.S. 338, 350 (2011)). Plaintiffs must prove that “there are in fact
sufficiently numerous parties, common questions of law or fact, typicality of claims
or defenses, and adequacy of representation.” See id.; FED. R. CIV. P. 23(a); Torres
v. S.G.E. Mgmt., LLC, 838 F.3d 629, 635 (5th Cir. 2016) (en banc).
Plaintiffs, such as those here, seeking class certification pursuant to
Rule 23(b)(3) must also prove that “the questions of law or fact common to class
members predominate over any questions affecting only individual members, and that
a class action is superior to other available methods for fairly and efficiently
adjudicating the controversy.” FED. R. CIV. P. 23(b)(3); Torres, 838 F.3d at 635-36.
“The Plaintiffs have the burden of showing that these requirements are met.” Id. at
636 (citing Wal-Mart, 564 U.S. at 350-51).

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III.

ANALYSIS OF RULE 23(a) FACTORS
Rule 23(a) requires Plaintiffs seeking class certification to prove that “there are

in fact sufficiently numerous parties [numerosity], common questions of law or fact
[commonality], typicality of claims or defenses [typicality], and adequacy of
representation [adequacy].” Comcast Corp., 133 S. Ct. at 1432.
A.

Numerosity

The number of class members must be such that “joinder of all members is
impracticable.” FED. R. CIV. P. 23(a)(1). Plaintiffs have presented evidence that
during the class period, Cobalt had over 350 million shares outstanding held by record
holders ranging in number between 107 and 192. Additionally, there were 599
institutional investors holding Cobalt shares during the class period. Defendants do
not challenge Plaintiffs’ satisfaction of the numerosity requirement.
B.

Commonality

To demonstrate commonality, Plaintiffs must show that all of the class
members’ claims “depend on a common issue of law or fact whose resolution ‘will
resolve an issue that is central to the validity of each one of the [class member’s]
claims in one stroke.’” M.D. ex rel. Stukenberg v. Perry, 675 F.3d 832, 840 (5th Cir.
2012) (quoting Wal-Mart, 564 U.S. at 350). Plaintiffs in this case have identified
several common questions of law and fact, including whether Defendants made false

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and misleading statements concerning Cobalt’s business partners in Angola and the
viability of the Lontra and Loengo wells. Defendants do not challenge Plaintiffs’
satisfaction of the commonality requirement.
C.

Typicality

Plaintiffs can satisfy the typicality requirement by showing that class
representatives’ claims arise from a similar course of conduct and share the same legal
theory. See Stirman v. Exxon Corp., 280 F.3d 554, 562 (5th Cir. 2002). In this case,
Defendants challenge Plaintiffs’ ability to satisfy the typicality requirement only as
to the purchasers of Cobalt Notes and the purchasers of Cobalt stock in the 2014
Goldman Sachs secondary offerings.
Defendants argue that Plaintiff Universal is not typical because they assert
Universal suffered no damages in connection with its ownership of Cobalt Notes.
Defendants do not, however, argue that Plaintiff St. Lucie County Fire District
Firefighters’ Pension Trust Fund (“St. Lucie”) is asserting claims in this lawsuit that
are atypical of those asserted by other purchasers of Cobalt Notes. Therefore,
Plaintiffs have demonstrated that a class representative is asserting claims in
connection with the Cobalt Notes that are typical of members of the proposed class.
Defendants argue also that there is no typical class representative for purposes
of claims relating to the 2014 Goldman Sachs secondary offering because Universal

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did not purchase its shares contemporaneously with Goldman Sachs’s sales. Liability
under Section 20A requires that a plaintiff have purchased shares of stock
“contemporaneously” with the defendant’s sale of shares. See 15 U.S.C. § 78t-1(a).
Defendants argue that, with respect to Goldman Sachs’s sale of Cobalt stock in 2014,
Universal purchased shares six days after Goldman Sacks’s sale of shares on July 25,
2014. “Different courts have found that ‘contemporaneity’ requires the insider and
the investor/plaintiff to have traded anywhere from on the same day, to less than a
week, to within a month, to ‘the entire period while relevant and nonpublic
information remained undisclosed.’” See In re Enron Corp. Sec., Derivative & ERISA
Litig., 258 F. Supp. 2d 576, 599 (S.D. Tex. 2003), and cases cited therein. An
allegation of a six-day gap between Goldman Sachs’s sale and Universal’s purchase
does not render Universal an atypical class representative for the 2014 Goldman Sachs
sales.
D.

Adequacy

The adequacy factor requires that “the representative parties will fairly and
adequately protect the interests of the class.” FED. R. CIV. P. 23(a)(4). The adequacy
requirement “serves to uncover conflicts of interest between named parties and the
class they seek to represent.” In re Deepwater Horizon, 785 F.3d 1003, 1015 (5th Cir.
2015) (citing Amchem Prods., Inc. v. Windsor, 521 U.S. 591, 625 (1997)). Defendants

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challenge Plaintiffs’ ability to satisfy the adequacy requirement only as to the
purchasers of Cobalt Notes. Defendants argue that Universal and St. Lucie are
inadequate class representatives for Cobalt Notes purchasers.
Courts, including a court in this district, “have concluded that stock purchasers
can represent purchasers of debt instruments and vice versa in the same action.” See
In re Enron Corp. Sec. Litig., 206 F.R.D. 427, 445 (S.D. Tex. 2002), and cases cited
therein; see also In re Petrobras Sec. Litig., 312 F.R.D. 354, 360 (S.D.N.Y. 2016).
In this case, Defendants do not challenge the adequacy of Plaintiffs GAMCO Global
Gold, Natural Resources & Income Trust, GAMCO Natural Resources, Gold &
Income Trust (‘collectively GAMCO Funds”), Fire and Police Retiree Health Care
Fund, San Antonio (“San Antonio”) and Sjunde AP-Fonden (“AP”). Although these
Plaintiffs purchased Cobalt stock and not Cobalt Notes, they have the same interest
in proving that Defendants committed the same wrongful acts in the same manner
against all members of the class – by making false and misleading statements that
impacted all members of the proposed class similarly. As a result, even if Universal
and St. Lucie were for some reason inadequate class representatives, these remaining
Plaintiffs are adequate class representatives for all class members, including those
who purchased only Cobalt Notes. See id.; see also In re Petrobras, 312 F.R.D.
at 360.

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IV.

ANALYSIS OF RULE 23(b)(3) FACTORS
Plaintiffs seek class certification pursuant to Rule 23(b)(3). As a result, they

must prove that “the questions of law or fact common to class members predominate
over any questions affecting only individual members [predominance], and that a class
action is superior to other available methods for fairly and efficiently adjudicating the
controversy [superiority].” FED. R. CIV. P. 23(b)(3); Torres, 838 F.3d at 635-36.
A.

Superiority

Defendants in this case do not contest that a class action would normally be a
superior means to adjudicate a securities fraud lawsuit. Indeed, the Court finds that
class certification of this securities fraud case “would achieve economies of time,
effort, and expense, and promote uniformity of decision as to persons similarly
situated, without sacrificing procedural fairness or bringing about other undesirable
results.” See In re Deepwater Horizon, 739 F.3d 790, 819 (5th Cir. 2014) (quoting
Amchem, 521 U.S. at 615).
B.

Predominance

Defendants strenuously argue that common issues of law or fact do not
predominate over individualized issues. “The Rule 23(b)(3) predominance inquiry
tests whether proposed classes are sufficiently cohesive to warrant adjudication by
representation.” Torres, 838 F.3d at 636 (quoting Amchem, 421 U.S. at 623). The

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Rule 23(b)(3) predominance requirement is a demanding one, “even more demanding
that Rule 23(a)’s.” Comcast, 133 S. Ct. at 1432. It is the duty of the Court “to take
a close look at whether common questions predominate over individual ones.” Id.
(internal quotations and citation omitted). “Rule 23(b)(3) requires a showing that
questions common to the class predominate, not that those questions will be answered,
on the merits, in favor of the class.” Amgen Inc. v. Conn. Ret. Plans and Trust Funds,
568 U.S. 455, ___, 133 S. Ct. 1184, 1191 (2013).
Defendants admit that there are common issues of law and fact, such as whether
the Defendants made misrepresentations, whether those misrepresentations were
material, and whether those Defendants identified as “Control Defendants” in fact
controlled Cobalt. Defendants argue, however, that certain individualized issues
predominate over these common issues. Specifically, Defendants argue that issues
relating to Plaintiffs’ actual knowledge that the information on which they base their
claims was materially false or misleading, whether each Plaintiff can trace his
purchase of Cobalt securities to the registration statements, and whether each Plaintiff
can prove reliance on the allegedly false statements. Defendants argue also that
individualized issues regarding whether each individual Plaintiff purchases his shares
in a domestic transaction preclude class certification.

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Actual Knowledge.– Defendants argue that class certification should be denied
because any Plaintiff with actual knowledge that the information on which he bases
his claims was materially false or misleading cannot recover under the securities laws.
Defendants are correct that they cannot be liable under Section 11 to any person who
“at the time [he acquired the security] knew” of the alleged untruth or omission in the
Registration Statement. See 15 U.S.C. § 77k(a). In this case, Defendants argue that
allegations regarding Nazaki’s ownership by Angolan officials were public
knowledge. Plaintiffs respond that those allegations were repeatedly and adamantly
denied by Cobalt. There is no evidence in this record that any putative class member
believed the Nazaki-related allegations notwithstanding Cobalt’s denials, or that any
putative class member otherwise had actual knowledge of Nazaki’s true ownership.
Defendants’ speculation that such class members may exist does not support a finding
that the “actual knowledge” issue predominates over the common issues in this case.
Tracing.– Defendants argue that class certification is improper because each
individual Plaintiff must trace his purchase of Cobalt securities to a relevant
registration statement. “To be sure, only those who can trace their shares to the
allegedly misleading registration statement” can recover on a Section 11 claim. See
Wallace v. IntraLinks, 302 F.R.D. 310, 319 (S.D.N.Y. 2014) (citing In re Global
Crossing, Ltd. Sec. Litig., 313 F. Supp. 2d 189, 207 (S.D.N.Y. 2003)). “But tracing

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is a merits issue that the court need not consider at the class certification stage.” Id.
(citing In re Smart Technologies, Inc. Shareholder Litig., 295 F.R.D. 50, 61-62
(S.D.N.Y. 2013)). As a result, the requirement that each Plaintiff must ultimately
show that he purchased his shares of Cobalt stock in connection with a public offering
does not preclude class certification.
Reliance.– Reliance is an element of Plaintiffs’ Section 10(b) claim. See
Amgen Inc. v. Conn. Ret. Plans and Trust Funds, 568 U.S. 455, ___, 133 S. Ct. 1184,
1192 (2013). Defendants argue that each individual class member must prove that he
relied on the allegedly false representations, and that the reliance issue predominates
over the common issues in the case. In Basic Inc. v. Levinson, the Supreme Court
recognized that requiring individualized proof of reliance “would place an
unnecessarily unrealistic evidentiary burden” on securities fraud plaintiffs who traded
on “an impersonal market.” Basic, 485 U.S. 224, 245 (1988); see also Amgen, 133
S. Ct. at 1192. As a result, the Supreme Court in Basic “endorsed the ‘fraud-on-themarket’ theory, which permits certain Rule 10b-5 plaintiffs to invoke a rebuttable
presumption of reliance on material misrepresentations aired to the general public.”
Id. (citing Basic, 485 U.S. at 241-249). “The fraud-on-the market theory rests on the
premise that certain well developed markets are efficient possessors of public
information. In such markets, the market price of shares will reflect all publicly

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available information.” Id. (internal quotations and brackets omitted) (citing Basic,
485 U.S. at 246).
A plaintiff asserting a Section 10(b) claim is entitled to the presumption of
reliance if he shows the following: “(1) that the alleged misrepresentations were
publicly known, (2) that they were material, (3) that the stock traded in an efficient
market, and (4) that the plaintiff traded the stock between the time the
misrepresentations were made and when the truth was revealed.” Halliburton Co. v.
Erica P. John Fund, Inc., __ U.S. __, 134 S. Ct. 2398, 2408 (2014). Defendants do
not contest that Plaintiffs can satisfy these requirements for purposes of Cobalt stock,
but argue that the Cobalt Notes were not traded in an efficient market. In Halliburton,
the Supreme Court reaffirmed the Basic presumption, while acknowledging that the
“markets for some securities are more efficient than the markets for others, and even
a single market can process different kinds of information more of less efficiently,
depending on how widely the information is disseminated and how easily it is
understood.” Id. at 2409. The presumption of reliance is based on the premise that
“market professionals generally consider most publicly announced material statements
about companies, thereby affecting stock market prices.” Id. at 2410 (citing Basic,
485 U.S. at 247 n. 24). The Supreme Court in Basic recognized that market efficiency
is a matter of degree. Id.

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Many, indeed most, courts have held that bond markets are sufficiently efficient
to support the fraud-on-the-market presumption of reliance. See, e.g., In re NII
Holdings, Inc. Sec. Litig., 311 F.R.D. 401 (E.D. Va. 2015); Bennett v. Sprint Nextel
Corp., 298 F.R.D. 498 (D. Kan. 2014); In re Winstar Comm. Sec. Litig., 290 F.R.D.
427 (S.D.N.Y. 2013); In re Enron Corp. Sec. Derivative & ERISA Litig., 529 F. Supp.
2d 644 (S.D. Tex. 2006). In this case, Plaintiffs’ expert provided a report discussing
the various factors set forth in Cammer v. Bloom, 711 F. Supp. 1264 (D.N.J. 1989),1
and provided his opinion that the market for Cobalt Notes was efficient. Defendants
raise objections to Plaintiffs’ expert’s report, but Defendants’ own expert was
unwilling or unable to state that the market for Cobalt Notes was not efficient. See
Deposition of Lucy Allen, Exh. 10 to Plaintiffs’ Reply, p. 282. The Court finds that
Plaintiffs have provided expert testimony demonstrating, at this class certification
stage, that the market for Cobalt Notes was adequately efficient to allow them to rely
on the fraud-on-the market presumption of reliance.

1

The Cammer factors include (1) the stock’s average trading volume; (2) the number
of analysts that follow and report on the stock; (3) the number of market makers;
(4) eligibility to file an S-3 Registration Statement; and (5) the reaction of the stock
price to unexpected news events. See Cammer, 711 F. Supp. at 1286-87; see also
McNamara v. Bre-X Minerals, Ltd., 2002 WL 32076175, *4 (E.D. Tex. Sept. 30,
2002). “Because the Cammer factors were created in the context of the stock markets,
courts adjust them for the realities of the over the counter bond market.” Winstar, 290
F.R.D. at 446.

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Defendants argue that, even if Plaintiffs are entitled to the rebuttable
presumption of reliance based on the fraud-on-the-market theory, they have presented
evidence that rebuts that presumption. The Court agrees that the presumption can be
rebutted by evidence presented by the defendant that “severs the link between the
alleged misrepresentation and either the price received (or paid) by the plaintiff, or his
decision to trade at a fair market price.” See Halliburton, 134 S. Ct. at 2408. “In the
absence of price impact, Basic’s fraud-on-the-market theory and presumption of
reliance collapse.” Id. at 2414. Defendants argue that the presumption of reliance has
been rebutted by evidence that the alleged fraud had no price impact.
Defendants argue that there was no statistically significant price impact from
the disclosures on April 15, 2012, regarding Nazaki’s ownership. Yet, the first
morning following that disclosure, the stock price fell 11%. Defendants argue there
was no price impact from the December 1, 2013 press release regarding the Lontra
well or the November 4, 2014 press release regarding the Loengo well, yet the stock
prices fell 21% and 11%, respectively, following those disclosures. Defendants argue
also that there was no price impact from the August 5, 2014 Bloomberg article
regarding “social payments” to an Angolan research center that did not exist and
regarding the SEC’s issuance of a “Wells Notice” recommending the institution of an
enforcement action against Cobalt in connection with the FCPA investigation. The

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undisputed evidence, however, is that the price of Cobalt stock fell 11% following
publication of the Bloomberg article. Defendants do not provide an alternate
explanation for these significant declines in the Cobalt stock price. As a result,
Defendants have not demonstrated that there was no price impact from the challenged
disclosures and have failed to rebut the fraud-on-the-market presumption.2 Because
the fraud-on-the-market presumption remains in effect, reliance issues do not
predominate over the common issues of law or fact.
Foreign Purchases.– Federal securities laws apply only to conduct “in
connection with the purchase or sale of a security listed on an American stock
exchange, and the purchase or sale of any other security in the United States.”
Morrison v. Nat’l Austl. Bank. Ltd., 561 U.S. 247, 273 (2010). Defendants argue that
foreign transactions of Cobalt Notes can impose no liability. It is unclear, however,
whether any member of the proposed class engaged in foreign transactions – as
opposed to foreign purchasers who engaged in domestic transactions. To the extent
there were foreign purchases, there should be purchase documentation available to
2

In connection with their argument regarding the absence of price impact, Defendants
argue also that several of Cobalt’s statements at issue are incorrectly characterized as
corrective disclosures. Defendants’ arguments about whether the disclosures were
actually corrective has no bearing on the predominance inquiry for class certification.
See Marcus v. J.C. Penney Co., Inc., 2016 WL 8604331, *8 (E.D. Tex. Aug. 29,
2016) (citing Amgen, 133 S. Ct. at 1203). Resolution of the dispute regarding whether
the statements were corrective “is an issue that is common to all members of the class
and thus does not defeat predominance.” Id.

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determine objectively and easily whether any class member’s purchase satisfies
Morrison. Moreover, the Cobalt Notes are convertible upon maturity into shares of
Cobalt’s common stock, which are listed and traded on a domestic exchange. As a
result, it is likely the Cobalt Notes would qualify as a transaction involving securities
listed on a domestic exchange for purposes of Morrison. See Valentini v. Citigroup,
Inc., 837 F. Supp. 2d 304, 323 (S.D.N.Y. 2011). Therefore, this issue does not
predominate over the common issues of law and fact.
V.

MISCELLANEOUS ISSUES
A.

2019 Note Purchases after April 30, 2013

Defendants argue that any class member who purchased the 2019 Cobalt Notes
(Notes maturing in 2019) after April 30, 2013, cannot pursue a Section 11 claim
because those claims have been dismissed. Defendant is correct that no Plaintiff who
purchased such notes after April 30, 2013, can recover under Section 11 based on
those purchases. The Court’s prior dismissal of that claim, however, has no bearing
on whether this case should be certified as a class action under Rule 23.
B.

Three-Year Statute of Repose

Section 11 claims are subject to a three-year statute of repose which provides
that “[i]n no event” shall an action be brought “more than three years after the security
was bona fide offered to the public.” 15 U.S.C. § 77m. Defendants argue that this

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three-year statute of repose may have expired for absent class members. Whether the
statute of repose applies to bar absent class members’ Section 11 claims is a common
question of law applicable to all class members. Application of that legal issue would
involve a simple review of purchase documents demonstrating when the purchase
occurred. As a result, this issue does not preclude class certification.
C.

Exclusion of Foreign Purchasers

Defendants argue that foreign purchasers should be excluded from the class
because their home jurisdiction may not enforce the resulting judgment. The res
judicata effect of any judgment from this case in another country is not before this
Court. That issue will be addressed by the appropriate court when and if a judgment
against a Defendant is entered. Potential res judicata issues do not preclude class
certification or require that all foreign purchasers be excluded from the class
particularly where, as here, Defendants engaged in significant business operations in
the United States, Cobalt’s common stock is traded on the New York Stock Exchange,
the stock purchases in this case were executed on that exchange, and Defendants are
alleged to have made the misrepresentations in the United States.
VI.

CONCLUSION AND ORDER
Based on the foregoing, it is hereby

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ORDERED that Plaintiffs’ Motion for Class Certification and Appointment of
Class Representatives and Class Counsel [Doc. # 163] is GRANTED. It is further
ORDERED that, Defendants not having objected to the specific phrasing of the
class definition requested by Plaintiffs, the Court certifies the following class as
Plaintiffs request:
All persons and entities who purchased or otherwise
acquired Cobalt securities between March 1, 2011 and
November 3, 2014, inclusive, and were damaged thereby.
Included within the Class are all persons and entities who
purchased shares of Cobalt common stock on the open
market and/or pursuant or traceable to the registered public
offerings on or about (i) February 23, 2012; (ii) January
16, 2013; and (iii) May 8, 2013. Also included within the
Class are all persons and entities who purchased Cobalt
convertible senior notes on the open market and/or pursuant
or traceable to registered public offerings on or about
(i) December 12, 2012; and (ii) May 8, 2014.
Excluded from the Class are Defendants, the officers and
directors of the Defendants during the Class Period (the
"Excluded Officers and Directors"); members of the
immediate families of the individual Defendants and of the
Excluded Officers and Directors; any entity in which any
Defendant, any Excluded Officer or Director, or any of
their respective immediate family members has, and/or had
during the Class Period, a controlling interest; Defendants’
liability insurance carriers; any affiliates, parents, or
subsidiaries of the corporate Defendants; all corporate
Defendants’ plans that are covered by ERISA; and the legal
representatives, heirs, agents, affiliates, successors-ininterest or assigns of any excluded person or entity, in their
respective capacity as such.

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It is further ORDERED that Plaintiffs GAMCO Global Gold, Natural
Resources & Income Trust; GAMCO Natural Resources, Gold & Income Trust; St.
Lucie County Fire District Firefighters’ Pension Trust Fund; Fire and Police Retiree
Health Care Fund, San Antonio; Sjunde AP-Fonden; and Universal Investment
Gesellschaft m.b.H. are appointed as Class Representatives. It is further
ORDERED that Entwistle & Cappucci LLP and Bernstein Litowitz Berger &
Grossmann LLP are appointed as Class Counsel. It is further
ORDERED that counsel shall appear before the Court on July 12, 2017, at
10:00 a.m. for a status and scheduling conference. On or before July 7, 2017, counsel
shall file a proposed Docket Control Order to govern the remaining deadlines in this
case.
SIGNED at Houston, Texas, this 15th day of June, 2017.

NAN Y F. ATLAS
SENIOR UNI
STATES DISTRICT JUDGE

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