Chesemore et al v. Alliance Holdings, Inc. et al

Filing 969

ORDER granting 939 Motion for Appointment of Independent Fiduciary. Plaintiffs to submit a letter by 8/1/14 to update the court on the settlement with the Fenkells. If a telephone hearing is necessary, it will be held 8/4/14 at 6:00 pm. The Alliance defendants may file a response to 938 by 7/29/14. Replies due 8/1/14. Signed by District Judge William M. Conley on 7/24/14. (rep)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF WISCONSIN

CAROL CHESEMORE, DANIEL
DONKEL, THOMAS GIECK, MARTIN
ROBBINS, and NANETTE STOFLET, on
behalf of themselves, individually, and on
behalf of all others similarly situated,

Plaintiffs,
v.

ORDER
09-cv-413-wmc

ALLIANCE HOLDINGS, INC., DAVID B.
FENKELL, PAMELA KLUTE, JAMES
MASTRANGELO, STEPHEN W. PAGELOW,
JEFFREY A. SEEFELDT, TRACHTE
BUILDING SYSTEMS, INC. EMPLOYEE
STOCK OPTION PLAN, ALLIANCE HOLDINGS,
INC. EMPLOYEE STOCK OPTION PLAN,
A.H.I., INC., ALPHA INVESTMENT
CONSULTING GROUP, LLC, JOHN MICHAEL
MAIER, AH TRANSITION CORPORATION, and
KAREN FENKELL,
Defendants;
PAMELA KLUTE, JAMES MASTRANGELO,
and JEFFREY A. SEEFELDT,
Cross Claimants,
v.
ALLIANCE HOLDINGS, INC., and STEPHEN W.
PAGELOW,
Cross Defendants.
On July 24, 2014, the court held a fairness hearing on a proposed class action
settlement at which all parties appeared by counsel.

The court previously granted

preliminary approval of six settlements based on executed “term sheets” which set forth

the essential elements of the settlements, and approved a class notice based on those
terms. (2/18/14 Order (dkt. #889); 4/9/14 Order (dkt. #913); Notice (dkt. #910-2).)
Three groups of defendants have now filed executed, final settlement agreements.
Unfortunately, plaintiffs have not been able to reduce their agreements to final
settlement agreements with respect to defendants David and Karen Fenkell, and as a
consequence, with respect to the Trachte Building Systems, Inc. and the Trachte ESOP
defendant, because that settlement depends on the finalization of one of the Fenkell
settlement agreements.
This order simply addresses the Alliance defendants’ motion for appointment of
an independent fiduciary (dkt. #939), and confirms deadlines for additional filings and a
telephonic hearing established at the hearing held today. As for next steps, the court
anticipates granting final approval of the settlements (hopefully, including those with the
Fenkells and the Trachte defendants) the week of August 4, 2014, or shortly thereafter. 1
That order will also address plaintiffs’ motions for (1) payment of incentive awards (dkt.
#921); (2) attorneys’ fees and costs as part of the settlement (dkt. #928); and (3)
attorneys’ fees and costs pursuant to ERISA § 502(g)(1) against defendant David Fenkell
(dkt. #934). Accordingly,

1

The court sees no basis, as the Alliance defendants urge, for delaying final approval
until the independent fiduciary completes its valuation of the stock and PTE
determinations. In the anticipated order approving the settlement, however, the court
will retain jurisdiction over enforcement of the settlement, including over any objections
by the independent fiduciary based on the PTE determinations.
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ORDER
IT IS ORDERED that:
1) The Alliance defendants’ motion for appointment of an independent fiduciary
(dkt. #939) is GRANTED. The court appoints Evercore Trust to make the
determination of fair market value of Alliance and AH Transition Corporation
stock in accordance with DOL Proposed Regulation § 2510.3-.19 and to make
certain determinations required by Prohibited Transaction Exemption (PTE)
2003-39, as described in 75 Fed. Reg. 33830 (June 15, 2010). Evercore Trust
should complete its valuation and submit a report to Alliance on or before
September 30, 2014.
2) On or before August 1, 2014, plaintiffs shall submit a letter to the court,
providing an update on the status of the settlements with the Fenkells, and in
particular addressing the concerns about confirmatory discovery. If final
written settlements have not been submitted for the Fenkell settlements, the
court will hold a telephonic hearing on August 4, 2014, at 6:00 p.m. to address
the status of those settlements. Plaintiffs to initiate the call to chambers at
608-264-5087.
3) The Alliance defendants may have until July 29, 2014, to respond to the issues
raised in David Fenkell’s opposition to plaintiffs’ motion for attorneys’ fees
against him pursuant to ERISA § 502(g)(1) (dkt. #938). Any reply by Fenkell
is due on or before August 1, 2014.
Entered this 24th day of July, 2014.
BY THE COURT:
/s/
__________________________________
WILLIAM M. CONLEY
District Judge

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