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IN RE CHAMBERS DEV. CO. SECS. LITIG.

UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA


May 30, 1995

IN RE: CHAMBERS DEVELOPMENT COMPANY SECURITIES LITIGATION; This Document Relates to: ALL CLASS ACTIONS

The opinion of the court was delivered by: LEE

FINAL JUDGMENT AND ORDER OF DISMISSAL AS TO ALL DEFENDANTS

 This matter having come before the Court on motion for approval of a Class Action Stipulation and Agreement of Compromise and Settlement entered into on February 24, 1995, and the Supplement thereto dated March 20, 1995 (the "Chambers Supplement"), between the plaintiffs in the above-referenced action (the "Plaintiffs") and defendants Chambers Development Company, Inc. ("Chambers"), John G. Rangos, Sr., John G. Rangos, Jr., Alexander W. Rangos, Joseph G. Stotlemyer, Michael J. Peretto (listed as "Paretto" in the Amended Consolidated Class Action Complaint (the "Complaint")), Frank D. Hutchinson, Estate of Hugh Scott, William E. Moffett, John M. Arthur, John J. Cushma, and William R. Nelson (the "Chambers Defendants") (collectively, the "Chambers Stipulation"), and on motion for approval of a Class Action Stipulation and Agreement of Compromise and Settlement dated March 17, 1995, and the Amendment thereto dated March 20, 1995 (the "Grant Thornton Amendment"), between the Plaintiffs and defendants Grant Thornton LLP ("Grant"), Richard Stewart, David Abramson, Domenick Esposito and Charles Fallon, individually and on behalf of the defendant class of Grant partners named in the Complaint (the "Grant Thornton Settling Defendants") (collectively, the "Grant Stipulation"), in this consolidated class action (the "Action"), and the Court, having considered all papers filed and proceedings held in connection with said motions, having held a hearing on May 19, 1995 (the "Hearing"), notice of the Hearing having duly been given in accordance with the Court's Hearing Order dated March 22, 1995, and finding no just reason for delay in entry of this Final Judgment and good cause appearing therefor:

 NOW, THEREFORE, this 30th day of May, 1995,

 IT IS HEREBY ORDERED THAT:

 1. This Court has jurisdiction over the subject matter of this Action and over all parties to this Action, including all Members of the Class. The Class consists of all persons who between March 18, 1988 and October 20, 1992, both dates inclusive, purchased securities issued by Chambers (the "Class"). Excluded from the Class are each of the defendants, officers and directors of Chambers, members of the immediate family of each of the individual defendants, and affiliates of the corporate defendants, partners and partnership defendants.

 2. This Court hereby approves (i) the settlement set forth in the Chambers Stipulation (the "Chambers Settlement"); and (ii) the settlement set forth in the Grant Stipulation (the "Grant Settlement") and finds that both the Chambers Settlement and the Grant Settlement are, in all respects, fair, reasonable and adequate to the Class.

 3, This Court hereby finds and concludes that the notice given to the Class was in compliance with this Court's Order dated March 22, 1995 and that said notice was the best notice practicable under the circumstances and fully satisfies the requirements of Rule 23 of the Federal Rules of Civil Procedure and the requirements of due process, including, but not limited to, the form of notice and methods of identifying and giving notice to the Class.

 4. This Court hereby dismisses, on the merits and with prejudice, without costs to any party, other than those designated below, this Action in favor of each and all of the Chambers Defendants, Releasees, Underwriter Defendants and Underwriter Releasees (as those terms are defined in the Chambers Stipulation). Each and every Releasee and Underwriter Releasee is forever released and discharged from any and all of the "Claims" (as defined in the Chambers Stipulation).

 5. This Court hereby dismisses, on the merits and with prejudice, without costs to any party, other than those designated below, this action in favor of Grant, Richard A. Knight, all of Grant's partners and employees, and all other Grant Releasees (as defined in the Grant Stipulation). Each and every Grant Releasee is forever released and discharged from any and all of the "Class Claims" (as defined in the Grant Stipulation).

 6. Plaintiffs and each and every member of the Class (except members who have properly and timely requested exclusion) are permanently barred and enjoined from instituting, maintaining, prosecuting or enforcing, either directly, individually, representatively, or derivatively, any and all Claims against any of the Chambers Defendants, the Underwriter Defendants or any of the other Releasees or Underwriter Releasees mentioned in the Chambers Stipulation. Those persons appearing on the list annexed hereto, who have requested exclusion from the Class, shall not participate in the proceeds of the Chambers Settlement hereby approved nor receive any benefits thereunder.

 7. Plaintiffs and each and every member of the Class (except putative members of the Class who have properly and timely requested exclusion) are permanently barred and enjoined from instituting, maintaining, prosecuting or enforcing any and all Class Claims, either directly, individually, representatively, or derivatively, against Grant, Richard A. Stewart, David H. Abramson, Domenick J. Esposito, Charles R. Fallon, Richard A. Knight, all of Grant's partners and employees, and all other Grant Releasees (as those terms are defined in the Grant Stipulation). Those persons appearing on the list annexed hereto, who have requested exclusion from the Class, shall not participate in the proceeds of the Grant Settlement hereby approved nor receive any benefits thereunder.

 8. The Chambers Stipulation and the Chambers Settlement described therein is not an admission of the validity of any actions or claims which arise out of, directly or indirectly, or are in any way connected with the facts, circumstances, transactions or occurrences described directly or indirectly in this Action, or of any wrongdoing, or of any violation of law; the Chambers Stipulation and the Chambers Settlement described therein is not a concession and neither shall be used as an admission of any fault or omission in any statement, release, or written document issued, filed, or made; and neither the Chambers Stipulation nor the Chambers Settlement described therein or any related document shall be offered or received in evidence in any civil, criminal, or administrative action or proceeding other than such proceedings as may be necessary to consummate or enforce the Chambers Stipulation and the Chambers Settlement described therein.

 9. The Grant Stipulation and the Grant Settlement described therein are not an admission of the validity of any actions or claims which arise out of, directly or indirectly, or are in any way connected with the facts, circumstances, transactions or occurrences described directly or indirectly in this Action, or of any wrongdoing, or of any violation of law; the Grant Stipulation and the Grant Settlement described therein are not a concession and neither shall be used as an admission of any fault or omission in any statement, release, or written document issued, filed, or made; and neither the Grant Stipulation nor the Grant Settlement described therein or any related document shall be offered or received in evidence in any civil, criminal, or administrative action or proceeding other than such proceedings as may be necessary to consummate or enforce the Grant Stipulation and the Grant Settlement described therein.

 10. Without affecting the finality of this judgment, the Court hereby reserves and retains continuing jurisdiction over all matters relating to the administration and effectuation of the terms of (i) the Chambers Stipulation and the Chambers Settlement embodied therein; and (ii) the Grant Stipulation and the Grant Settlement embodied therein.

 11. In the event that the Chambers Settlement does not become effective in accordance with the terms of the Chambers Stipulation, then this judgment shall be rendered null and void and be vacated as to the parties and terms contained in the Chambers Stipulation, and the Chambers Stipulation and all orders entered in connection therewith (except for any bar order covering the Grant Thornton Settling Defendants) shall be rendered null and void.

 12. This Final Judgment and Order of Dismissal as to the Grant Thornton Settling Defendants, the Grant Stipulation, and all orders entered in connection therewith are final and unconditional with respect to the Grant Thornton Settling Defendants.

 13. Plaintiffs' Co-Lead Counsel shall take such reasonable steps as may be necessary to process the Proofs of Claim and otherwise bring about the consummation of the Chambers Settlement and the Grant Settlement, including the payment of the administration agent who receives and processes the Proofs of Claim.

 BAR ORDER WITH RESPECT TO CLAIMS BROUGHT AGAINST THE SETTLING DEFENDANTS

 UPON review and consideration of (a) the Class Action Stipulation and Agreement of Compromise and Settlement, dated February 24, 1995, executed on behalf of the Plaintiffs in the above-referenced consolidated class actions ("Action") and defendants Chambers Development Company, Inc. ("Chambers"); John G. Rangos, Sr.; John G. Rangos, Jr.; Alexander W. Rangos; Joseph G. Stotlemyer; Michael J. Peretto (listed as "Paretto" in the Complaint); Frank D. Hutchinson; Estate of Hugh Scott; William E. Moffett; John M. Arthur; John J. Cushma; and William R. Nelson (collectively "Chambers Defendants") by their duly authorized counsel and the Supplement thereto dated March 20, 1995 executed on behalf of the Plaintiffs and Chambers with respect to the Plaintiffs' claims against the Underwriter Defendants as therein defined (the February 24, 1995 Stipulation and the March 20, 1995 Supplement are referred to herein as the "Chambers Stipulation"); and (b) the Class Action Stipulation and Agreement of Compromise and Settlement, dated March 17, 1995, and Amendment thereto, dated March 20, 1995, executed on behalf of the Plaintiffs in the Action and defendants Grant Thornton, Richard A. Stewart, David H. Abramson, Domenick J. Esposito, and Charles R. Fallon (collectively, the "Grant Thornton Defendants") by their duly authorized counsel ("Grant Thornton Defendants' Stipulation"); and UPON consideration of all prior proceedings in the Action; and

 UPON consideration of the aforesaid Stipulations which would have the effect of settling and dismissing the Action upon the terms and conditions set forth therein (the "Settlement"); and

 UPON consideration of the Final Judgment and Order of Dismissal entered by this Court;

 1. The following additional definitions shall apply in this Order:

 

a) "Non-Settling Person" means (i) any defendant that is or becomes a non-settling defendant because the claims against such defendant are not the subject of the Chambers Stipulation or the Grant Thornton Defendants' Stipulation or because the Stipulation to which that defendant is a party or a beneficiary is either terminated or otherwise does not become finally effective or (ii) any future defendant or third-party defendant or other person or entity that asserts any Claims-Over against the Settling Defendants or Releasees;

 

b) "Releasees" means, (i) in the event the Chambers Stipulation is approved by the Court and becomes finally effective, (a) each of the Chambers Settling Defendants, Chambers' present and former officers, directors, agents, employees, attorneys, consultants, representatives, affiliates, subsidiaries, successors and assigns, and the individual Chambers Settling Defendants' heirs, administrators and executors, and (b) each of the Underwriter Releasees as defined in paragraph 1 of the Supplement; (ii) in the event the Grant Thornton Defendants' Stipulation is approved by the Court and becomes finally effective, each of the Grant Settling Defendants, Grant Thornton's present and former partners, principals, agents, employees, attorneys, consultants, representatives, affiliates, insurers, predecessors, successors and assigns, and the heirs, administrators and executors and/or successors and assigns thereof; (iii)(a) in the event that only the Chambers Stipulation is approved by the Court and becomes finally effective, Richard A. Knight shall be a Releasee solely as to the period of time during which he was an officer of Chambers and solely as to those acts performed as an officer, director or employee, on behalf of Chambers only; and (b) in the event that only the Grant Thornton Defendants' Stipulation is approved or both Stipulations are approved, Richard A. Knight shall be a Releasee.

 

c) "Settling Defendant" means any defendant with respect to whom the Settlement is approved by the Court and also becomes finally effective in accordance with the terms of the Stipulations.

 

d) "Stipulations" means the Chambers Stipulation and the Grant Thornton Defendants' Stipulation, as those terms are defined above.

 

e) "Claims-Over" means any action, claim or proceeding which is or may be brought against any Releasee either in the Action or in a separate proceeding by any claimant in which the claimant seeks recovery from any Releasee in the nature of contribution, indemnity or otherwise for all or some portion of any judgment or settlement that Plaintiffs or any Member may obtain against the claimant in respect of or for any Claims as defined in the Chambers Stipulation.

 

f) All capitalized terms used, but not otherwise defined herein, shall have the meanings ascribed to them in the Stipulations.

  2. All Non-Settling Persons are permanently barred and enjoined forever from filing or maintaining any and all Claims-Over, subject to the limitations in paragraphs 3 and 4 below. This injunction and bar order applies to any form of action including without limitation any claim by way of third-party or subsequent party complaint, collateral action, cross-claim, separate action or otherwise; provided, however, that this Order shall not extend to bar any claims in the nature of contribution or indemnity that any of the defendants in the Action have asserted, or in the future may assert, against one another (a) in the litigation styled as Option Resource Group et al. v. Chambers Development Company, Civil Action No. 93-354 (W.D. Pa. filed Mar. 9, 1993), or (b) in any litigation that is instituted by any member of the plaintiff class in the Action who or which duly excludes himself, herself or itself from that class in accordance with the procedures established by the Court. The method for calculating judgment reduction credits available to Non-Settling Persons in the event that Plaintiffs or any Members obtain any judgments against one or more of the Non-Settling Persons is set forth below in paragraph 5. Any action or proceeding to enforce this Order may be brought in this Court.

 

3a) This Order does not prevent Chambers or any of its officers, directors, or employees from asserting any set-off or counterclaim against Richard A. Knight or any other Releasee who is not a Settling Defendant, in the event that they, or any of them, assert any claim or cause of action of any kind whatsoever against Chambers or any of its officers, directors, or employees.

 

b) This Order does not prevent Richard A. Knight from asserting against Chambers or any of its officers, directors, or employees any claim related to or arising from his employment with Chambers, including but not limited to, claims for compensation or other employee benefits; claims arising from or related to Knight's purchase and ownership of Chambers stock; and claims for retirement or pension benefits.

 4. This Order will not prevent any Releasee from asserting any enforceable claim for contribution, indemnity or defense costs which is provided for in a written contract or in Chambers' bylaws or other governing corporate documents.

 5. The amount of any judgment otherwise obtained by any Plaintiff or Member against any Non-Settling Person in this or any other action in which Non-Settling Persons assert any Claims-Over against any Settling Defendants (or could have asserted such claims but for this Order), shall be reduced by the greater of:

 

a) the total value of the settlement consideration paid by the Settling Defendants this Action, exclusive of accrued interest; or

 

b) an amount reflecting all Settling Defendants' collective proportionate responsibility, if any, as determined by the fact-finder, for any damages obtained by any Plaintiff or Member against any Non-Settling Person for claims or causes of action consisting of, based on, arising from or related to any Claims.

 Thus, by way of illustration, if the trier of fact would determine at trial that the total loss to the Plaintiff Class is $ 20 million ($ 20,000,000.00) and that the Settling Defendants are collectively forty percent (40%) liable under the doctrine of proportionate fault and the Non-Settling Persons are collectively sixty percent (60%) liable, then Plaintiff Class' judgment against the Non-Settling Persons shall be reduced by the greater of (a) the total value of the settlement consideration or (b) $ 8 million ($ 8,000,000.00).

 The judgment reduction method described herein will apply for all Non-Settling Persons.

 This Court finds that there is no just reason for delay in entry of a final judgment, and this order shall constitute a final judgment in accordance with Rule 54(b) of the Federal Rules of Civil Procedure.

 Donald J. Lee

 United States District Judge

  APPENDIX LIST OF OPT-OUTS IN CHAMBERS DEVELOPMENT COMPANY SECURITIES LITIGATION LIST OF OPT-OUTS IN CHAMBERS DEVELOPMENT COMPANY SECURITIES LITIGATION Number of Name and Address Shares 1. Option Resources Group c/ Richard N. Bell Cohen & Malad, P.C. 136 N. Delaware Indianapolis, IN 46204-0627 Not Given 2. Joseph S. Oswald 2759 Liberty Street Trenton, NJ 08629 100 3. Frank E. Williams 1 Lincoln Heights Buckhannon, WV 26201 Not Given 4. David M. Boyd Pineview Drive, RD-1 Palmyra, PA 17078 100 5. William K. Waggener 13223 North 109th Avenue Sun City, AZ 85351-2505 100 6. Douglas Rittenberry P.O. Box 248 Canyon, TX 79015 10 7. Vernon W. Underwood 5966 Murdock Avenue Bethel Park, PA 15102 600 8. Evelyn Noren 3215 East David Lane Winnemucca, NV 89445 100 9. Katherine Kurtz - Virginia Hoyt c/ Michelle Jamison The Boston Co. One Boston Place Boston, MA 02108 200 10. UFCW Local 1262 c/ Michelle Jamison The Boston Co. One Boston Place Boston, MA 02108 2,840 11. Walter L. Sanders John Norton McMillan, Sr. McMillan & Sanders, Inc. 1315 Garner Lane Jamestown Square Suite 106 Columbia, SC 20210 Not Given 12. Fred A. Moran Moran Family Moran & Associates, Inc. Securities Brokerage 25 Doubling Road Greenwich, CT 06830-4845 483,600

19950530

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