The opinion of the court was delivered by: Terrence F. McVerry United States District Court Judge
MEMORANDUM OPINION AND ORDER OF COURT
Presently before the Court for disposition is the following:
* MOTION OF TRUSTEE, GEORGE MILLER, TO INTERVENE, with brief in support (Document Nos. 146 and 147, respectively);
* DEFENDANTS JOHN W. HIGBEE AND FREDERICK R. JACKSON, SR.'S RESPONSE TO MOTION TO INTERVENE OF GEORGE L. MILLER, AS CHAPTER 7 TRUSTEE OF THE ESTATE OF WORLD HEALTH ALTERNATIVES, INC., in which Defendants Higbee and Jackson "take no position with respect to, and do not oppose, the Trustee's Motion to Intervene at this time." (Document No. 153);
* PLAINTIFFS' MEMORANDUM OF LAW IN RESPONSE TO TRUSTEE GEORGE MILLER'S MOTION TO INTERVENE, in which "Plaintiffs contest the Trustee's motion to intervene as of right, but do not object to permissive intervention." (Document No. 155); and
* DEFENDANT, DASZKAL BOLTON L.L.P.'S MEMORANDUM OF LAW IN RESPONSE TO TRUSTEE GEORGE MILLER'S MOTION TO INTERVENE, in which Defendant Daszkal Bolton contends that the Trustee's motion should be denied in its entirety.
After careful consideration of the filing of the parties, and the applicable case law, the Motion to Intervene will be denied in its entirety.
This litigation is a securities fraud class action, originally brought against World Health Alternatives, Inc., ("World Health"), several of its officers and directors, and its accounting firm, Daszkal Bolton, LLP. Between August 24, 2005 and October 17, 2005, eight (8) additional lawsuits were filed on behalf of investors who had purchased World Health common stock between June 26, 2003 and August 19, 2005. By Order of Court, all the cases were consolidated under Case No. 05-1194.
All but one of the consolidated cases named World Health as a defendant, not a plaintiff. The Strunkor case, which was not a class action, was brought by Timothy Strunkor, derivatively and on behalf of World Health Alternatives, Inc. The Strunkor case purported to seek recovery from World Health's directors and accounting firm. After the Strunkor case was consolidated with the Class Action, it was designated as "closed." Plaintiff Strunkor did not seek appointment as Lead Plaintiff nor did he attempt to separate his case from the Class Actions.
On February 21, 2006, World Health filed for Bankruptcy protection, and all litigation against it was subject to automatic stay.*fn1 On March 3, 2006, the Court conducted a status conference with counsel for all parties to determine among many things whether this case should proceed as to the remaining defendants despite the bankruptcy of World Health. The Court concluded that the claims and interests of the remaining parties did not overlap with any rights or proprietal interests of World Health's bankruptcy and that the case would proceed against all defendants, except the bankrupt World Health. Thereafter, Lead Plaintiffs were ordered to file a Consolidated Class Action Complaint on or before April 21, 2006.
On April 21, 2006, Lead Plaintiffs, the Columbus Capital Plaintiffs, filed a Consolidated Class Action Complaint which named as defendants former Chief Executive Officer of World Health, Richard McDonald; former directors John W. Higbee and Frederick R. Jackson, Sr.; former Officer John W. Sercu; and World Health's accounting firm, Daszkal Bolton, LLP.*fn2 The Consolidated Class Action Complaint alleged claims on behalf of all investors who purchased common stock of World Health between August 17, 2004 and August 19, 2005, and may have suffered damages as a result. Significantly, World Health was not named as a party and no claims were asserted either on behalf of or against World Health. Further, the Consolidated Class Action Complaint states clearly that "this action is a securities class action on behalf of purchasers of the common stock of World Health;" there is no averment in the Consolidated Class Action Complaint that a derivative action is being made by a shareholder of World Health.
Lead Plaintiffs and the named defendants in the Consolidated Class Action Complaint commenced settlement negotiations shortly after the filing of the Consolidated Class Action Complaint. On November 17, 2006, Plaintiffs filed with the Court an Unopposed Motion in Support of Preliminary Approval of Settlement. The proposed Settlement provides consideration of $2.7 million, plus certain stock holdings of Richard McDonald, in return for a release of all claims against the named defendants by class members. World Health is not a
Released Party, nor a class member, and any claims that could be brought by World Health or its successor are not released. In fact, no part of the settlement ...