in the united states district court for the district of ... · mailing information for a case...

1262632_1

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO

Civil Action No. 1:12-cv-00292-RM-KMT

In re MOLYCORP, INC. SECURITIES LITIGATION

DECLARATION OF TRIG R. SMITH IN SUPPORT OF AN AWARD OF ATTORNEYS’ FEES AND EXPENSES

Case 1:12-cv-00292-RM-KMT Document 252 Filed 05/05/17 USDC Colorado of 5

- 1 - 1262632_1

I, TRIG R. SMITH, declare as follows:

1. I am a member of the firm of Robbins Geller Rudman & Dowd LLP. I am submitting

this declaration in support of Lead Counsel’s Motion for an Award of Attorneys’ Fees and Expenses.

2. Attached hereto are true and correct copies of the following:

Exhibit 1: Rasner v. FirstWorld Commc’ns, Inc., No. 00-K-1376, slip op. (D. Colo. Jan. 19, 2005);

Exhibit 2: Schwartz v. Celestial Seasonings, Inc., No. 95-K-1045, slip op. (D. Colo. Apr. 25, 2000);

Exhibit 3: Queen Uno Ltd. P’ship. v. Coeur D’Alene Mines Corp., No. 97-WY-1431-CB, slip op. (D. Colo. Aug. 11, 1999);

Exhibit 4: In re Einstein Noah Bagel Corp. Sec. Litig., No. 97-N-1614, slip op. (D. Colo. June 4, 1999); and

Exhibit 5: In re Intelcom Grp., Inc. Sec. Litig., No. 95-D-1166, slip op. (D. Colo. Mar. 21, 1997).

I declare under penalty of perjury that the foregoing is true and correct. Executed this 5th

day of May, 2017, at San Diego, California.

s/ Trig R. Smith TRIG R. SMITH


CERTIFICATE OF SERVICE

I hereby certify that on May 5, 2017, I authorized the electronic filing of the foregoing with

the Clerk of the Court using the CM/ECF system which will send notification of such filing to the

e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I

caused to be mailed the foregoing document or paper via the United States Postal Service to the non-

CM/ECF participants indicated on the attached Manual Notice List.

I certify under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on May 5, 2017.

s/ Trig R. Smith TRIG R. SMITH

ROBBINS GELLER RUDMAN & DOWD LLP 655 West Broadway, Suite 1900 San Diego, CA 92101-8498 Telephone: 619/231-1058 619/231-7423 (fax) E-mail: [email protected]


Mailing Information for a Case 1:12-cv-00292-RM-KMT Molycorp Shareholder Group

et al v. Molycorp, Inc. et al

Electronic Mail Notice List

The following are those who are currently on the list to receive e-mail notices for this case.

• Matthew Alpert

[email protected]

• Stephen M. Baldini

[email protected],[email protected],[email protected],stephen-baldini-

[email protected],[email protected]

• Jeffrey Allen Berens


• David Adam Berger

[email protected]

• Ryan Edward Blair


• Brian Thomas Carney

[email protected],[email protected],brian-carney-

[email protected],[email protected],[email protected]

• Koji F. Fukumura


• Jonah H. Goldstein


• Tor Gronborg


• John Jay Gross


• Leslie J. Hughes

[email protected],[email protected],[email protected],[email protected],[email protected],[email protected],[email protected]

• Stephen Kirk Ingebretsen

[email protected],[email protected],[email protected],[email protected],[email protected]

• Geoffrey C. Jarvis


• Gregory J. Kerwin

[email protected],[email protected],[email protected],[email protected]

• Peter George Koclanes


• Allison Kaye Kostecka


• Meredith Leigh Lambert


• Charles Walter Lilley

[email protected]

• Joshua Angelo Materese


• Kim Elaine Miller


Page 1 of 2Case 1:12-cv-00292-RM-KMT Document 252 Filed 05/05/17 USDC Colorado of 5

• Matthew L. Mustokoff


• Jeffrey S. Nobel


• Sarah Emily Phillips


• Jamie Somoza Raghu

[email protected]

• Nicole Susan Schram


• Kevin S. Sciarani


• Trig Randall Smith


• Benjamin James Sweet

[email protected],[email protected],[email protected],[email protected],[email protected]

• The Allen Group

[email protected]

• United States Securities and Exchange Commission

[email protected]

• Jeffrey Mark Villanueva


• Daniel F. Wake


• Regis C. Worley , Jr

[email protected]

• Jonathan D.K. Youngwood

[email protected]

Manual Notice List

The following is the list of attorneys who are not on the list to receive e-mail notices for this case (who therefore require manual noticing).

You may wish to use your mouse to select and copy this list into your word processing program in order to create notices or labels for these

recipients.

• (No manual recipients)

Page 2 of 2Case 1:12-cv-00292-RM-KMT Document 252 Filed 05/05/17 USDC Colorado of 5

EXHIBIT 1

Case 1:12-cv-00292-RM-KMT Document 252-1 Filed 05/05/17 USDC Colorado Page 1 of 3

RECEIVEfl JA1 I 21ti5 UNITED LE

JAN1 9 2005 iN THE. UNITED STATES DISTRICT COURT

C. LANeHAM

pOR3HE DISTRICT OF COLORADO

Civil Action No, 00-K-1376 TConsolidated with Civil Action Nos. 00-K-1398, 00-K-1403, 00-K-1432, 00-K-1464, 00-K-1474, 00-K-1601, 00-K-1602, 00-K-1606 and 00-K-1661)

MICHAEL RASNER, On Behalf of Himself and All Others Similarly Situated,

Plaintiff, RECD JAN 2 0 2005

V.

FIRST WORLD COMMUNICATIONS, INC. (now known as VERADO HOLDINGS, INC.), DONALD STURM, SHELDON S. OHRINGER, PAUL C. ADAMS, JAMES 0. SPITZENBERGER, JOHN C. STISKA, MELANIE L. STURM, LEHMAN BROTHERS, INC., BEAR, STEARNS & CO. INC., DEUTSCHE BANK SECURITIES, INC. (dlb/a DEUTSCHE BANC ALEX. BROWN), and UBS FINANCIAL SERVICES (f/k/a PAINEWEBBER, INC.),

Defendants.

ORDER GRANTING APPLICATION BY PLAINTIFFS' COUNSEL FOR AN AWARD OF ATTORNEYS' FEES AND REIMBURSEMENT OF EXPENSES AND

APPLICATION FOR REPRESENTATIVE PLAINTIFF AWARDS PURSUANT TO 15 U.S.C. §77Z-1 (A) (4)

This matter having come before the Court upon (i) Plaintiffs' Counsel's Fee and Expense

Application and (ii) the Representative Plaintiffs' Applications pursuant to 15 U.S.C. §77z-

1(a)(4), and the Court, having considered the evidence, all papers filed and proceedings

conducted herein, having found the settlement of this action to be fair, reasonable and adequate,

and the Court having approved the settlement, and good cause appearing:


IT IS HEREBY ORDERED, ADJUDGED AND DECREED AS FOLLOWS:

1, Co-Lead Counsel are awarded (i) attorneys' fees in the amount of

[$8,555,250 requested], to be paid out of the settlement fund in the litigation (the "Settlement

Fund") and (ii) costs and expenses in the amount of $ Z ' 00, c)[$2,400,000 requested], to be

paid out of the Settlement Fund. The awarded attorneys' fees, costs and expenses shall earn

interest at the same rate as the Settlement Fund from the date that the Settlement Fund was

established until paid.

2. The awarded attorneys' fees, costs and expenses shall be allocated in a manner

which, in the good faith judgment of Co-Lead Counsel, reflects the contribution of counsel to the

prosecution and settlement of the litigation.

3. Lead Plaintiffs James Mount, Kung Hsu, Anosh Toufigh and Roohi Toufigh, and

class representative Phil Stori, are hereby each awarded the following amounts as

reimbursement for their time and expenses in prosecuting this litigation: James Mount . ) t

[$2,310 requested], Kung Hsu~ ç [$1,500 requested], Anosh Toufigh [$4,160

requested], Roohi Toufig1 f'1( [$4,160 requested] and Phil Storiti [$3,570

requested].

EOD UNITED STATES DISTRICT COURT

DENVER, CCtCRADC

JAN. t 1 1 2P

GREGORY C. LANGt HAM CLERK

BY THE COURT

I

ITED STATES SENIO DISTRICT COURT JUDGE

2


EXHIBIT 2


FILED 06,lcd SLi jas Clis # { "t UNITED STATES DISTRICT COURT" Denver, Coldradg

to 1STRICT OF COLORADO

Civil Action No. 95-K- t045 (D. Color '

.,WFS fI'tAt51}CFI Chi;"!

Class Action -~ --

ARTHUR M. SCHWARTZ and MARNETTE RITTER. on behalf of themselves and all others

similarly situated,

Plaintiffs,

V.

CELESTIAL SEASONINGS, INC., PAINE WEB 13 ER, INC,, SHEARSON/LEHMAN BROTHERS, INC,, MO SIEGEL, RONALD V. DAVIS, PHILIP B. LIVINGSTON, VESTARICELESTIAL INVESTMENT LIMITED PARTNERSHIP, JOHN D. HOWARD, JAMES P. KELLEY, ARTHUR J. NAGLE, DANIEL S. O'CONNELL, ROBERT L. ROSNER, and BARNET M. FEINBLUM,

Defendants,

FINALWUJ,DQRDEI

On Ianuary21, 2000, plaintiffs, acting on behalf of themselves and the class in the

above-captioned action, entered into a Stipulation and Agreement of Settlement (the "Settlement

Stipulation") in settlement of all claims in the. Action (the "Settlement") with defendants Celestial

Seasonings, Inc., PaineWebber, Inc., ShearsonJLehrnan Brothers, Inc., Mo Siegel, Ronald V. Davis,

Philip 13. Livingston, Vestar/Celestial Investment Limited Partnership, John D. Howard, James P.

Kelley, Arthur J. Nagle, Daniel S. O'Corutell, Robert L . Rosner and Barnet M. Feinblurn (colle-

ctively "(he defendants"), and thereafter applied to this Court for approval of the Settlement pursuant

to Rule 23(e) of the Federal Rules of Civil Procedure.


By Order dated January 26, 2000 (the "Notice Order"), this Courr, pursuant to Rule

23 of the Federal Rules of Civil Procedure, preliminarily approved the Settlement and scheduled a

Class Settlement blearing for April 25, 2000, at 9:00 a.m. to determine, among other things, whither

the proposed Settlement and compromise set forth in the Settlement Stipulation should be approved

by the Court as being fair, reasonable and adequate and whether final judgment should be entered

thereon, and to consider whether to approve the applications of All Class Counsel (as defined in the

Settlement Stipulation) for awards of attorneys' fees, reimbursement of costs and expenses and

awards to the named plaintiffs, This Court ordered that the Notice of Settlement, substantially in the

form attached to the Settlement Stipulation as Exhibit "f3," be mailed by first-class tn.ail, postage

prepaid, within ten days after the entry of the Notice Order, to each member of the Class who could

be identified, and that a Summary Notice, substantially in the form attached to the Settlement

Stipulation as Exhibit "C," be published in The Wall Street Journal and The Denver Post for one

weekday within twenty days after the entry of the Notice Order.

As attested by the affidavit of Valley Forge Administrative Scrvices filed with this

Court on or about April 19, 2000, the provisions of said Notice Order as to notice were complied

with, Moreover, the Class Settlement Hearing on the proposed Settlement was duly held before

this Court on April 25, 2000 at which time all interested persons were afforded the opportunity to

be heard. This Court has duly considered all of the submissions and arguments presented with

respect to the proposed Settletueat.

NOW THEREFORE, after due deliberation, this Court hereby FINDS,

CONCLUDES, ORDERS, ADJUDGES AND DECREES that:

2


1. This Final Judgment and Order (the "Judgment) is binding on all persons or

entities who purchased Celestial Seasonings, Inc. common stock during the period July 12, 1993

through and including May 18, 1994, excluding defendants, members of their immediate families,

their heirs, successors and assigns, any subsidiary or affiliate of any defendant and fxrzher excluding

all persons who timely filed a request to be excluded from the Class, pursuant to Rule 23(c)(2) of

the Federal Rules of Civil Procedure, who are not bound by any of the terms of this Judgment. A

list of those people or entities which excluded themselves from the Class is annexed hereto.

2. The proposed Settlement of the Action on the terms and conditions set forth

in the Settlement Stipulation is fair, reasonable and adequate, is in the best interests of the named

plaintiffs and the Class and is hereby approved in all respects.

3, The notification provided for and given to the Class constitutes the best notice

practicable under the circumstances and is in full compliance with the notice requirements of due

process and Rule 23 of the Federal Rules of Civil Procedure.

4. There is no just reason for delay in the entry of judgment as agreed upon in

the Settlement Stipulation, pursuant to Rule 54(b) of the Federal Rules of Civil Procedure.

5. Entry of final judgment and final approval of the proposed Settlement settles

all claims alleged in the Action between plaintiffs and the Class on the one hand and the defendants

on the other.

6. This Order and Final Judgment is filial for }imposes of appeal and may be

appealed notwithstanding other matters presently pending, andihe Clerk is hereby directed to enter

judgment thereon.

3


7. Certification under Rule 54(b) will not result in unrteressarf appellate review

nor will teview of the adjudicated claims moot any burgher developments in this Action Even if

subsequent appeals are filed, the nature of these claims are such that the appellate court would not

have to decide the same issues more than once. The reservation of jurisdiction by the Court in this

matter does not affect in anyway the finality of this Order and Final fudgrt-tent,

It is further ORDERED, ADTUUGID AND DECREE!) as follows:

1. The parties to the Settlement Stipulation shall consummate the Settlement in

accordance with the terms and provisions thereof.

2. This Action, including all claims alleged in this Action, is hereby dismissed

in its entirety, on the merits, with prejudice and without costs to any party.

3. The named plaintiffs and each member of the Class for good and sufficient

consideration, dismiss the Action, as against each of the defendants therein, with prejudice, on the

merits and without costs, and discharge and release all defendants, their present and former partners -,

principals, officers, directors, employees, assigns, agents, attorneys, insurers, co- insurers, and any

of their reinsurers, as well as the predecessors and successors, affiliates and subsidiaries of the

foregoing (collectively, the "Releasees"), from any and all claims, demands, causes of action,

obligations, controversies, debts, damages, losses and liabilities of any kind or nature whatsoever,

whether known or unknown, suspected or unsuspected that were or could have been asserted in the

Action, or which in any way related to the allegations set forth in the Action, or which arise out of

orb any way relate to the sale or purchase of Celestial securities during the Class Period approved

by the Court in the Action (collectively, the "Release. Claims'). "Unknown claims" means claims

that the Class Members do not know or suspect to exist in their favor at the tirrtc of giving the

4


fort going release which, if known by them, might have affected their decision as to the Settlement

and the release, as well as other possible action including, but not limited to, the decision not to

object to the Settlement. Plaintiffs expressly waive on behalf of themselves And the Class Members

any and all tights that they may have under any statute or cornumon-laaw principle that would limit the

effect of the foregoing releases to those claims actually known or suspected to exist at the time of

execution of this Stipulation, including„ but not limited to the provision of Section 1542 of the

California Civil Code, to the extent deemed applicable (notwithstanding that this Stipulation does

not provide for the application of California law), which provides as follows-

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

4. All members of the Class (including its, his, hers or their heirs, executors,

administrators, predecessors, successors, affiliates and assigns) are permanently barred and enjoined

from asserting, either individually or on behalf of a class, any and all Released Claims (as defined

above) against the Releasees (as defined above) or any of them.

5. The Releasees, and each of them, for good and sufficient consideration,

release, remise and forever discharge on the merits and. with prejudice, plaintiffs and their agents,

including their counsel and experts. of and from all claims whether known or unknown, under

federal or state law, that could have been or could be brought by the Releasees arising from the

filing, litigation or settlement of this action.

6. The Releasees are laerrttanently barred and enjoined from asserting any and

all claims referenced in the preceding par<ph.

0


7. This Judgnment. the Settlement Stipulation, and all papers related to it are not,

and shall not be construed to be, an admission by any of the defendants of any liability or

wrongdoing whatsoever, and shall not be offered as evidence of any such liability or wrongdoing in

this or any future proceeding.

8. All Class Counsel (as drained in the Settlement Stipulation) are hereby

awarded (i) 5 ` .% of the Settlement Fund, or S r i , iy , as their fee for services rendered to the

Class, Which sum the CottwT finds to be fair and reasonable; and (ii) Slit 1t` in reimbursement

of reasonable expenses. Such award (br fees and expenses shall be paid to All C_Iass Counsel from

the Settlement Fund, along with a.Iartm Tara share of the interest earned on the Settlement Fund from

the date the Settlement Fund was created until the date said attorneys` fees and expenses are paid.

The award of attorneys' fees shall be allocated among All Class Counsel in a fashion which, in the

opinion of Class Counsel (as defined in the Settlement Stipulation) fairly compensates such counsel

for their respective contributions in the prosecution in the prosecution of the litigation.

9. In recognition of their contributions to the litigation and the creation of the

Settlement Fund, the t 'o named plaintiffs. Arthur Schwartz acid Marnette Ritter, are er r 2warded / a is m, J

,.L~

an enhancement award of S_ . This award shall We in addition to the named plaintiffs' pa

portion of the settlement fund, as defined in ¶23 of the Settlement Agreement.

10. Without affecting the finality of the Judgment, the Court reserves jurisdiction

over: (a) implementation of the Settlement and any award or distribution of the Settlement Fund (as

defined in time Settlement Stipulation) including interest earned/ accrued thereon; (b) disposition of

the Settlement Fund; (c) determining applications for awards of attorneys' fees, reimbursement of

costs and expenses (including fees, costs and expenses of consultants incurred during the

6


administration of the Seulernent) in the Action and any interest thereon and an award to the

pla.inttff ; (d) disposition of any residual proceeds remaining in the Settlement Fund, after the

payment of approved claims and any monies awarded pursuant t0 subparagraph (c) above, pursuant

to Court approval and in accordance with the cypres doctrine; (e) enforcing and administering the

Settlement Stipulation; and (t} other matters related or ancillary to the foregoing.

APPROVED AND SO ORDERED ,

T.lawd: Y-116M, 2000 ie Honorable John CKane, Jr. .S. Senior District Court Judge

OD U?41 }STATES{ TRICT COL :ni

DENVER, t f!t CPADO

JAMES R. AANSP eKEri

11

'7


EXHIBIT 3


.. .. I.,

JNflED SrATft DIM= eo(J5T tENWR. ceto,

IN TRZ UNITED STATES DISTRICT COURT FOR TEM DISTRICT OF COLORADO

JAMES A. MANSPEAKER

Case No. 97-WY-1431-C .CLERK

QUEEN UNO LTD. PARTNERSHIP, DOUGLAS GIEDT, and SILVIEW INVESTMENTS LIMITED, on behalf of themselves and on behalf of all others,

?laintifEs,

COEUR D'ALENE MINES CORPORATION, DENNIS E, WHEELER and JAMES A. SABALA,

Defendants.

ORDER ON PLAINTIFFS' CLASS COUNSEL'S 14OTIO FOR ATTORNEYS' FEES AND REIMBMSEMENT Or EXPENSES

On July 15, 1999, this Court approved the settlement in this

case and entered its final judgment and dismissal of the action.

Notably, there were no objecters at the fairness hearing.

Plaintiffs' class counsel has now moved for an award of

attorneys' fees and reimbursement of expenses. Having heard oral

argument and being fully advised of the premises, the Court FINDS

and ORDERS as follows:

Background

This Court provided a more detailed history of this action

in its prior orders. See Queen

j2eneines Co„rn, 183 F.R.D. 687 (D. Colo. 1998); QJLa

PaEt p u'enQMinesCoro., 2 F. Supp. 2d 334

(D. Col o . 1998). Those facts surrounding the underlying dispute


are hereby incorporated by reference.

The parties have now reached a settlement in this action

that has been approved by the Court. The Settlement consists of

two components: (1) a cash payment of $7 million to the

Settlement Class, and (2) 50% of the net recovery obtained by

Coeur d'Alene Mines Corp., Callahan Mining Corp., and Coeur New

Zealand, Inc. up to a cap of $6 million, in the case entitled

uAiene Mii Corp. v, Cvorus Minxals Co., Case No.

CV-96-3911 in the State of Idaho.

In their application, Plaintiffs' Class Counsel makes two

requests. First, counsel seeks a fee award of 30% of the common

fund as that fund is received. Thus, since only the first

portion of the settlement, $7 million, has been received to date,

Class Counsel would presently be paid 30% of $7 million, and if

the remaining portion is received in the future, counsel would be

paid 30% of any amount received at such time. Second, Class

Counsel seek the reimbursement of expenses advanced on behalf of

the class in the amount of $557,271.00.

Discuss,ion

A. Attorneys' Fees

The settlement in this case created a "common fund" from

which the plaintiff class obtained a benefit. (P.) litigant or

lawyer who recovers a common fund for the benefit of persons

other than himself or his client is entitled to a reasonable


attorneys' fee from the fund as a whole."

Gemert, 444 U.S. 472, 478 (1980); mv

Co.., 828 F.2d 451, 454 (10th Cir. 1988).

contributed to the creation of the common

entitled to a reasonable fee therefrom.

When attorneys make a claim for fees

gQva n.

Rhil.l.ins 2.9- o1eum

Thus, the attorneys who

fund in this case are

from a common fund,

their interest is "adverse to the interest of the class in

obtaining recovery because the fees come out of the common fund

set up for the benefit for the class." Rawling s i. 9rudential-

çhexcperties1 Inc., 9 F.3d 513, 516 (6th Cir. 1993) This

divergence of interests requires the Court to assume a fiduciary

role when determining the amount of attorneys' fees to which

Class Counsel is entitled. See

jpTbjtj, 1 F. Supp. 2d 1407, 1409 (D.

Wyo. 199) (hereinafter Copley); see also Brown, 838 F. 2d at 456

(quoting Report., of the Third Circuit Task Force, Court Awarded

Atto rne 108 E.R.D. 237, 251. (1985)).

In the Tenth Circuit, there is a preference for awarding

attorneys' fees based upon the percentage at the fund method.

See .pgnbaum v. MacAllister, 64 F.3d 1439, 1435 (10th Cir.

1995); I F. Supp. 2d at 1410. The first step in a

percentage of the fund analysis is a determination of the fund.

This matter has been settled by the explicit terms of the

-Settlement Agreement. This amount as discussed, is $7 million

3


now plus whatever is gained in the Cyprus Amax case.

The second step in a percentage of the fund analysis is an

initial determination of the appropriate percentage to award.

The standard contingency fee arrangement in individual actions is

3%. In common fund cases, fees generally range from 20-30%.

Cam en Co iji,m 1ss'nf Inc. v. Dunkle, 946 F.2d 768, 774

(11th Cir. 1991). However, it appears that in Tenth Circuit

securities class actions that result in common fund recoveries,

fees average 30%. See 1 i.j re Ein .t q

Litict,, No. 97-N-1614 (D. Colo. June 4, 1999); In to Corat

gjIhcgre Corp. $ec. Liti.a, No. 95-N.2074 (D. Colo. Jan. 24,

1997); Ster l ing v No. 91-N-2261 (D. Colo.

June 17, 1993)

Having established an initial indication of 30%, resulting

in an award of $2,100,000 plus 30% of whatever is recovered in

Cyprus L*qax case, the Court must now determine whether this award

is reasonable. aq,% 3rown, 838 F.2d at 454. In ErQwri, the Tenth

Circuit adopted the factors set out by the Fifth Circuit in

Johnson v. ceorqia Highy Exprs 488 F.2d 714, 71719

(5th Cir. 1974), to aid courts in this reasonableness

determination. The Johnsen factors are:

(1) the time and labor involved; (2) the novelty and difficulty of the questions; (3) the skill requisite to perform the legal service properly; (4) the preclusion of other employment by the attorney due to acceptance of the case; (5) the customary fee; (6) any prearranged fee--this is helpful but not

4


determinative; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (10) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Id. at 717-19. The weight of these factors will be different in

common fund cases and rarely will all of these factors be

applicable. See Brown, 838 F.2d at 456.

Considering the first, J,ohnson factor, time and labor

involved, class counsel expended 4,250.70 hours in this case.

Indeed, Class Counsel expended significant time before the case

was even filed. Prior to the case's filing, Class Counsel

consulted with experts in mining, accounting, and damage fields

to ensure the existence of viable claims. In preparation for

filing this case on July . 2 1997, class counsel drafted a highly

complicated Complaint to comply with the newly enacted Private

Securities Litigation Reform Act ("PSLRA"). In discovery, Class

Counsel reviewed well over 220,000 documents produced by

Defendants. Class Counsel defended Plaintiffs' depositions and

prevailed on a class certification after a contested hearing.

Class counsel survived a highly contested motion to dismiss.

Counsel also traveled to New Zealand and Australia to interview

third-party witnesses. Moreover, Class Counsel were prepared for

a trial that was to begin this summer. Finally, at an average of

$300.44 cents an hour, Class Counsel's requested fee as a

5


multiplier of lodestar is only 1.64 (when considering only the $7

million). This amount is not excessive, but in fact is

reasonable.

The novelty and difficulty of questions involved weigh

heavily in favor of a 30% award. This was one of the first cases

filed under the PSLRA. As a result, Class Counsel confronted

numerous issues of first impression in this Circuit. This case

also involved numerous complex issues of law and fact that had to

be resolved.

The requisite skill and experience, reputation, and ability

of the attorneys also weigh in, favor of a 30% award. To

successfully prosecute this class action, Class Counsel had to be

highly skilled in class action litigation and federal securities

law. Plaintiffs' counsel put together a team that possessed this

expertise. The substantial amount recovered is a testament to

their skill. Class Counsel are all well respected litigators in

the securities field that have had extensive experience in class

action litigation. Accordingly, this factor also weighs in favor

of a 30% award.

Preclusion of other employment also weighs in favor of 'a

sizable award for Class Counsel. This case was put on an

expedited trial schedule. Class Counsel were ready for trial in

this complex case in less than two years. By their own

testament, they were deprived of hourly work while working on


this contingent fee case. This factor also weighs in favor of a

30% award.

The customary fee for similar work, and awards in similar

cases, also weighs in favor of a 30% award. As discussed

earlier, in complex securities law class actions in this Circuit,

a 30% fee is common.

Time limitations, as previously discussed, also weigh in

favor of a sizable award because of the expedited schedule

imposed by this Court.

The most important factor in a common fund case, the amount

involved and the results obtained also supports a 30% award.

Brown, 838 F.2d at 456. An award of $7 million, when considered

in the context of a defendant company whose financial future is

less than certain, is very adequate given the facts of this case.

Moreover, the contingent award in the Cyorus Amax case enhances

the potential recovery for class plaintiffs. Given the totality

of circumstances, the settlement obtained by Class Counsel was

very adequate and is a testament to their abilities.

Given all of these factors, the Court finds that a 30% fee

award is both fair and reasonable. It is thus hereby OBERD

that Plaintiff's Class Counsel application for a 30% fee award is

GRANTED. Class Counsel shall immediately be a'zarded 30% of the

$7 million cash award and shall be awarded 30% of any future

award received in the çJj litigation.

7


B. Reimbursement of Expenses

Plaintiffs' Class Counsel also seek reimbursement of

expenses in the amount of $557,271.00. Expenses that are

advanced on behalf of the class may be reimbursed if they are of

the type usually billed by attorneys to paying clients in the

marketplace. tcher v.ray-DovleIndep1 Sch. Dist. Na

8 F.3d 722, 725-26 (10th Cir. 1993) . Plaintiffs' Class

Counsel's expenses fall within the parameters of those that were

reasonable and necessary in prosecuting this case.

Therefore, it is ORDERED that Plaintiffs' Class Counsel's

motion for reimbursement of expenses is GRMTED.

Cono1uipi

For the reasons stated above, Plaintiffs' Class Counsel's

motion for attorneys' fees and reimbursement of expenses is

GRANE1. Plaintiffs' Class Counsel shall be awarded 30% of the

S7 million cash award now and shall be awarded 30% of any future

award obtained in the Cyorus Amax litigation. Further,

Plaintiffs' Class Counsel shall be immediately reimbursed

$557,271.00 for expenses advanced on behalf of the plaintiff

class. IL

Dated this J day of August 1999.

CL ENCE A. BRIMMER, UNITED STATES DISTRICT JUDGE

ri


EXHIBIT 4


IILEO UNITED STATES Of6TRICT COURT.

DENVER. COLORADO

JUN 041999 N THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLORADO JAMES R. MAPJSPEAKER CLERK

Civil Action No. 97-N-1614 (Consolidated with cases 97-N-1712; 97-N-1713; 97-N-1823; 97-N-1877; 97-N-1894 and 97-N-2318)

In re EINSTEIN NOAH BAGEL CORP. SECURITIES LITIGATION

t-.ti. O&DDJ FINAL JUDGMENT AND ORDER OF DISMISSAL WITH PREJUDICE OF ALL CLAIMS

AGAINST DEFENDANT EINSTEIN/NOAH BAGEL CORP. AND THE INDIVIDUAL DEFENDANTS

The Plaintiffs, the "Settling Defendants" and the Insurers, (as those terms are defined in

the Stipulation of Settlement dated as of February 11, 1999) (the "Stipulation"), by and through

their attorneys or their counsel of record, having executed and filed the Stipulation; the Court

having entered its Order thereon dated March 18, 1999, directing that notice of the proposed

Settlement` of all claims against the Settling Defendants be mailed to the Class and scheduling a

hearing to be held to determine, among other things whether: (i) the proposed Settlement should

be approved as fair, reasonable and adequate; and (ii) the application of Plaintiffs' Counsel for

the payment of attorneys' fees and expenses and expense awards to Plaintiffs is reasonable and

should be approved; said notice having been given; hearings having been held on June I and

June 4, 1999 at which all interested persons were given an opportunity to be heard; and the Court

'All capitalized terms have the meaning or definition set forth in the Stipulation.

-1- 1279.100021 BSC.DOC


having read and considered all submissions in connection with the proposed Settlement, and

having reviewed and considered the files and records herein, the Court finds and concludes as

follows.

This litigation began in July 1997. A total of seven class-action complaints have been

filed in the District of Colorado:

Ron Benit, Simi Weiss, and Thomas Griner v. Einstein Noah Bagel Corp., Mark R. Goldston, Eric Carlborg, and Scott A. Beck, Civil Action No. 97-N-1614;

Jerry Meduri v. Einstein Noah Bagel Corp., Mark R. Goldston, Eric Carlborg, and Scott A. Beck, Civil Action No. 97 -N-1712;

Gary Drake v. Einstein Noah Bagel Corp., Mark R. Goldston, Eric Carlborg, and Scott A. Beck, Civil Action No. 97-N- 1713;

Eisenfeld v. Einstein Noah Bagel Corp., Civil Action No. 97-N-1823;

Snydman v. Einstein Noah Bagel Corp., Civil Action No. 97-N-1877;

Naish v. Einstein Noah Bagel Corp., Civil Action No. 97-N-1894; and

Montoya, et al. v. Einstein Noah Bagel, et al., Civil Action No. 97-N-2318.

All of the foregoing have been consolidated as In re Einstein Noah Bagel Corp. Securities

Litigation, Civil Action No. 97-N-1614. In addition, a purported class-action complaint has been

filed in Colorado state court, Gary Drake v. Einstein/Noah Bagel Corp. et al.; Case No.

97-CV-2697, Division 5, Jefferson County District Court, State of Colorado (the "State Court

Action"). The State-Court Action was stayed pending resolution of the consolidated federal

action. These actions are collectively referred to herein as the "Litigation The lead plaintiffs in

the consolidated action are Ron Benit, Andy Tress, Simi Weiss, Thomas Griner, Jerry Meduri,

Gary Drake, the David S. Gilfand, Ltd. Profit Sharing Plan, Consolidated Funding Corp., Joann

Stack-Dean, Susan Anderson, Susan Ness, John Hriljac, Phillip Cohen and Elaine B. Snydman

(collectively, "Plaintiffs").

The defendants in the Litigation are Einstein/Noah Bagel Corp. ("Einstein"); Mark R.

Goldston ("Goldston"), W. Eric Carlborg ("Carlborg"), Scott A. Beck ("Beck"), and Theodore P.

-2- 1279.10 0027 BSC DOC


Heininger) ("Heininger") (collectively the "Individual Defendants"); Arthur Andersen, LLP

("Arthur Andersen"); Alex Brown & Sons, Inc. ("Alex Brown"); MerriIl Lynch & Co. (",Merrill

Lynch"); and Montgomery Securities, Inc. ("Montgomery"). The claims against Arthur

Andersen,,Alex Brown, Merrill Lynch and Montgomery are not covered by this Stipulation.

Einstein and the Individual Defendants collectively are termed "Settling Defendants." All

defendants in the action, including the Settling Defendants, are collectively termed "defendants."

On December 8, 1997, the Plaintiffs filed their Consolidated and Amended Class Action

Complaint (the "Consolidated Complaint"). The Consolidated Complaint alleged claims for

violations of Sections 11, 12(2), and 15 of the Securities Act of 1933 (the "Securities Act") (15

U.S.C. § § 77k, 771 & 77o), and Sections 10(b) and 20(a) of the Securities Exchange Act of 1934

(the "Exchange Act") (15 U.S.C. § 78j & 78t), Rule 1Ob-5 promulgated under Section 10(b) by

the Securities and Exchange Commission ("SEC") (17 C.F.R. § 240.1 Ob-5), and claims under the

Colorado Securities Act (C.R.S. §§ 11-51-101 etseq.).

In the Preliminary Approval Order dated March 18, 1999 ("Preliminary Approval

Order"), the Court approved the Plaintiffs as representatives of the CIass and conditionally

certified, for purposes of the Settlement, a CIass comprised of

All persons who purchased or otherwise acquired the equity securities of Einstein/Noah Bagel Corp. during the period August 2, 1996 through and including October 29, 1997 (the "Class Period"), and who suffered harm thereby, but excluding defendants Arthur Andersen, Alex Brown, Merrill Lynch and Montgomery and any of their officers or directors during the Class Period; Einstein and any subsidiaries or affiliates of Einstein; Boston Chicken, Inc. and any subsidiaries or affiliates of Boston Chicken, Inc.; officers and directors of Einstein during the Class Period; the Individual Defendants and members of their immediate families; any person, firm, trust, corporation, officer, director or any individual in which any defendant has a controlling interest or which is affiliated with, any of the defendants; and the legal agents, affiliates, heirs, successors -in-interest or assigns of any such excluded party.

-3- 1239.1000:1 asC.DOC


This definition of the Class applies for purposes of the Settlement and this Final Judgment and

Order of Dismissal with Prejudice of All Claims against Defendant Einstein and the Individual

Defendants (the "Final Judgment").

The Stipulation between and among the Plaintiffs and Settling Defendants provides for

the Settlement of the Litigation on behalf of the Plaintiffs and all Class Members with the

Settling Defendants subject to approval by this Court of its terms and to the entry of this Final

Judgment. The Court scheduled a hearing to consider the approval of the Stipulation and

directed that notice of the proposed Settlement and hearing be mailed to all members of the

Class.

In accordance with the Stipulation and the Preliminary Approval Order, counsel for

Plaintiffs and the Class ("Class Counsel") 2 caused to be mailed to the Class, a notice (the

"Notice") and caused to be published in the national edition of THE WALL STREET JOURNAL and

THE DENVER POST, a summary notice (the "Summary Notice") of the proposed Settlement of all

claims against the Settling Parties and of the opportunity to object to the Settlement. Affidavits

and/or declarations of mailing of the Notice and publication of the Summary Notice were filed

with the Court on May 26, 1999.

The Notice and Summary Notice provided to potential members of the Class constitute

the best and most practicable notice under the circumstances and include individual notice to all

members of the Class who could be identified by reasonable effort. The affidavits or

declarations of mailing filed with this Court demonstrate compliance with this Court's orders

with respect to the Notice and Summary Notice and, further, that the best and most practicable

notice under the circumstances was in fact given and constituted valid, due, and sufficient notice

2 Class Counsel consists of the following law firms: Hagens Berman, P.S., which served as lead counsel, and Dyer Donnelly; Kaufman Malchman Kirby & Squire; Berger & Montague, P.C.; Milberg Weiss Bershad Hynes & Lerach, LLP; Cohen, Milstein, Hausfeld & Toll; Bader Villanueva & Feder, P.C.; Law Offices of Bernard M. Gross, P.C.; Abbey, Gardy & Squitieri, LLP; Schiffrin & Craig, Ltd.; Wolf Haldenstein Adler Freeman & Herz, LLP; Much Shelist Freed Denenberg Ament Bell & Rubenstein, P.C.; Finkelstein & Associates; and Wolf & Slatkin.

-4- 1239.10 0027 BSC.DOC


to members of the Class, complying fully with due process and Rule 23 of the Federal Rules of

Civil Procedure and any other applicable law.

Plaintiffs and the Settling Defendants have applied to the Court for approval of the terms

of the Stipulation and for the entry of this Final Judgment. Pursuant to the Notice and Summary

Notice, and upon notice to all parties, hearings were held before this Court on June 1 and June 4,

1999, to consider, among other things, whether the Settlement set forth in the Stipulation should

be approved by this Court as fair, reasonable, and adequate and whether the application of Class

Counsel for the payment of attorneys' fees and expenses and expense awards to Plaintiffs is

reasonable and should be approved by this Court.

The Stipulation is the product of good-faith arm's length negotiations by the Parties

thereto, each of whom was represented by experienced counsel. Approval of the Stipulation will

result in substantial savings in time and money to the Court and the litigants and will further the

interests ofjustice.

NOW THEREFORE, GOOD CAUSE APPEARING, IT IS HEREBY ORDERED,

ADJUDGED, AND DECREED THAT:

1. The Court has jurisdiction over the subject matter of this Litigation and all Parties

in this Litigation, including all Class Members.

2. No Class member objected to the Settlement. Only one Class Member, Donald J.

Bingle, has filed a timely and valid request for exclusion. Mr. Bingle is therefore not bound by

this Final Judgment. All other Class Members who purchased Einstein common stock during the

period from August 2, 1996 through and including October 29, 1997 are bound by this Final

Judgment and by the Settlement, including the releases provided for in this Final Judgment.

3. The Stipulation and Settlement are not an admission by the Settling Defendants,

and this Final Judgment is not a finding of the validity of any claims in the Litigation or of any

wrongdoing by the Settling Defendants. Furthermore, neither the Stipulation nor the Settlement

is a concession by any Settling Defendant, and neither shall be used as an admission of any fault

-5- 1239.10 0027 SSC.DOC


or omission by any person. Neither this Final Judgment, the Stipulation nor any document

referred to herein nor any action taken to carry out this Stipulation, is, may be construed as, or

may be used as an admission by or against the Settling Defendants of any fault, wrongdoing or

liability whatsoever. Entering into or carrying out the Stipulation, and the Exhibits thereto, and

any negotiations or proceedings related thereto shall not in any event be construed as, or deemed

to be evidence of, an admission or concession with regard to the denials or defenses by any of the

Settling Defendants and shall not be offered or received in evidence in any action or proceeding

against any party hereto in any court, administrative agency or other tribunal for any purpose

whatsoever, other than to enforce the provisions of this Final Judgment, the Stipulation, or the

provisions of this Final Judgment or any related agreement or release; except that the Stipulation

and the Exhibits may be filed in this Litigation or related litigation as evidence of the Settlement

or in any subsequent action against or by the Settling Defendants to support a defense of res

judicata, collateral estoppel, release, or other theory of issue preclusion or similar defense.

4. The Stipulation and Settlement are fair,. reasonable and adequate as to the Class,

and the Stipulation and Settlement are hereby finally approved in all respects, and the Parties to

the Stipulation are hereby directed to consummate and perform its terms.

5. This Litigation is dismissed on the merits, with prejudice, as to the Settling

Defendants and without costs to any Party as against any other, and all Class Members (except

Donald J. Bingle) are forever barred from commencing or prosecuting, either directly,

derivatively, in a representative capacity, or in any other capacity, a class action or any other

action against the Released Parties' with respect to, based on, arising from, or for any and all

'The Released Parties, as defined in the Stipulation, are the Settling Defendants and the Insurers, and all of their respective predecessors, successors and present, former and future officers, directors, employees, agents, attorneys, stockholders, investors, insurers, reinsurers, underwriters, investment bankers, advisors, affiliates, associates (as defined in SEC Rule 12b-2 promulgated pursuant to the Exchange Act), present, former or future parents, subsidiaries, or affiliates, and each of their assigns, representatives, heirs, executors and administrators. "Released Parties" excludes Arthur Andersen, Alex Brown, Merrill Lynch and Montgomery and all of their respective predecessors, successors and present, former and future officers, directors, employees, agents, attorneys, stockholders, investors, insurers, reinsurers, underwriters, investment bankers, advisors, affiliates, associates (as defined in SEC Rule 12b-2 promulgated pursuant to the Exchange Act), present, former or future parents, subsidiaries, or affiliates, and each of their assigns, representatives, heirs, executors and administrators.

ME 1:19.100021 SSC.DOC


Settled Claims, including Unknown Claims, demands, rights, liabilities and causes of action of

every nature and description whatsoever, known or unknown, asserted or that might have been

asserted, including, but not limited to, claims for negligence, gross negligence, breach of duty of

care and/or breach of duty of loyalty, breach of duty of candor, fraud, negligent

misrepresentation, breach of fiduciary duty or violations of any state or federal statutes, rules or

regulations by any Released Party arising out of, relating to, or in connection with purchases or

sales of Einstein common stock during the Class Period and arising out of or related to any of the

acts, omissions, misrepresentations, facts, events, matters, transactions or occurrences referred to,

or that could have been referred to, in any of the complaints or other pleadings filed in the

Litigation or otherwise alleged, asserted or contended in the Litigation based upon the facts

alleged in any of the complaints.

6. On the Effective Date, as defined in the Stipulation, each member of the Class

(except Donald J. Bingle) shall be deemed conclusively to have released the Settled Claims,

including Unknown Claims, against the Released Parties. Notwithstanding that the Plaintiffs

and/or Class Members may hereafter discover facts in addition to, or different from, those that

the Plaintiffs or Class Members now know or believe to be true with respect to the Litigation and

the Settled Claims, including Unknown Claims, or to the subject matter of the Release, each such

Plaintiff and Class Member shall be deemed, upon the Effective Date, fully, finally and forever

to settle and release any and all Settled Claims, including Unknown Claims, against the Settling

Defendants and the Released Parties, including all claims known or unknown, suspected or

unsuspected, contingent or non-contingent, that now exist, may hereafter exist, or heretofore

have existed, and without regard to the subsequent discovery or existence of such different or

additional facts. In giving such releases, all Class Members and Plaintiffs are deemed to have

waived any and all rights that they may have under any statute or common-law principle that

would limit the effect of the foregoing releases to those claims actually known or suspected to

-7- 1239.100027 BSC.DOC


exist at the time of execution of this Settlement Stipulation, including the provisions of Section

1542 of the California Civil Code, to the extent deemed applicable, which provides as follows:

§ 1542. General release; extent

A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.

7. From and after the Effective Date, each Class Member (except Donald J. Bingle)

individually, completely, voluntarily, knowingly, unconditionally and forever releases, remises,

acquits and discharges Plaintiffs and Class Counsel from every and all asserted or potential,

separate, joint, individual claim, class claim, or other claims, actions, rights, causes of action,

demands, liabilities, losses and damages of every kind and nature, anticipated or unanticipated,

direct or indirect, fixed or contingent, known or unknown, under federal, state or common law or

any other law or regulation, or at equity, against Plaintiffs and Class Counsel or any of them, that

are based upon, or arise out of, the institution, prosecution, assertion or resolution of the

Litigation against the Settling Defendants or the Settled Claims, including Unknown Claims.

8. The Settling Defendants shall be deemed conclusively to have released the

Plaintiffs and Class Counsel from those claims or potential claims against Plaintiffs and Class

Counsel that are based upon, or arise out of, the institution, assertion, prosecution or resolution of

this Litigation, or the Settled Claims, including Unknown Claims, except that nothing herein

releases any claim arising out of a violation of the Stipulation or a violation by Plaintiffs or Class

Counsel of the Confidentiality Orders in place in the Litigation.

9. Each member of the Class who did not timely and validly request exclusion is

barred and permanently enjoined from commencing and prosecuting, either directly, derivatively,

in a representative capacity, or in any other capacity, against the Settling Defendants and the

Released Parties, any and all of the Settled Claims, including Unknown Claims.

_g_ t 2". to 0021 BSC.DOC


10. If the Settlement is disapproved, canceled or terminated at any time in accordance

with the terms of the Stipulation, then this Order and the Stipulation shall have no force or effect,

and all negotiations, proceedings and statements made in connection therewith shall be without

prejudice to the right of any Persons, and the Parties to the Litigation shall be restored to their

respective positions existing as of November 23, 1998; provided however, that the Notice and

Administration Expenses incurred but not yet paid shall be paid out of the Notice and

Administration Fund as provided in the Stipulation at ¶ VII(F); and provided further that the

Stipulation provisions at IN VII(F), VII(J) shall continue to apply. The Settling Parties remain

subject to the jurisdiction of this Court for purposes of enforcing the provisions of this paragraph.

11. (a) All persons or entities, including without limitation Arthur Andersen, Alex

Brown, Merrill Lynch and Montgomery, either directly, representatively, or in any other

capacity, are hereby barred and permanently enjoined, either directly, representatively, or in any

other capacity, from instituting or prosecuting or continuing to prosecute, any action, claim or

claim-over against any Released Party on whatsoever theory (whether by way of third- or

subsequent-party complaint, cross-claim, separate action or otherwise, and whether under federal

or state law) to recover in whole or in part any liability, direct or indirect, of such Person to any

Member of the Class in connection with, arising out of, or that is in any way related to, the

-Settled Claims, including Unknown Claims, except nothing herein shall operate to bar Alex

Brown, Merrill Lynch, Montgomery or Einstein's right to indemnification, if any, pursuant to

any underwriting Agreements entered into among them;

(b) Any and all claims or claims-over asserted or deemed asserted by any

Persons, including without limitation Arthur Andersen, Alex Brown, Merrill Lynch and

Montgomery, against any Released Party on whatsoever theory (whether by way of third- or

subsequent-party complaint, cross-claim, separate action or otherwise, and whether under federal

or state law) to recover in whole or in part any liability, direct or indirect, of such Person to any

Member of the Class in connection with, arising out of, or which is in any way related to, the

-9- 1:39.1000:7 asC.DOc


Settled Claims, including Unknown Claims, are hereby dismissed with prejudice and without

costs to any Party, except nothing herein shall operate to dismiss Alex Brown, Merrill Lynch,

Montgomery or Einstein's right to indemnification, if any, pursuant to any underwriting

agreements entered into among them; and

(c) Any judgment by Plaintiffs or other Members of the Class as against any

Persons, including without limitation Arthur Andersen, Alex Brown, Merrill Lynch and

Montgomery, on a claim with respect to which such Person would have (but for the contribution

bar ordered in 111 (a)-(b) above) a legally valid and enforceable right to contribution from any

Released Party and that is in connection with, arising out of, or in any way related to, Settled

CIaims, including Unknown Claims, shall be reduced in accordance with the Private Securities

Litigation Reform Act and the Order Approving Stipulation entered by the Court on June 4,

1999.

12. It is further ordered that any claims or claims-over that have been, or may in the

future be, asserted in this or any other action against any Released Party shall (if allowed) be

served and stayed for separate trial after the trial of Plaintiffs' and the Class' claims against such

nonsettling defendant.

13. The Court finds and determines that, by reason of the Parties' Settlement, there is

no just reason for delay in finds expressly that this Final Judgment is a final judgment upon

fewer than all the claims or parties pursuant to Fed. R. Civ. Pro. 54(b);

14. Mr. Bingle may pursue his own individual remedies, if any.

15. The law firms representing Plaintiffs and the Class are hereby awarded, from the

Settlement Fund, attorneys' fees in the amount of $ 2, S5'O, 00 0 , representing

JtU1percent of the Settlement Fund, and accrued interest, and the reimbursement of their

expenses in the amount of S 107 I a 9.5 3 . Both amounts shall be paid at the time

indicated in the Stipulation. Lead Class Counsel, Hagens Berman P.S., is ordered to distribute

the fees in their discretion to all Class Counsel in accordance with each firm's respective

-10- 1239.10 00:7 BSC.DOC


contribution to the results obtained for the Class. In the event the Settlement is cancelled or

terminated, Class Counsel shall, within ten days of notice of termination or cancellation, refund

any and all Attorneys' Fees and Expenses distributed to them from the Settlement Fund, together

with accrued interest, in accordance with the Stipulation. Each of Class counsel who receive fees

from the Settlement Fund, their partners, and/or shareholders remain subject to the jurisdiction of

this Court for purposes of enforcing the provisions of this paragraph.

16. The Court reserves jurisdiction, without affecting the finality of this Final

Judgment, over: (i) implementation of this Settlement and any award or distribution of the

Settlement Fund, including interest earned thereon; (ii) disposition of the Net Settlement Fund;

(iii) enforcing and administering the Stipulation including any releases executed in connection

therewith; (iv) other matters related or ancillary to the foregoing, and (v) the continuing Iitigation

of claims against Arthur Andersen, Alex Brown, Merrill Lynch and Montgomery.

aI

Date:c 1 ( _________________________ Nottingham Nottingham

ted States District Ju ..

-11- 1239.10 0027 BSC.DOC


EXHIBIT 5


rfl..L'

IN THE UNITED STATES DISTRICT C o~c ►

FOR THE DISTRICT OF COLORADO t~1~11~A1i

MAR 4 1991 Civil Action No, 95.D -11 68

AMES R. MANSPEArtt

In Re: INTELCOM GROUP, INC. SECURITIES LITIGATION CLlrr

ORDER

ORDER ENTERED BY MAGISTRATE JUDGE O. EDWARD SCHLATTER Shawn Schroeder, Secretary

District Judge Wiley Y. Daniel has by Special Order of Reference directed that

I act as a Special Master in this case for the purpose of determining whether counsel

for plaintiffs (counsel) are entitled to their attorney s fees, and, if so, whether the fee

which has been requested is reasonable. Judge Daniel has stated that I "may conduct

a hearing, take evidence, and/car make such factual and legal findings" as are deemed

necessary to dispose of the request for fees.

I find that a hearing on the request for fees is not necessary. First, I acted as

a mediator during the several settlement conferences which were conducted, and I

became closely familiar with the facts and legal issues which are presented by this

litigation. Second, counsel have sent notices to all members of the class in this case,

and have informed them that a request would be made for 1/3 of the proceeds of the

settlement. No member of the class has lodged any objection to the fee which would

be requested , and the time for filing objections has passed. Third, no objection has

been forwarded by anyone on behalf of the defendant, Intelcom Group. Thus, all

appropriate persons have been notified of the fee which counsel has requested, and


no one has objected.

Counsel for plaintiffs obtained a settlement for the class of $2,500,000. It is .

not disputed that they are entitled to an award of fees and costs.

I am generally familiar with this litigation, and with the efforts which were

expended by both sides in the prosecution and defense of the various claims. I have

also examined the affidavits which were submitted by counsel as exhibits to the Joint

Petition of Plaintiffs' Counsel for an Award of Attorneys' Fees and Reimbursement of

Litigation Costs and Expenses. Having examined those materials, I find no reason to

doubt that counsel actually contributed the numbers of hours of work which are ,

recited in the respective affidavits, and Incurred the expenses which are listed.

Plaintiffs were persons who had purchased stock in Intelcom during the

specified class period. Plaintiffs claimed that defendants had issued materially false

and misleading statements in press releases, public reports, and in filings with the

Securities and Exchange Commission. As such, plaintiffs asserted that defendants had

caused plaintiffs to purchase stocks through the release of false information, thereby

resulting in loss to the plaintiffs. Defendants denied the allegations which were made,

and a great deal of discovery was conducted by both sides during the litigation.

I find that this was a difficult and complex case for any lawyer to undertake,

and I find that the undertaking was fraught with a high degree of risk. In light of the

complexity and risk, I find that the recovery of $2,500,000 on behalf of the class

plaintiffs was a satisfactory result.

2


.;&- f 4 W4 - Lt4•v.1 • w -.. -. - .....• ..... r.. .

Counsel are requesting that I award as fees the sum of $833,333.33, which is

113 of the sum which was obtained in settlement of the claims. In considering an

award of fees, I may enter an award based either upon a percentage basis, or upon a

lodestar finding which is calculated by multiplying the number of hours worked against

a reasonable hourly rate. Gottlieb v. Barry. 43 F.3d 474, 483 110th Cir. 1995).

Counsel have demonstrated in their petition for fees that a lodestar calculation would

yield a fee of $913,940.00. This would result in a fee which is appreciably higher

than the percentage fee which is being requested.

Under either method, percentage or lodestar, any fee which is awarded to

counsel must be reasonable. Reasonableness is determined by weighing and

considering the types of factors which are outlined in the case of Johnson v._ Georgia

Highway Exoress.inc. 488 F.2d 714 (5th Cir. 1974), and adopted by our Circuit in

Brown v..Phillios Petroleum Cornnanyr, 838 F.2d 451,454-55 ClOth Cir. 1988). Those

factors include the following:

(1) the time and labor involved; (2). the novelty and difficulty of the questions; (3) the skill requisite to perform the legal services property; (4) the preclusion of other employment by the attorney due to acceptance of the case; {5} the customary fee; (5) any prearranged fee--this is helpful but not determinative; (7) time limitations imposed by the client or the circumstances; (8) the amount involved and the results obtained; (9) the experience, reputation, and ability of the attorneys; (1 0) the undesirability of the case; (11) the nature and length of the professional relationship with the client; and (12) awards in similar cases.

Id at 454-55.

I have considered the "Johnson factors," and I find that a percentage award of

1/3 the result obtained is warranted in this case. In addition to the Johnson factors,

V


I note that it is customary in this jurisdiction for attorneys to request a 1/3 contingency

fee in high risk cases such as this one. Finally, I note that counsel informed the

members of the class that this is the percentage of fee which would be requested from

the court by counsel.

Counsel have asked that I award to them, from the settlement proceeds, the

costs which were expended by them in furtherance of this litigation, $132,725.59,

and that I grant "incentive awards" of $2,500.00 each to the four named plaintiffs,

Marc Manoff, Isabel M. Sperber, Lyon Investment Partnership and Forrest S. Williams.

I find that the request for these costs and incentive awards are reasonable and ,

appropriate.

it is therefore ORDERED as follows:

1. Counsel for plaintiffs are awarded as attorneys' fees a 1/3 percentage of the

amount which was recovered as a result of the litigation. One-third of the total

recovery is $833,333.33, and counsel are awarded this sum as their fees.

2. Counsel shall be reimbursed the sums which were expended by them as

costs for this litigation, and they are awarded from the proceeds of the settlement the

sum of $132,715.69.

3. The named plaintiffs, Marc Manoff, Isabel M. Sperber, Lyon Investment

Y

4


.jL.41. U `WIIV.Y v ... v. - - ..w -..w.. ...-.. ...-.- w.

Partnership and forrest S. Williams, shall each receive an incentive award of

$2,500.00.

DATED at Denver, Colorado on: ' March 4, 1997

BY THE COURT:

Edward Schlatter United States Magistrate Judge

I certify that I have duly mailed a copy of the foregoing Order to the following:

Richard Bemporad, Esq. David C. Harrison, Esq. Sherrie Brown, Esq. Lowey Dannenberg Bemporad & Selinger, P.C.

747 Third Avenue New York, NY 10017-2877

Robert Hoffman, Esq. Barrack, Rodos, & Bacine 3300 Two Commerce Square 2001 Market Street Philadelphia, PA 19103

Robert J. Dyer, III, Esq. F. James Donnelly, Esq. Charles W. Lilley, Esq. Dyer, Donnelly & Litley DC Box 17

Gerald L. Bader, Jr., Esq. Jeffrey M. Villanueva, Esq. Bader & Villanueva, P.C. 1660 Wynkoop Street, Suite 1100 Denver, CO 80202-11 60

I

I

S


Lee Squitierl, Esq. Mark C. Gardy, Esq. Joshua M. Ufshitz, Esq. Abbey & Ellis 212 East 39th Street New York NY. 10016

Jonathan Siegfried, Esq. Pamela C. Tames, Esq. Reid & Priest LLP 40 West 57th Street New York, NY 10019

Albert B. Wolf, Esq. Raymond P. Mioklewright, Esq. Wolf & Slatkin 3773 Cherry Creek N. Dr. #745 Denver, CO 80209-3827

William S. Lerach, Esq. Alan Schulman, Esq. Darren J. Robbins, Esq. Milberg Weiss Bershad Hynes & Lerach

600 West Broadway, Suite 1800 San Diego, CA 92101

Alfred G. Yates, Jr., Esq. 519 Allegheny Building 429 Forbes Avenue Pittsburgh, PA 15219

Dated: March 4, 1997

Secretary to Magistrate Judge Schlatter

E

6


in the united states district court for the district of ... · mailing information for a case...

Documents