United States District Court, D. Delaware
IN RE WILMINGTON TRUST SECURITIES LITIGATION This document relates to ALL ACTIONS
EDUARDO C. ROBRENO, J.
before the Court are Plaintiffs' “Motion for Final
Approval of Class Action Settlements and Plan of
Allocation” and Plaintiffs' “Motion for an
Award of Attorney's Fees and Reimbursement of Litigation
Expenses.” On behalf of themselves and other members of
the class, Lead Plaintiffs have agreed to two class action
settlements: (i) a settlement with the Wilmington Trust
Defendants and Underwriter Defendants, and (ii) a settlement
with KPMG LLP (“KPMG”). The settlements will
resolve the instant matter, in which Lead Plaintiffs allege
that Defendants violated federal securities laws by making
false and misleading statements to conceal Wilmington Trust
Corporation's (“Wilmington Trust”) true
financial condition and lending practices. Lead Plaintiffs
allege that these statements caused investors to purchase
stock at artificially inflated prices and to suffer damages
as a result.
reasons that follow, the Court will grant both motions.
Factual and Procedural History
in November 2010, numerous securities class actions were
filed against certain Defendants in the United States
District Court for the District of Delaware, alleging
violations of federal securities laws. On March 7, 2010, the
Court consolidated the various actions under the caption
In re Wilmington Trust Securities Litigation
pursuant to the Private Securities Litigation Reform Act of
1995 (“PSLRA”), and appointed Lead Plaintiffs and
16, 2011, Lead Plaintiffs filed their Consolidated Securities
Class Action Complaint. ECF No. 39. The matter was assigned
to the Honorable Sue L. Robinson. After several rounds of
motions to dismiss and to amend, Lead Plaintiffs filed the
operative complaint, their Fourth Amended Consolidated
Securities Class Action Complaint (“FAC”), on
June 13, 2013. ECF No. 149.
asserted claims for (i) violations of § 10(b) of the
Securities Exchange Act of 1934, and SEC Rule 10b-5, (ii)
violations of § 20(a) of the Exchange Act, (iii)
violations of § 11 of the Securities Act of 1933, (iv)
violations of § 12(a)(2) of the Securities Act, and (v)
violations of § 15 of the Securities Act. On March 20,
2013, the Court denied Defendants' motions to dismiss the
FAC as to all Defendants except two. ECF No. 185.
September 12, 2014, Lead Plaintiffs moved for class
certification. ECF No. 259. On September 3, 2015, the Court
granted Lead Plaintiff's class certification motion in
full, appointed Lead Plaintiffs as “Class
Representatives, ” Lead Counsel as “Class
Counsel, ” and Chimicles & Tikellis LLP as
“Liaison Counsel” for the Class. ECF No. 406.
January 15, 2016, the Court approved notice to be
disseminated to potential members of the Class. ECF No. 429.
The Class Notice informed Class Members of (i) the action
pending against the Defendants, (ii) the Court's
certification of the action as a class action, and (iii)
Class Members' right to request exclusion from the Class.
Id. Beginning on March 1, 2016, the Class Notice was
mailed to potential Class Members.
13, 2017, the Action was reassigned to the Honorable Eduardo
C. Robreno of the United States District Court for the
Eastern District of Pennsylvania, sitting by designation in
the District of Delaware.
time, Lead Plaintiffs, Wilmington Trust Defendants and
Underwriter Defendants reached an agreement to settle. The
agreed-upon settlement stipulated that Wilmington Trust would
pay $200, 000, 000 in cash to resolve all claims against the
Wilmington Trust Defendants and Underwriter Defendants. On
May 15, 2018, the parties signed the stipulated settlement.
On May 21, 2018, Lead Plaintiffs and KPMG reached an
agreement stipulating that KPMG would pay $10, 000, 000 to
resolve all claims against it. On May 25, 2018, Lead
Plaintiffs and KPMG signed the stipulation. Lead Counsel
assert that the total settlement amount, $210 million, is the
second largest securities class action recovery obtained in
2, 2018, the Court held a hearing regarding the motion for
preliminary approval of the settlement agreements and granted
the motion and approved the notice program on July 10, 2018.
ECF Nos. 824 & 825.
July 25, 2018 through September 14, 2018, the claims
administrator, Epiq Class Action & Claims Solutions, Inc.
(“Epiq”), sent out the approved notice packets.
Epiq also published the notices as specified in the
settlement agreements and maintained a toll-free information
line and website.
Counsel filed the current motions for final approval of the
settlements and for fees and costs on September 15, 2018. On
October 25, 2018, Lead Counsel updated its filings by reply
indicating that no Class Member had objected to the
settlements or request for attorney's fee and costs. The
Court held a hearing on the two motions on November 5, 2018.
ECF No. 826.
Proposed Class Action Settlements
terms of the proposed class action settlement agreements are
set forth in the Stipulation and Agreement of Settlement with
Wilmington Trust Defendants and Underwriter Defendants, ECF
No. 821 Exh. 1, and the Stipulation and Agreement of
Settlement with KPMG. ECF No. 821 Exh. 2. The terms are
settlement agreements provide for a Class defined as follows:
All persons or entities who purchased or otherwise acquired
Wilmington Trust common stock during the period of January
18, 2008 up to November 1, 2010 (the “Class
Period”), including all persons or entities who
purchased shares of Wilmington Trust common stock issued in
the secondary common stock offering that occurred on or about
February 23, 2010 (the “Offering”), and were
ECF No. 821 Exhs. 1 & 2, at 8-9.
Proposed Settlement Terms
settlement agreements provide that Wilmington Trust will pay
$200, 000, 000 and KPMG will pay $10, 000, 000. Class Members
who submit a valid claim form will be reimbursed a pro rata
share of the settlement funds in accordance with the proposed
Plan of Allocation.
Plan of Allocation is a method of weighing the claims of the
claimants against one another to make pro rata allocations of
the settlement funds based on the timing of and amount of
Wilmington Trust stock each claimant purchased. Each
claimant's Recognized Loss Amount will be based primarily
on the difference between the amount of artificial inflation
in the prices of Wilmington Trust common stock at the time of
acquisition and at the time of sale, or the difference
between the actual purchase price and the sale price.
settlement agreements and notices provided that the
settlement funds would also be used to pay attorney's
fees not to exceed 28% of each settlement fund, and expenses
and costs of not more than $7, 500, 000. In the instant
motions, Plaintiffs' Counsel seek exactly 28% in fees,
and $6, 845, 500.88 in costs and expenses for themselves and
exchange for the benefits provided by the settlement,
settlement Class Members agree to release all claims that
they alleged or could have alleged in the action.
Federal Rule of Civil Procedure 23(e), the settlement of a
class action requires court approval. Fed.R.Civ.P. 23(e)(2).
A district court may approve a settlement agreement only
“after a hearing and on finding that it is fair,
reasonable, and adequate.” Id. The factual
determinations necessary to make Rule 23 findings must be
made by a preponderance of the evidence. In re Hydrogen
Peroxide Antitrust Litig., 552 F.3d 305, 320 (3d Cir.
2008). “The decision of whether to approve a proposed
settlement of a class action is left to the sound discretion
of the district court.” In re Prudential Ins. Co.
Am. Sales Practice Litig. Agent Actions, 148 F.3d 283,
299 (3d Cir. 1998) (quoting Girsh v. Jepson, 521
F.2d 153, 156 (3d Cir. 1975)).
Rule 23(h), at the conclusion of a successful class action,
class counsel may apply to a court for an award of
attorney's fees. The amount of an attorney's fee
award “is within the district court's discretion so
long as it employs correct standards and procedures and makes
finding of fact not clearly erroneous[.]” Sullivan
v. DB Invs., Inc., 667 F.3d 273, 329 (3d Cir. 2011) (en
banc) (internal quotation marks omitted).
Whether the Notice to the Class Members Was Adequate
Court must review the settlement notice procedures
implemented by the parties. In that notice of the class
action was previously approved, the Court is only concerned
with notice of the settlements. Rule 23 includes two
provisions concerning notice to the class members.
Rule 23(c)(2)(B) requires that class members be given the
best notice practicable under the circumstances, including
individual notice to all potential class members identifiable
through reasonable efforts. Specifically, the Rule provides
that such notice must, in clear, concise, and plain language,
state: (i) the nature of the action; (ii) the definition of
the class certified; (iii) the class claims, issues, or
defenses; (iv) the class member's right to enter an
appearance by an attorney; (v) the class member's right
to be excluded ...