Notice of Proposed Settlements of Class Action Litigation, Settlement Fairness Hearing, and Proposed Order
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UNITED STATES DISTRICT COURT DISTRICT OF NORTH DAKOTA SOUTHEAST DIVISION —————————————————–————— X RAYMOND HANS, et al ., : : Plaintiffs : Civil Action No. : 3:05-CV-00115-RRE-KKK v. : : GARY D. THARALDSON, et al. ,: : Defendants, : : and : : THARALDSON MOTELS, INC. : EMPLOYEE STOCK OWNERSHIP PLAN, : : Nominal Defendant. : : —————————————————–————— X : BERNARD MCKAY, et al. ,: : Plaintiff : Civil Action No. : 3:08-CV-00113-RRE-KKK v. : : GARY D. THARALDSON, : : Defendant, : : and : : THARALDSON MOTELS, INC. : EMPLOYEE STOCK OWNERSHIP PLAN, : : Nominal Defendant. : —————————————————–————— X NOTICE OF PROPOSED SETTLEMENTS OF CLASS ACTION LITIGATION, SETTLEMENT FAIRNESS HEARING, AND PROPOSED ORDER Your legal rights might be affected if you are a member of one of the following groups: 1 I. PARTICIPANTS IN THE TMI HOSPITALITY, INC. (“TMI”) EMPLOYEE STOCK OWNERSHIP PLAN AND TRUST (“TMI ESOP”) (FORMERLY KNOWN AS THE THARALDSON MOTELS, INC. ESOP) AT ANY TIME FROM DECEMBER 30, 1998 TO THE PRESENT WHO RECEIVED AN ALLOCATION OF PLAN ASSETS TO THEIR TMI ESOP ACCOUNTS WHICH THEY DID NOT SUBSEQUENTLY FORFEIT UNDER THE TERMS OF THE TMI ESOP AND WHO ARE NO LONGER EMPLOYEES OF TMI (OR AN AFFILIATE OF TMI), AND THE BENEFICIARIES OF SUCH PARTICIPANTS (“FORMER EMPLOYEE CLASS”); 1 Defendants (see below for a list of Defendants), members of their immediate families, their legal representatives, heirs, successors or assigns or any excluded party, are excluded from both classes in the Hans Action and the Class in McKay. II. PARTICIPANTS IN THE TMI ESOP AT ANY TIME FROM DECEMBER 30, 1998 TO THE PRESENT WHO ARE PRESENT EMPLOYEES OF TMI (OR AN AFFILIATE OF TMI), AND THE BENEFICIARIES OF SUCH PARTICIPANTS (“CURRENT EMPLOYEE CLASS”). PLEASE READ THIS NOTICE CAREFULLY. A FEDERAL COURT HAS AUTHORIZED THIS NOTICE. THIS IS NOT A SOLICITATION. YOU HAVE NOT BEEN SUED. This notice (“Notice”) advises you of two proposed settlements (the “Settlements”) in the above referenced litigation in Hans v. Tharaldson (the “Hans Action”) and McKay v. Tharaldson (the “McKay Action”) (collectively the “Actions”). In the Actions, Plaintiffs seek to recover losses which they allege were suffered by the TMI ESOP as the result of breaches of fiduciary duty by Defendants. The parties reached proposed settlements of these Actions on or about October 10, 2012. The United States District Court for North Dakota (the “Court”) has preliminarily approved the Settlements and has scheduled a final hearing (the “Fairness Hearing”) to evaluate the fairness and adequacy of each of the Settlements. At the Fairness Hearing, the Court will consider (i) whether to approve the Settlements as fair and adequate; (ii) whether to approve the Plan of Allocation in the Hans Action (see Question 5 below) which sets forth the manner in which the Settlement proceeds will be distributed to Settlement Participants; and (iii) whether to award attorneys’ fees and/or expenses to Plaintiffs’ Counsel (see Question 8 below). The Fairness Hearing, before the Honorable Ralph R. Erickson, has been scheduled for February 25, 2013, at 9:00 AM in Courtroom 1 at the United States District Court for North Dakota, 655 First Avenue North, Fargo, ND 58102. The terms of the Settlements are contained in two separate Settlement Agreements (the “Settlement Agreements”). A copy of the Settlement in the Hans Action (the “Hans Settlement”) is available at http://www.cohenmilstein.com/ cases/82/tharaldson-motels-inc-employee-stock-ownership-plan-hans-v-tharaldson or www.kellersettlements.com , or by contacting Plaintiffs’ Counsel in the Hans Action identified below. A copy of the Settlement Agreement in the McKay Action (the “McKay Settlement”) is available at http://www.cohenmilstein.com/cases/230/tharaldson-motels- inc-employee-stock-ownership-plan-litigation-ii-mckay-v-tharaldson or by contacting Cohen Milstein at the address below identified below. Capitalized and italicized terms used in this Notice and not defined herein have the meanings assigned to them in the Settlement Agreement. Any questions regarding the Hans Settlement should be directed to counsel listed below. If you are a member of the Former Employee Class, please contact counsel for the Former Employee Class. If you are a member of the Current Employee Class, please contact counsel for the Current Employee Class: Counsel for the Former Employee Class: Counsel for the Current Employee Class: COHEN MILSTEIN KELLER ROHRBACK P.L.C. SELLERS & TOLL P.L.L.C. Gary Gotto R. Joseph Barton Gary Greenwald Bruce F. Rinaldi David Ko 1100 New York Avenue, N.W. 3101 North Central Avenue WestTower, Suite 500 Suite 1400 Washington, D.C. 20005-3934 Phoenix, AZ 85012 Telephone: (202) 408-4600 Telephone: (602) 248-0088 Or Toll Free: 1-888-240-0775 Or Toll Free: 1-800-776-6044 Email: [email protected] Email: [email protected] 2 Counsel for North Star Trust Company: MOORE & VAN ALLEN PLLC Alton L. Gwaltney, III Mark A. Nebrig 100 North Tryon Street Suite 4700 Charlotte, NC 28202-4003 Telephone: 704-331-1000 Email: [email protected] Any questions regarding the McKay Settlement should be directed to: Counsel for the McKay Class: COHEN MILSTEIN SELLERS & TOLL P.L.L.C. R. Joseph Barton Bruce F. Rinaldi 1100 New York Avenue, N.W. WestTower, Suite 500 Washington, D.C. 20005-3934 Telephone: (202) 408-4600 Or Toll Free: 1-888-240-0775 Email: [email protected] Please do not contact the Court, as Court personnel will not be able to answer your questions. PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. IF YOU ARE A PARTICIPANT IN THE TMI ESOP, THE SETTLEMENT MAY AFFECT YOUR RIGHTS. YOU ARE NOT BEING SUED IN THIS MATTER. YOU DO NOT HAVE TO APPEAR IN COURT, AND YOU DO NOT HAVE TO HIRE AN ATTORNEY IN THIS CASE. IF YOU ARE IN FAVOR OF THE SETTLEMENTS, YOU NEED NOT DO ANYTHING. IF YOU DISAPPROVE, YOU MAY OBJECT TO EITHER OR BOTH OF THE SETTLEMENTS PURSUANT TO THE PROCEDURES DESCRIBED BELOW. ACTIONS YOU MAY TAKE IN THE SETTLEMENTS NO ACTION IS NECESSARY Unless the Court approves both the Hans Settlement and McKay Settlements TO RECEIVE BENEFITS. any party may withdraw from the Settlements. If both Settlements are approved by the Court and you are either a member of the Former Employee Class or the Current Employee Class (as defined above), you do not need to do anything in order to receive an allocation of the Hans Settlement. The portion, if any, of the Settlement Fund to be allocated for your benefit will be calculated as part of the implementation of the Hans Settlement. No additional allocations will be made to Plaintiffs as a result of the McKay Settlement. YOU CAN OBJECT If you wish to object to any part of the Hans Settlement and/or the McKay (NO LATER THAN Settlement, you can write to the Court and counsel and explain why you do not FEBRUARY 15, 2013) like the Settlement. YOU CAN GO TO Whether you support or object to the Hans Settlement and/or the McKay THE HEARING ON Settlement, you may attend the Final Fairness Hearing and speak in Court, but FEBRUARY 25, 2013 only if you have submitted a written objection or support to the Court and counsel, as explained below. 3 WHAT THIS NOTICE CONTAINS SUMMARY OF SETTLEMENT ............................................................................................................................. 4 BASIC INFORMATION ........................................................................................................................................... 5 1. Why did I get this Notice? ............................................................................................................................... 5 2. What is this lawsuit about? What has happened so far? ................................................................................... 5 3. Why is there a Settlement? ............................................................................................................................... 6 4. What does the Settlement provide? .................................................................................................................. 7 5. What will be my share of the Settlement Fund? .............................................................................................. 7 6. How can I get my portion of the recovery? ...................................................................................................... 8 7. When would I receive my portion of the recovery? ......................................................................................... 8 8. How will the lawyers be paid? ......................................................................................................................... 8 OBJECTIONS ........................................................................................................................................................... 9 9. If I don’t like the Settlement, how do I tell the Court? .................................................................................... 9 THE COURT’S FAIRNESS HEARING ................................................................................................................ 10 10. Do I have to come to the hearing? .................................................................................................................. 10 11. May I speak at the hearing? ........................................................................................................................... 10 IF YOU DO NOTHING .........................................................................................................................................