Vince Bonato, Et Al. V. Yahoo! Inc., Et Al. 11-CV-02732-Declaration Of
Total Page:16
File Type:pdf, Size:1020Kb
I THE WEISER LAW FIRM, P.C. KATHLEEN A. HERKENHOFF (168562) 2 12707 High Bluff Drive, Suite 200 San Diego, CA 92130 3 Telephone: 858/794-1441 Facsimile: 858/7941450 4 kahweiserlawfirm.com 5 THE WEISER LAW FIRM, P.C. ROBERT B. WEISER 6 BRETT D. STECKER JEFFREY J. CIARLANTO 7 JOSEPH M. PROFY 121 North Wayne Avenue, Suite 100 8 Wayne, PA 19087 Telephone: 610/225-2677 9 Facsimile: 610/225-2678 10 Attorney for Plaintiff Yahia Tawila and Proposed Co-Lead Counsel 11 [Additional counsel appear on signature page] 12 UNITED STATES DISTRICT COURT 13 NORTHERN DISTRICT OF CALIFORNIA 14 SAN JOSE DIVISION 15 DEBRA SALZMAN, Derivatively on Behalf Case No. CV11-03269-PSG 16 of Nominal Defendant, Action Filed: July 1, 2011 17 Plaintiff, 1 DECLARATION OF KATHLEEN A. 18 vs. HERKENHOFF IN SUPPORT OF MOTION 1 TO CONSOLIDATE RELATED ACTIONS, 19 CAROL A. BARTZ and JERRY YANG, ) APPOINT LEAD PLAINTIFFS AND APPOINT CO-LEAD COUNSEL 20 Defendants, ) DATE: August 16, 2011 21 — and — ) TIME: 10:00 a.m. ) JUDGE: PAUL SINGH GREWAL 22 YAHOO! INC., a Delaware corporation, 23 Nominal Defendant ) 24 [Caption continued on next va2e.1 25 76 27 28 1 JANE OH. Derivativel y on Behalf of Herself ) Case No. CV11-03286-HRL 2 and All Others Similarly Situated, ) Action Filed: July 5, 2011 3 Plaintiff, 4 vs. ) 5 CAROL A. BARTZ. JERRY YANG, ROY ) BOSTOCK, PATTCHART, SUSAN JAMES, ) 6 VYOMESEI JOSHI, DAVID KENNY, ) ARTHUR KERN, BRAD SMITH, and GARY 1 7 WILSON, 8 Defendants. ) 9 — and — 10 YAHOO! INC., ) ) 11 Nominal Defendant. 1 12 13 YAHLA TAWILA, Derivatively on Behalf of Case No. CV11-03301-HRL YAHOO! INC., ) 14 ) Action Filed: July 6, 2011 Plaintiff. ) 15 vs. 16 CAROL A. BARTZ. JERRY YANG. ROY ) 1 7 ROSTOCK, PATTI HART,' SUE JAMES, ) VYOMESH JOSHI, DAVID KENNY, 18 ARTHUR KERN, BRAD SMITH, and GARY ) WILSON, ) 19 Defendants, ) 20 — and — 21 ) YAHOO! INC., ) 2? ) Nominal Party. ) ) -)4 25 26 27 28 1 IRON WORKERS MID-SOUTH PENSION j Case No. CV H-03302-PSG FUND, Derivatively on Behalf of YAHOO! ) 2 INC,. ) Action Filed: July 6, 2011 3 Plaintiff, ) ) 4 vs. ) 5 CAROL BARTZ, JERRY YANG, ROY J. ) BOSTOCK, PATTI S. HART, SUSAN M. ) 6 JAMES, VYOMESH JOSH!, ARTHUR FL ) KERN, BRAD D. SMITH, GARY L, 7 WILSON and JACK MA, ) ) 8 Defendants, 9 — and — 10 YAHOO! INC.. a Delaware corporation 11 Nominal Defendant. ) 12 13 14 15 16 17 18 19 20 21 22 24 26 27 28 I, Kathleen A. Herkenhoff, declare as follows: 2 I. I am of counsel to The Weiser Law Firm, P.C. ("The Weiser Firm"), counsel for 3 Plaintiff Yahia Tawila ("Tawila") in Taw!la v. Burt; et al., Case No. CVI1-0330l-HRL (the 4 -Tawila Action -). I am an attorney duly licensed to practice before all courts of the State of 5 California. I submit this declaration in support of the Motion to Consolidate Related Actions, 6 Appoint Lead Plaintiffs and Appoint Co-Lead Counsel (the -Motion"), which Motion has been 7 jointly filed by Tawila and Plaintiff Jane Oh, the named plaintiff in Oh v. Bartz, et al., .Case No. 8 CV11-03286-HRL (the "Oh Action"). I have personal knowledge of the mailers stated herein and, if 9 called upon, I could and would competently testify thereto. 10 2. Currently, the Weiser Firm is serving as co-lead or sole lead counsel in several 11 stockholder derivative actions that could have a significant impact on corporate governance issues 12 nationwide, including several cases based on the failure of corporate boards of directors to amend 13 executive compensation following shareholders' rejection of such compensation in "say on pay" 14 votes. Earlier this year. in In re KeyCory Derivative Litig., No. 1:10-ev-0 786-DAP (N.D. Ohio 15 2010). the Weiser Firm served as lead counsel and produced what it believes to be the first-ever 16 settlement of any such case. The KeyCorp derivative action was based on allegations of misconduct 17 arising from the failure of the KeyCorp Board of Directors to amend the executive compensation 18 awarded for 2009, even though a majority of KeyCorp's voting stockholders rejected such 19 compensation in a -say on pay" vote. The settlement of the KeyCorp case provided for a series of 20 corporate governance measures related to: (a) the ideological underpinnings of compensation 21 principles at k.cyCorp; (b) the actual award of executive compensation at KeyCorp; (c) the 22 disclosure of those decisions and ideology in KeyCorp's financial filings; (d) the composition of the 23 KeyCorp Board, its sub-committees, and their advisors; and (e) KeyCom's and its Board's ongoing 24 relationship with Key Corp shareholders. In addition, pursuant to the settlement, certain of the 25 defendants in the KeyCorp case relinquished highly-valuable economic rights which existed under 26 their respective employment contracts. The Weiser Firm believes that collectively, these measures 27 will save KeyCorp millions (or perhaps tens of millions) of dollars over time. 28 DECLARATION OF KATHLEEN A. HERKENHOFF IN SUPPORT OF MOTION TO CONSOLIDATE RELATED ACTIONS, APPOINT LEAD PLANITIFFS AND APPOINT CO-LEAD COUNSEL - - 1 - 1 3. In addition, the Weiser Firm very recently obtained extraordinary relief in connection 2 with the settlement of a shareholder derivative action brought on behalf of Vitacost.com , Inc. (Kloss 3 v. Kerker, et al., Case No.: 502010CA018594XXXXN4B,F1. Circuit Ct., 15th Judicial Circuit, Palm 4 Beach Cty.), which actually preserved that company's corporate form and the equity interests of its 5 shareholders. The Vitacost action centered upon Vitacosf s December 7, 2010 announcement that its 6 historical financial statements could not be relied upon due to a failure to adhere to certain critical 7 corporate formalities fourteen years earlier. As a result, trading in Vitacost stock was halted by 8 NASDAQ and Vitacost stockholders held illiquid shares of uncertain legal status. Pursuant to the 9 settlement, the Court entered an Order which: (I) confirmed the number of shares in the Company 10 based on the number of outstanding shares in the Company's initial public offering in 2009 (in 11 effect, "quieting title" to Vitacost shares), thus reassuring Vitacost stockholders and the market that 12 Vitacost's outstanding shares and options were valid; and (2) deemed Vitacost's certificate of 13 incorporation valid and effective. In the absence of this settlement, Vitacost could not have become 14 -current" with respect to its historical financial statements, its stock could not have resumed trading, 15 and Vitacost would have almost certainly been forced to file for bankruptcy. This settlement was 16 unprecedented and historic, and in essence saved the Company and the interests of its stockholders. 17 4. Attached are true and correct copies of the following exhibits: 18 Exhibit A Initial complaint tiled in the Tmvila Action; Exhibit B Initial complaint filed in the Oh Action; 2 0 Exhibit C Initial complaint filed in Salzman v. Bcu-tz et al., Case No. CV11-03269-PSG (the "Salzman Action); 21 Exhibit D Initial complaint filed in Iron Workers Mid-South Pension Fund v. Bartz, et 22 al., Case No. CV I 1-03302-PSG the -Iron Workers Action"); 23 Exhibit E The Weiser Law Firm resume; 24 Exhibit F Glancy Binkow & Goldberg LLP firm resume; Exhibit G October 26, 2009 Stipulation of Settlement entered by the parties in Gregory v. Tuchman, et al., C.A. No. 3925-CC (Del. Ch.) C`TeleTechTh 26 Exhibit H Relevant excerpts from the January 5, 2010 Settlement Hearing Transcript in 27 TeleTech; 28 DECLARATION OF KATHLEEN A. HERKENHOFF IN SUPPORT OF MOTION TO CONSOLIDATE RELATED ACTIONS, APPOINT LEAD PLANITIFES AND APPOINT CO-LEAD COUNSEL - - 2 - I Exhibit 1 Final Judgment Approving Settlement and Order of Dismissal entered on January 5, 2010 in TeleTech., 2 Exhibit J Stipulation Consolidating Actions, Appointing Lead Counsel and Related 3 Matters and Order Thereon entered on August 26, 2010 in King v. Meyer 111, et al.. Civil Action No. 1:10-cv-01786-DAP N.D. Ohio) ("Keycorp"). 4 1 declare under penalty of perjury under the laws of the United States of America that the 5 foregoing is true and correct. Executed this 11th day of July, 2011, at San Diego, California. 6 7 A r 8 E' ;Al am.; KATHLEEN A. ERRE-RPOF ' 9 10 11 12 13 14 15 16 17 18 19 21 22 23 24 25 26 27 DFCLARAFION OF KATHLEEN A. HERKENHOFT IN SUPPORT OF MOTION TO CONSOLIDATE RELATED ACTIONS, APPOINT LEAD PLANITIFFS AND APPOINT CO-LEAD COUNSEL - - 3 - EXHIBIT A 1 THE WEISER LAW FIRM, P.C. KATHLEEN A. HERR'ENHOFF (168562) ' , ' VW 2 12707 High Bluff Drive, Suite 200 5 San Diego, CA 92130 3 Telephone: (858) 794-1441 ! Facsimile: (858) 794-1450 IP" p 44.57 :FL)" / 4 [email protected] okf:ckVie, - , 410415• VVie. 5 Attorney for Plaintiff Yahia Tawila bini,(1.),h1,10:4;19 S an 4„csfoc,;,`-kirr, 6 7 8 UNI1ED STALES DISTRICT COURT 9 NORTHERN DISTRICT OF CALIFORNIA liTh: 10 SAN JOSE DIVISION 110 YAH1A TAW1LA, Derivatively on Behalf of ) GaYN1 3 3 01 12 YAHOO! INC., ) ) VERIFIED SHAREHOLDER DERIVATIVE 13 Plaintiff, ) COMPLAINT FOR BREACH OF ) FIDUCIARY DUTY, GROSS 14 VS. ) MISMANAGEMENT, ABUSE OF ) CONTROL, CORPORATE WASTE AND 15 CAROL A. BARTZ, JERRY YANG, ROY ) UNJUST ENRICHMENT BOSTOCK, PATH HART, SUE JAMES, ) 16 VYOMESH JOSHI, DAVID KENNY, ) ARTHUR KERN, BRAD SMITH, and GARY) 17 WILSON, ) ) 18 Defendants, ) ) 19 - and - ) ) 20 YAHOO! INC., ) ) 21 Nominal Party. ) ) DEMAND FOR JURY TRIAL 22 23 24 25 26 a3 27 28 1 VERifIED SHAREHOLDER DERIVATIVE COMPLAJNT 2 1.