Moss v. Towell, 2018 NCBC 20.
STATE OF NORTH CAROLINA IN THE GENERAL COURT OF JUSTICE SUPERIOR COURT DIVISION COUNTY OF WAKE 16 CVS 11038
JOHN MOSS, on Behalf of Himself and All Others Similarly Situated,
Plaintiff,
v.
JOSEPH H. TOWELL; SCOTT M. CUSTER; J. ADAM ABRAM; MICHAEL S. ALBERT; DAVID S. BRODY; HARRY M. DAVIS; BARRY Z. DODSON; THOMAS J. HALL; THIERRY F. HO; STEVEN J. LERNER; MICHAEL S. PATTERSON; ORDER & OPINION APPROVING MARY E. RITTLING; HARRY C. SETTLEMENT SPELL; RICHARD A. URQUHART III; NICOLAS D. ZERBIB; and F.N.B. CORPORATION,
Defendants,
and
YADKIN FINANCIAL CORPORATION,
Nominal Defendant.
1. THIS MATTER is before the Court on Plaintiff’s Motion for Final
Approval of Settlement (“Motion for Settlement Approval”). For the reasons
discussed below, the Court RESERVES and retains jurisdiction to rule on a pending
request for a fee award, CERTIFIES a Settlement Class as defined below,
APPROVES the Settlement, and DISMISSES all class claims with prejudice. Rigrodsky & Long, P.A., by Seth D. Rigrodsky (pro hac vice), Brian D. Long (pro hac vice), and Jeremy J. Riley (pro hac vice), and the Law Offices of James Scott Farrin, by Gary W. Jackson for Plaintiff John E. Moss.
Reed Smith LLP, by Roy W. Arnold (pro hac vice), and Smith Moore Leatherwood LLP, by Robert R. Marcus for Defendant F.N.B. Corporation.
Skadden, Arps, Slate, Meagher & Flom LLP, by Paul J. Lockwood (pro hac vice), Joseph O. Larkin (pro hac vice), and Alyssa S. O’Connell (pro hac vice), Moore & Van Allen PLLC, by Mark A. Nebrig, and Cadwalader, Wickersham & Taft LLP, by Jonathan M. Watkins for Defendants Yadkin Financial Corporation, Joseph H. Towell, Scott M. Custer, J. Adam Abram, Michael S. Albert, David S. Brody, Harry M. Davis, Barry Z. Dodson, Thomas J. Hall, Thierry F. Ho, Steven J. Lerner, Michael S. Patterson, Mary E. Rittling, Harry C. Spell, Richard A. Urquhart III, and Nicolas D. Zerbib.
Gale, Chief Judge.
I. NATURE OF THE DISPUTE AND PROCEDURAL HISTORY
2. John E. Moss (“Plaintiff”) is a former owner of Yadkin Financial
Corporation (“Yadkin”) stock.
3. On July 20, 2016, Yadkin entered into a merger agreement (“Merger”),
whereby F.N.B. Corporation (“FNB”) agreed to acquire all outstanding Yadkin stock,
and Yadkin shareholders agreed to receive 2.16 shares of FNB stock for each Yadkin
share they owned (“Transaction”).
4. On September 1, 2016, Plaintiff filed a putative class action and
shareholder derivative complaint (“Complaint”) against Yadkin directors Joseph H.
Towell, Scott M. Custer, J. Adam Abram, Michael S. Albert, David S. Brody, Harry
M. Davis, Barry Z. Dodson, Thomas J. Hall, Thierry F. Ho, Steven J. Lerner, Michael
S. Patterson, Mary E. Rittling, Harry C. Spell, Richard A. Urquhart III, Nicolas D. Zerbib (collectively, the “Individual Defendants”), FNB, and Yadkin (collectively with
the Individual Defendants, “Defendants”).
5. The Complaint asserted direct and derivative claims that (1) the
Individual Defendants breached their fiduciary duties when they agreed to the
Merger with allegedly unfavorable terms that undervalued Yadkin’s shares, and (2)
FNB aided and abetted the Individual Defendants in breaching their fiduciary duties.
(Compl. ¶¶ 56–84, ECF No. 1).
6. On October 5, 2016, the action (“Action”) was designated as a complex
business case by order of the Chief Justice of the Supreme Court of North Carolina
and then assigned to the undersigned the following day.
7. On October 17, 2016, Yadkin filed its definitive proxy statement (“Initial
Proxy”) with the SEC, which disclosed information about the Merger.
8. On October 18, 2016, Plaintiff filed an amended complaint (“Amended
Complaint”), which further alleged that the Individual Defendants breached their
fiduciary duties by failing to disclose allegedly material information about the
Merger. (Am. Compl. ¶¶ 89–90 ECF No. 7.)
9. On October 20, 2016, Plaintiff filed a Motion for Expedited Proceedings,
and Yadkin agreed to provide discovery to Plaintiff on an expedited basis in advance
of a motion and hearing for a preliminary injunction to enjoin the Merger. The parties
conducted expedited discovery.
10. On November 22, 2016, Plaintiff filed a Motion for a Preliminary
Injunction, seeking to enjoin a potential shareholder vote on the Merger until Yadkin disclosed additional information regarding Yadkin’s financial projections and
valuation.
11. On November 29, 2016, the parties entered into a Memorandum of
Understanding (“MOU”) to settle the action so long as Defendants made additional,
agreed-upon disclosures (“Supplemental Disclosures”) before a shareholder vote on
the Merger (“Settlement”).
12. On November 29, 2016, Yadkin filed the Supplemental Disclosures with
the SEC.
13. On December 9, 2016, Yadkin’s shareholders approved the Merger
(“Shareholder Vote”) and, on March 11, 2017, the Merger closed.
14. Plaintiff conducted confirmatory discovery following the Shareholder
Vote.
15. On October 20, 2017, Plaintiff submitted a Stipulation and Agreement
of Compromise, Settlement, and Release (together with exhibits, “Stipulation”), and
filed a Motion for Preliminary Approval of Settlement, Certification of Class,
Approval of Class Notice, and Final Approval Hearing Scheduling.
16. On November 16, 2017, the Court entered its Order Preliminarily
Approving Settlement and Certifying Class and Scheduling Order (“Order
Preliminarily Approving Settlement”), which: (1) preliminarily certified a class action
pursuant to Rule 23 of the North Carolina Rules of Civil Procedure, solely for the
purpose of effectuating the Settlement and subject to a hearing to further address the
fairness, reasonableness, and adequacy of the Settlement (“Settlement Hearing”); (2) set the Settlement Hearing for February 28, 2018; and (3) approved the form and
method of notice (“Notice”) described in the Order Preliminarily Approving
Settlement.
17. On February 7, 2018, Plaintiff filed the Motion for Settlement Approval.
18. The Court received an affidavit certifying that, as of February 13, 2018,
19,881 copies of the Notice approved by the Court in its Order Preliminarily
Approving Settlement were mailed to class members and nominees. (Aff. Service
Notice Pendency Class Action, Class Action Determination, Proposed Settlement
Class Action, Settlement Hearing, Right to Appear 4, ECF No. 45.)
19. On February 28, 2018, the Court conducted the Settlement Hearing, at
which class counsel and counsel for Defendants appeared and responded to the
Court’s questions. Prior to that hearing, the Court had advised the parties of
questions on which the Court must be satisfied prior to its consideration of any award
of attorneys’ fees, costs, or expenses, including whether the fee agreement between
class counsel and Plaintiff complied with Rules 1.5 and 1.8 of the North Carolina
Rules of Professional Conduct. See N.C. Rules Prof’l Conduct Rs. 1.5, 1.8. Because
the Settlement does not depend upon the Court’s award of any attorneys’ fees, the
Court, in its discretion, elected to separately consider the Motion for Settlement
Approval while reserving its consideration of counsel’s request for attorneys’ fees,
costs, and expenses. 20. The Court was further advised at the Settlement Hearing that no
member of the proposed class had filed an objection to the Settlement. One class
member attended the hearing but lodged no objection and did not request to be heard.
II. CLASS CERTIFICATION AND SETTLEMENT APPROVAL
A. The Court Certifies a Settlement Class.
21. The Motion for Settlement Approval requests, and the Settlement
contemplates, that the Court will certify a settlement class for purposes of the
Settlement only, pursuant to Rule 23 of the North Carolina Rules of Civil Procedure
(“Rule 23”).
22. Rule 23 allows North Carolina trial courts to certify a class action if it
finds that each of the following requirements are met:
(1) the existence of a class, (2) . . . the named representative will fairly and adequately represent the interests of all class members, (3) . . . there is no conflict of interest between the representative and class members, (4) . . . class members outside the jurisdiction will be adequately represented, (5) . . . the named party has a genuine personal interest in the outcome of the litigation, (6) . . . class members are so numerous that it is impractical to bring them all before the court, [and] (7) . . . adequate notice of the class action is given to class members.
In re PokerTek Merger Litig., No. 14 CVS 10579, 2015 NCBC LEXIS 10, at *9 (N.C.
Super. Ct. Jan. 22, 2015) (quoting Ehrenhaus v. Baker, Order No. 08 CVS 22632 ¶ 39
(N.C. Super. Ct. Feb 5, 2010)) (alterations in original); see also N.C. Gen. Stat. § 1A-
1, Rule 23 (2015).
23. “[A] ‘class’ exists . . . when the named and unnamed members each have
an interest in either the same issue of law or of fact, and that issue predominates over
issues affecting only individual class members.” Crow v. Citicorp Acceptance Co., 319 N.C. 274, 280, 354 S.E.2d 459, 464 (1987). When a class meets the above
requirements, “this Court has regularly acknowledged its broad discretion in
considering class certification.” In re Krispy Kreme Doughnuts S’holder Litig., No. 16
CVS 3669, 2018 NCBC LEXIS 1, at *8 (N.C. Super. Ct. Jan. 2, 2018) (“Krispy Kreme”);
see also, In re Newbridge Bancorp S’holder Litig., No. 15 CVS 9251, 2016 NCBC
LEXIS 91, at *15 (N.C. Super. Ct. Nov. 22, 2016); In re Harris Teeter Merger Litig.,
No. 13 CVS 12579, 2014 NCBC LEXIS 47, at *8 (N.C. Super. Ct. Sept. 24, 2014).
24. Having thoroughly considered the matters of record, the Court finds and
concludes that the requirements of Rule 23 have been met and that it should, in its
discretion, certify a settlement class (“Settlement Class”). Specifically, the Court
finds and concludes that: the named and unnamed members of the Settlement Class
have a common interest in the same issues of law and fact; Plaintiff’s claims are
typical of the members of the proposed class; Plaintiff has a genuine personal interest
in the Action; there is no apparent conflict of interest between Plaintiff and any
unnamed member of the proposed class; Plaintiff can adequately represent and has
adequately represented unnamed members of the proposed class, both within and
without North Carolina; the common issues presented in the Action predominate over
any issues that might only affect members individually; the number of members of
the proposed class are so numerous that joining them individually is impractical; the
Action seeks relief, including injunctive relief, that is common to all members of the
proposed class; the Notice provided to putative class members afforded adequate due
process to putative class members and was appropriate, the best notice practicable under the circumstances, and otherwise in full accord with all substantive and
procedural requirements imposed by law; and a class action is the efficient, practical,
and superior method for proceeding.
25. Accordingly, in its discretion, the Court, solely for purposes of
effectuating the Settlement, certifies the following non-opt out Settlement Class,
defined as:
any and all record holders and beneficial owners of common stock of Yadkin who held or owned such stock at any time during the period beginning on and including July 21, 2016 through and including March 11, 2017, the date of consummation of the Yadkin/FNB merger (the “Class Period”), and including any and all of their respective successors- in-interest, successors, predecessors-in-interest, predecessors, representatives, trustees, executors, administrators, estates, heirs, assigns and transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors-in-interest, predecessors, successors-in-interest, successors, and assigns. Excluded from the Settlement Class are Defendants and their immediate family members, any entity in which any Defendant has a controlling interest, and any successors-in-interest of such entity.
26. The Court appoints Plaintiff as Class Representative and Rigrodsky &
Long, P.A. as lead counsel for the Settlement Class (“Class Counsel”).
B. The Court Defers Ruling on Class Counsel’s Request for the Award of Attorneys’ Fees, Costs, and Expenses.
27. Neither the Settlement nor Court approval of the Settlement depends
upon the Court’s approval of attorneys’ fees, costs, or expenses to Class Counsel.
(Stipulation and Agreement of Compromise, Settlement and Release 13
(“Stipulation”), ECF No. 35 (“[T]he Settlement is expressly not conditioned on[ ] Court
approval of attorneys’ fees, costs[,] and expenses.”).) 28. The Court, in its discretion, reserves determination of Class Counsel’s
request for fees, costs, and expenses and proceeds to consider the fairness,
reasonableness, and adequacy of the Settlement independent of the Court’s review of
any such award.
29. The parties have requested an opportunity to submit additional
authorities or supporting materials regarding Class Counsel’s request for fees, costs,
and expenses. Any such supplemental filings shall be made on or before March 30,
2018.
C. The Settlement is Fair, Reasonable, and Adequate.
(1) The Court has examined the balance between the “give” and the “get” of the Settlement terms.
30. “Rule 23 requires court approval of any class settlement, recognizing
that class settlements present particular due process considerations because they
bind individuals not before the court.” Krispy Kreme, 2018 NCBC LEXIS 1, at * 12
(citing Ehrenhaus v. Baker, 216 N.C. App. 59, 72, 717 S.E.2d 9, 19 (2011) (“Ehrenhaus
I”)). However, North Carolina courts “have favored settlement of class actions
provided that a court determines that there has been fair notice, an opportunity for
class members to object, and that the settlement terms are fair, reasonable, and
adequate.” Krispy Kreme, 2018 NCBC LEXIS 1, at *12, (citing Ehrenhaus I, 216 N.C.
App. at 72, 717 S.E.2d 9, at 19).
31. The Court considers various factors when determining whether a
proposed class settlement is fair, reasonable, and adequate, including: (a) the strength of the plaintiff’s case, (b) the defendant’s ability to pay, (c) the complexity and cost of further litigation, (d) the amount of opposition to the settlement, (e) class members’ reaction to the proposed settlement, (f) counsel’s opinion, and (g) the stage of the proceedings and how much discovery has been completed.
In re Newbridge Bancorp S’holder Litig., 2016 NCBC LEXIS 91, at *21–22 (citing
Ehrenhaus I, 216 N.C. App. at 73–75, 717 S.E.2d at 19–20).
32. As this Court recently noted, “[a] court may be particularly vigilant in
its inquiry where a proposed settlement yields substantial rewards for class counsel
without any corresponding monetary benefit to class members.” Krispy Kreme, 2018
NCBC LEXIS 1, at *12. In a disclosure-based settlement, courts maintain such
vigilance by carefully examining the “give” and the “get” of the settlement. Id. at *17
(citing In re Newbridge S’holder Litig., 2016 NCBC LEXIS 91, at *22). In such
settlements, “the ‘get’ is the value of the supplemental disclosures and the ‘give’ is
the scope of the release encompassed by the settlement.” Krispy Kreme, 2018 NCBC
LEXIS 1, at *18. While the Court must “be careful not to simply substitute its own
judgment for that of competent litigation counsel that negotiated the settlement
terms at arm’s length[,]” it must also “guard against settlements based on inadequate
class representation and settlements reached through collusion that benefit only non-
class members.” Id. at *19.
33. However, “[a]s the scope of the release narrows, . . . the Court’s inquiry
as to the materiality of supplemental disclosures and their adequacy to support the
release tends to a more traditional settlement inquiry where the judgment of
competent counsel is accorded significant weight.” Id. at *19 (citing Ehrenhaus I, 216 N.C. App. at 72, 74, 717 S.E.2d at 19–20). Accordingly, “[t]he Court must still engage
in its fairness inquiry and satisfy itself that the supplemental disclosures are
‘material’ as that term has been defined by North Carolina’s appellate courts, while
at the same time resisting a reflexive rejection of a class settlement on grounds of
immateriality or insufficient consideration.” Id. at *20. As this Court summarized
in Krispy Kreme,
the Court must examine the materiality of any supplemental disclosures and find that they provide reasonable consideration for the class release. But where there is little or no opposition by class members, the Court is reluctant to set aside a fair arm’s length settlement negotiated between competent counsel if the disclosures are not plainly immaterial and the release is reasonable.
2018 NCBC LEXIS 1, at *21.
(2) The Supplemental Disclosures are sufficiently material to serve as reasonable consideration for the narrow release granted.
34. North Carolina uses the standard of materiality set out by the Supreme
Court of the United States in TSC Industries, Inc. v. Northway, Inc., 426 U.S. 438
(1976). See Ehrenhaus I, 216 N.C. App. at 88, 717 S.E.2d at 28–29 (adopting TSC
Industries’ materiality standard); Krispy Kreme, 2018 NCBC LEXIS 1, at *21–22
(same). In TSC Industries, the Supreme Court held that:
[a]n omitted fact is material if there is a substantial likelihood that a reasonable shareholder would consider it important in deciding how to vote. . . . It does not require proof of a substantial likelihood that disclosure of the omitted fact would have caused the reasonable investor to change his vote. What the standard does contemplate is a showing of a substantial likelihood that, under all the circumstances, the omitted fact would have assumed actual significance in the deliberations of the reasonable shareholder. Put another way, there must be a substantial likelihood that the disclosure of the omitted fact would have been viewed by the reasonable investor as having significantly altered the “total mix” of information made available.
426 U.S. at 449; see also Krispy Kreme, 2018 NCBC LEXIS 1, at *21–22.
35. The Supplemental Disclosures on which the Settlement is based fall into
two areas: (1) disclosures relating to the background of the Merger and (2) disclosures
relating to Yadkin’s financial projections.
36. The Initial Proxy stated that four parties—that is, FNB and parties A,
B, and C—were interested in acquiring Yadkin. (Pl’s. Mem. L. Supp. Mot. Final
Approval Settlement 13, ECF No. 43.) The Supplemental Disclosures, however,
informed shareholders that another party—party D—was interested in acquiring
Yadkin. Further, the Supplemental Disclosures stated that each of the parties,
including FNB, had signed a non-disclosure agreement (“NDA”) with Yadkin, which,
Plaintiff asserts, corrected “a misleading impression that . . . parties [A through D]
were not seriously interested in acquiring Yadkin.” (Pl’s. Mem. L. Supp. Mot. Final
Approval Settlement 13–14.) The Supplemental Disclosures also informed
shareholders that the NDAs Yadkin entered into with parties A, C, and D contained
“don’t ask, don’t waive” (“DADW”) standstill provisions, which precluded interested
parties from offering to acquire Yadkin without a written invitation from Yadkin’s
board. (Pl’s. Mem. L. Supp. Mot. Final Approval Settlement 14.)
37. The Supplemental Disclosures regarding Yadkin’s financial projections
included Yadkin’s projected earnings per share, net income, dividends per share, and
tangible book value for the years 2018, 2019 and 2020. The Initial Proxy contained
only Yadkin’s projections for 2016 and 2017. Yadkin’s financial advisor used the 2018, 2019, and 2020 projections to calculate Yadkin’s “critical 2020 terminal value.”
(Pl’s. Mem. L. Supp. Mot. Final Approval Settlement 15–16.)
38. The release contained in the Stipulation (“Release”) releases claims
based on “ownership of Yadkin common stock during the Class Period that relate in
any way” to: (1) the Merger; (2) any deliberations in connection with the Merger; (3)
consideration received by class members in connection with the Merger;
(4) consideration received by non-class members in relation to the Merger; (5) the
Shareholder Vote; (6) the statutory fiduciary obligations of the released parties in
connection with the Merger; or (7) any of the allegations filed in the Action.
(Stipulation 9–10.) The Release does not include “claims under federal or state law
that do not in any respect arise out of, or do not relate to” the Merger or the
Shareholder Vote. (Stipulation 10.) The Release, as this Court noted regarding a
substantially similar release in a disclosure-only settlement, “is not significantly
broader than the effect of the Shareholder Vote.” Krispy Kreme, 2018 NCBC LEXIS
1, at *25.
39. As to the Supplemental Disclosures regarding the NDAs and the DADW
provisions, this Court has found similar disclosures adequate to support a settlement.
In re Harris Teeter Merger Litig., 2014 NCBC LEXIS 47, at *18–19 (citing In re
Ancestry.com Inc. S’holder Litig., C.A. No. 7988-CS, 2012 Del. Ch. LEXIS 294 (Del.
Ch. Dec. 17, 2012) (transcript)). As to the Supplemental Disclosures regarding the
projections relied on by Yadkin’s financial advisor to form a fairness opinion, this Court has found similar disclosures adequate to support a settlement. See, e.g.,
Krispy Kreme, 2018 NCBC LEXIS 1, at *25–27.
40. Regarding the financial metrics disclosures, Class Counsel explained at
the Settlement Hearing that Yadkin’s financial advisor used the data for 2018, 2019,
and 2020 to generate the Net Present Value Analysis of Yadkin. While Class Counsel
conceded that some metrics, including earnings per share, could arguably have been
calculated without those Supplemental Disclosures, other metrics, including tangible
book value, could not have been. Defendants, without conceding that they breached
their fiduciary duties when issuing the Initial Proxy, do not challenge that Class
Counsel “presents a reasoned argument that some shareholders might have found
the Supplemental Disclosures to be material.” Id. at *27. Further, while Class
Counsel forthrightly acknowledged that it may have been possible to reasonably
approximate underlying assumptions made in the fairness opinion without the
Supplemental Disclosures, Class Counsel maintained that, regardless, the
Supplemental Disclosures regarding the DADW standstill agreements were plainly
material and essential to any class member’s full consideration of whether to approve
the Merger.
41. In response, Defendants’ counsel candidly admitted the potential
relevance of the disclosures regarding the DADW standstill agreements in light of
the uncertainty of developed precedents regarding such agreements. While
Defendants remain confident that they would have successfully defended against any
effort to enjoin either the Merger or the shareholder meeting to consider it, there is developed precedent that would have made any such injunction request at least
colorable. See In re Complete Genomics S’holder Litig., C.A. No. 7888-VCL 14–18
(Del. Ch. Nov. 27, 2012) (transcript) (enjoining the effects of DADW clauses and
holding that the clauses resulted in a board willfully blinding itself to the possibility
of a competing offer); see also Koehler v. NetSpend Holdings Inc., No. CIV. A. 8373-
VCG, 2013 Del. Ch. LEXIS 131, at *68–73 (Del. Ch. May 21, 2013) (discussing
Complete Genomics and concluding that a sale process was unreasonable).
Defendants thus join Class Counsel in asserting that the Supplemental Disclosures,
at least as to the DADW agreements, were adequate consideration for the tailored
Release included in the Settlement.
42. The Court finds and concludes that the Supplemental Disclosures are
“reasonable consideration” for the Settlement. Krispy Kreme, 2018 NCBC LEXIS 1,
at *21. Further, the Court finds that the value of the Supplemental Disclosures is
not “plainly disproportionate” to the scope of the Release, which is narrow, and that
the Release is “reasonable.” Id. at *20, 21.
43. The Court has further considered the Ehrenhaus factors and concludes
that they support Settlement approval. Defendants’ ability to pay is not a
consideration in this case. The Shareholder Vote and the opinion of counsel weigh
heavily in favor of court approval. In light of the Supplemental Disclosures and the
Shareholder Vote, the record does not suggest that the shareholders have a
meritorious process-based claim. Class Counsel advises, and the Court finds no reasoned basis to disagree, that there is no reasonable likelihood of any finding that
the Merger was based on an unfair price.
44. There is also no basis to suspect that the parties colluded to reach the
Settlement, and, instead, it appears that they reached the Settlement through arm’s-
length negotiations. That counsel for parties on both sides include some of the most
prominent national firms well-experienced in litigation of a similar nature further
supports court approval.
III. CONCLUSION
45. Based on the above findings and conclusions, the Court finds the
Settlement to be fair, reasonable, adequate, and in the best interests of the
Settlement Class, and it is hereby APPROVED. The parties are hereby authorized
and directed to comply with and to consummate the Settlement in accordance with
its terms and provisions, and the Clerk is directed to enter and docket this Order and
Final Judgment in the Action.
46. This Order and Final Judgment shall not constitute any evidence or
admission by any of the parties herein that any acts of wrongdoing have been
committed by any of the parties to the Action and should not be deemed to create any
inference that there is any liability therefor.
47. The Action is hereby DISMISSED WITH PREJUDICE in its entirety on
the merits and, except as provided in the Stipulation, without fees, costs, and
expenses beyond those approved herein and with the understanding that this dismissal shall not affect or preclude the Court’s further consideration of Class
Counsel’s request for a fee award.
48. This Order and Final Judgment provides for the full and complete
discharge, dismissal with prejudice, settlement and release of, and a permanent
injunction barring, any and all manner of claims, demands, rights, liabilities, losses,
obligations, duties, costs, debts, expenses, interest, penalties, sanctions, fees,
attorneys’ fees, actions, potential actions, causes of action, suits, agreements,
judgments, decrees, matters, issues and controversies of any kind, nature or
description whatsoever, disclosed or undisclosed, accrued or unaccrued, apparent or
not apparent, foreseen or unforeseen, matured or not matured, suspected or
unsuspected, liquidated or not liquidated, fixed or contingent, that Plaintiff or any or
all other members of the Settlement Class ever had, now have, or may have, whether
direct, derivative, individual, class, representative, legal, equitable or of any other
type, or in any other capacity, based on his, her, or its ownership of Yadkin common
stock during the Class Period, against any of the Released Parties (as defined below),
whether based on state, local, foreign, federal, statutory, regulatory, common or other
law or rule (including, but not limited to, any claims under federal or state securities
laws or state disclosure law or any claims that could be asserted derivatively on
behalf of Yadkin), which, now or hereafter, are based upon, arise out of, relate in any
way to, or involve, directly or indirectly, any of the actions, transactions, occurrences,
statements, representations, misrepresentations, omissions, allegations, facts,
practices, events, claims or any other matters, things or causes whatsoever, or any series thereof, that were or could have been alleged, asserted, set forth, claimed,
embraced, involved, or referred to in, or related to, directly or indirectly, the Action,
or the subject matter thereof in any court, tribunal, forum or proceeding, including,
without limitation, any and all claims that are based upon, arise out of, relate to, or
involve, directly or indirectly, (i) the Transaction or the Merger (or any amendment
thereto), (ii) any deliberations or negotiations in connection with the Transaction or
the Merger (or any amendments thereto), including the process of deliberation or
negotiation by Defendants, and any of their respective officers, directors, principals,
partners or advisors, (iii) the consideration received by Settlement Class members in
connection with the Transaction or the Merger, (iv) the consideration received by any
other person in connection with the Transaction or the Merger (including, but not
limited to, any Yadkin or FNB agreement), (v) the Shareholder Vote, including any
disclosures or statements relating to the Transaction or the Merger in the Initial
Proxy (including any amendments) or other public disclosures, including, without
limitation, claims under the federal securities laws within the exclusive jurisdiction
of the federal courts, (vi) the statutory or fiduciary obligations, if any, of the Released
Parties (as defined below) in connection with the Transaction or the Merger, or (vii)
any of the allegations in any complaint or amendment(s) thereto filed in the Action
(collectively, the “Released Claims”); provided, however, for the avoidance of doubt,
nothing in this release intends for Released Claims to include (x) the right to enforce
the Stipulation or the Settlement, or (y) claims under federal or state law that do not in any respect arise out of, or do not relate to, the Transaction, the Merger, or the
Shareholder Vote.
49. Defendants release Plaintiff and Plaintiff’s counsel from all claims,
complaints, petitions, liabilities, or sanctions arising out of the investigation,
commencement, prosecution, settlement, or resolution of the Action, and shall be
barred from asserting the same; provided, however, that such releases will not
include a release of the right to enforce the Stipulation or the Settlement.
50. Whether or not each or all of the following persons or entities were
named, served with process, or appeared in the Action, “Released Parties” means
FNB, Yadkin, Joseph H. Towell, Scott M. Custer, J. Adam Abram, Michael S. Albert,
David S. Brody, Harry M. Davis, Barry Z. Dodson, Thomas J. Hall, Thierry F. Ho,
Steven J. Lerner, Michael S. Patterson, Mary E. Rittling, Harry C. Spell, Richard A.
Urquhart III, and Nicolas D. Zerbib, and each of their respective past or present
family members, spouses, heirs, trusts, trustees, executors, estates, administrators,
beneficiaries, distributees, foundations, agents, employees, fiduciaries, partners,
control persons, partnerships, general or limited partners or partnerships, joint
ventures, member firms, limited liability companies, corporations, parents,
subsidiaries, divisions, affiliates, associated entities, shareholders, principals,
officers, managers, directors, managing directors, members, managing members,
managing agents, predecessors, predecessors-in-interest, successors, successors-in-
interest, assigns, financial or investment advisors, advisors, consultants, investment
bankers, entities providing any fairness opinion, underwriters, brokers, dealers, lenders, commercial bankers, attorneys, personal or legal representatives,
accountants, insurers, co-insurers, reinsurers, and associates, of each and all of the
foregoing.
51. Any party providing a release (a “Releasing Person”) shall waive and
relinquish, to the fullest extent permitted by law, the provisions, rights and benefits
of any state, federal, or foreign law or principle of common law, which may have the
effect of limiting the release set forth above. Plaintiff acknowledges, and the
members of the Settlement Class shall be deemed by operation of the entry of a final
order and judgment approving the Settlement to have acknowledged, that the
foregoing waiver was separately bargained for, is an integral element of the
Settlement, and was relied upon by each and all of the Defendants in entering into
the Settlement.
52. The fact of and provisions contained in the Stipulation, and all
negotiations, discussions, actions, and proceedings in connection with the
Stipulation, shall not be deemed or constitute a presumption, concession or an
admission by any party in the Action, any signatory thereof or any Released Parties
of any fault, liability, or wrongdoing or lack of any fault, liability, or wrongdoing, as
to any facts or claims alleged or asserted in the Action, or any other actions or
proceedings, and shall not be interpreted, construed, deemed, involved, invoked,
offered, or received in evidence or otherwise be used by any person in the Action or
any other action or proceeding, whether civil, criminal, or administrative, except in
connection with any proceeding to enforce the terms of the Stipulation. The Released Parties may file the Stipulation and/or this Order and Final Judgment in any action
that may be brought against them in order to support a defense or counterclaim based
on principles of res judicata, collateral estoppel, release, good-faith settlement,
judgment bar or reduction, or any theory of claim preclusion or issue preclusion or
similar defense or counterclaim.
53. The Court retains jurisdiction for the purposes of its further
consideration of Class Counsel’s request for an award of fees, costs, and expenses and,
as necessary, to enforce this Order or the Stipulation. Any supplemental filings in
regard to Class Counsel’s request for an award of fees, costs, and expenses shall be
filed on or before March 30, 2018.
SO ORDERED, this the 6th day of March, 2018.
/s/ James L. Gale James L. Gale Chief Business Court Judge