Lawsuit update: Pending settlement ($3.5 million) reached during mediation but court has to approve | PVCT Message Board Posts

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Msg  27675 of 38097  at  3/10/2016 6:13:33 PM  by

Area51


Lawsuit update: Pending settlement ($3.5 million) reached during mediation but court has to approve the settlement terms

  
Pursuant to the Settlement described herein, a $3.5 million Settlement Fund has been established. Based on Lead Plaintiff’s estimate of the number of shares of Provectus common stock damaged during the Class Period, the average distribution per share under the Plan of Allocation is roughly $0.072 per share before deduction of any taxes on the income earned on the Settlement Amount thereof, notice and administration costs, and the attorneys’ fees, costs, and expenses as determined by the Court.
 
I didn't copy everything released today as there were 84 pages - tried to pick and choose what was important.
 
 

UNITED STATES DISTRICT COURT EASTERN DISTRICT OF TENNESSEE KNOXVILLE DIVISION

In re Provectus Biopharmaceuticals, Inc. Securities Litigation

Case No. 3:14-cv-00338-PLR-HBG

CLASS ACTION

District Judge Pamela L. Reeves

Magistrate Judge H. Bruce Guyton

EXHIBIT A-1

NOTICE OF PROPOSED SETTLEMENT OF CLASS ACTION, MOTION FOR ATTORNEYS’ FEES AND SETTLEMENT HEARING

 

This Notice of Proposed Settlement of Class Action (“Internet Long Form Notice”) has been posted on the following website: , pursuant to Rule 23 of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Eastern District of Tennessee (the “Court”). The purpose of this Internet Long Form Notice is to inform you of the pendency of this class action (the “Litigation”) and the proposed $3.5 million settlement reached therein (the “Settlement”) and of the hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement as well as counsel’s application for fees, costs, and expenses. This Notice describes what steps you may take in relation to the Settlement and this class action.1

This Internet Long Form Notice is not intended to be, and should not be construed as, an expression of any opinion by the Court with respect to the truth of the allegations in the Litigation as to any of the Settling Defendants or the merits of the claims or defenses asserted by or against the Settling Defendants. This Internet Long Form Notice is solely to advise you of the proposed Settlement of the Litigation and of your rights in connection therewith.

 
 

SUMMARY OF THIS NOTICE

Statement of Class Recovery

Pursuant to the Settlement described herein, a $3.5 million Settlement Fund has been established. Based on Lead Plaintiff’s estimate of the number of shares of Provectus common stock damaged during the Class Period, the average distribution per share under the Plan of Allocation is roughly $0.072 per share before deduction of any taxes on the income earned on the Settlement Amount thereof, notice and administration costs, and the attorneys’ fees, costs, and expenses as determined by the Court. Class Members should note, however, that these are only estimates. A Class Member’s actual recovery will be a proportion of the Net Settlement Fund determined by that claimant’s claims as compared to the total claims of all Class Members who submit acceptable Proofs of Claim. An individual Class Member may receive more or less than this estimated average amount. See Plan of Allocation set forth and discussed at pages 11 through 13 below for more information on the calculation of your claim.

Statement of Potential Outcome of Case

The Settling Parties disagree on both liability and damages and do not agree on the amount of damages that would be recoverable if the Class prevailed on each claim alleged. The Settling Defendants deny that Lead Plaintiff’s claims are valid, deny that they are liable to the Class, and deny that the Class has suffered any damages. The issues on which the parties disagree are many, but include:

(1) whether Settling Defendants engaged in conduct that would give rise to any liability to the Class under the federal securities laws;
(2) whether Settling Defendants have valid defenses to any such claims of liability;
(3) the appropriate economic model for determining the amount by which the price of Provectus common stock was allegedly artificially inflated (if at all) during the Class Period;
(4) the amount by which the price of Provectus common stock was allegedly artificially inflated (if at all) during the Class Period;
(5) the effect of various market forces on the price of Provectus common stock at various times during the Class Period;
(6) the extent to which external factors influenced the price of Provectus common stock at various times during the Class Period;
(7) whether any of Provectus’s statements during the Class Period were materially false or misleading or omitted material information;
(8) the extent to which the various matters that Lead Plaintiff alleged were materially false or misleading influenced (if at all) the price of Provectus common stock at various times during the Class Period; and
(9) the extent to which the various allegedly adverse material facts that Lead Plaintiff alleged were omitted influenced (if at all) the price of Provectus common stock at various times during the Class Period.
 
Statement of Attorneys’ Fees and Expenses Sought

Lead Counsel will apply to the Court for an award of attorneys’ fees of up to 33.3% of the Settlement Amount, plus expenses not to exceed $100,000, plus interest earned on both amounts at the same rate as earned by the Settlement Fund. Since the Action’s inception, Lead Counsel have expended time and effort in the prosecution of this Litigation on a wholly contingent basis and have advanced the expenses of the litigation in the expectation that if they were successful in obtaining a recovery for the Class they would be paid from such recovery.

In addition, the Lead Plaintiff may seek an amount not to exceed $10,000 for his costs and expenses incurred in connection with representing the Class in accordance with 15 U.S.C. §78u-4(a)(4). The requested attorneys’ fees and expenses amount to an average cost of approximately $0.026 per share of Provectus common stock.
  

Reasons for the Settlement

Lead Plaintiff’s principal reason for entering into the Settlement is the benefit to the Class now, without further risk or the delays inherent in continued litigation. The cash benefit under the Settlement must be considered against the significant risk that a smaller recovery – or, indeed, no recovery at all – might be achieved after contested motions, trial, and likely appeals, a process that could last several years into the future. For the Settling Defendants, who have denied and continue to deny all allegations of liability, fault, or wrongdoing whatsoever, the principal reason for entering into the Settlement is to eliminate the uncertainty, risk, costs, and burdens inherent in any litigation, especially in complex cases such as this Litigation. Settling Defendants have concluded that further conduct of this Litigation could be protracted and distracting.

 

2. What is this lawsuit about?

On May 27, 2014, a putative class action was filed in the United States District Court for the Eastern District of Tennessee (the “Court”) alleging violations of federal securities laws. The Court has appointed the law firm of Glancy, Prongay & Murray LLP as Lead Counsel. Fawwaz Hamati is the Court-appointed Lead Plaintiff.

The Consolidated Complaint for Violations of the Federal Securities Laws (the “Complaint”) filed in the Litigation alleged Settling Defendants’ material misstatements and omissions regarding the financial health and status of Provectus. Specifically, Lead Plaintiff alleged that Settling Defendants disseminated materially false and misleading information to the investing public about the commercialization of its prescription drug, PV-10; and that Settling Defendants had actual knowledge of and access to materially adverse facts concerning the Company’s communications with the United States Food and Drug Administration (“FDA”) about PV-10. Lead Plaintiff alleges that when the market learned of the Company’s misrepresentations, the price of Provectus stock fell, causing damage to purchasers of the Company’s stock during the Class Period.

On June 5, 2015, Defendants filed a motion to dismiss the Complaint in which they argued, among other things, that the Complaint failed to identify any material misrepresentation or omission of a material fact or to adequately plead with particularity any facts giving rise to a strong inference of any intent to engage in wrongdoing; on July 20, 2015, Lead Plaintiff filed and briefed an opposition to the motion to dismiss; and on September 17, 2015, Defendants filed and briefed their reply in further support of the motion to dismiss. Finally, on October 1, 2015, the Plaintiff and Defendants (collectively, the “Parties”) filed a joint motion to stay proceedings pending mediation. Thereafter, by Order dated October 2, 2015, the Court granted the joint motion to stay proceedings pending mediation.

During the course of the Litigation, the parties engaged the services of third-party neutral Jill Sperber. The Parties engaged in a full-day mediation session with Jill Sperber on October 28, 2015, and provided a joint status report to the Court concerning these efforts on November 4, 2015. Thereafter, in December 2015, the Parties agreed to the material terms of the settlement of this Litigation, and entered into a memorandum of understanding reflecting that agreement in January 2016. Ultimately, the Parties agreed to settle the Litigation for $3.5 million ($3,500,000.00).

Settling Defendants deny each and all of the claims and contentions of wrongdoing alleged by Plaintiff in the Litigation. Settling Defendants contend that they did not make any materially false or misleading statements, they disclosed all material information required to be disclosed by the federal securities laws, and any alleged misstatements or omissions were not made with the requisite intent or knowledge of wrongdoing. Settling Defendants also contend that any losses suffered by members of the Class were not caused by any false or misleading statements by them and/or were caused by intervening events.

3. Why is there a settlement?

The Court has not decided in favor of the Settling Defendants or of the Lead Plaintiff. Instead, both sides agreed to the Settlement to avoid the distraction, costs, and risks of further litigation, and Lead Plaintiff agreed to the Settlement in order to ensure that Class Members will receive compensation.

WHO IS IN THE SETTLEMENT

4. How do I know if I am a Member of the Class?

The Court directed that everyone who fits this description is a Class Member: all Persons and/or entities who purchased or otherwise acquired Provectus common stock during the period from December 17, 2013, through and including May 22, 2014, and were allegedly damaged thereby, except those Persons and entities that are excluded.

Excluded from the Class are the Defendants; the other officers and directors of Provectus during the Class Period; members of the immediate families of any excluded person; the legal representatives, heirs, successors, or assigns of any excluded person or entity; and any entity controlled by, or in which Defendants have or had a controlling interest. Also excluded from the Class are those Persons who timely and validly exclude themselves therefrom by submitting a request for exclusion in accordance with the requirements set forth in question 11 below.

Please Note: Receipt of the Postcard Notice does not mean that you are a Class Member or that you will be entitled to receive a payment from the Settlement. If you are a Class Member and you wish to be eligible to participate in the distribution of proceeds from the Settlement, you are required to submit the Proof of Claim and the required supporting documentation as set forth therein, postmarked or submitted online on or before ____________.

 
 

EXHIBIT A-3

SUMMARY NOTICE

TO: ALL PERSONS OR ENTITIES WHO PURCHASED OR ACQUIRED PROVECTUS BIOPHARMACEUTICALS, INC. COMMON STOCK BETWEEN DECEMBER 17, 2013 AND MAY 22, 2014, INCLUSIVE.

YOU ARE HEREBY NOTIFIED,

pursuant to an Order of the United States

District Court for the Eastern District of Tennessee, that a hearing will be held on _________, 2016, at , before The Honorable Pamela L. Reeves, at the Howard H. Baker, Jr. United States Courthouse, 800 Market Street, Courtroom, Knoxville, Tennessee 37902, for the purpose of determining

(1) whether the proposed Settlement of the claims in the Litigation for the sum of $3.5 million in cash

should be approved by the Court as fair, reasonable, and adequate to Members of the Settlement Class;

(2) whether to certify the Settlement Class;
 
(3) whether, thereafter, this Litigation should be dismissed with prejudice pursuant to the terms and

conditions set forth in the Stipulation of Settlement dated March , 2016;

(4) whether the proposed plan to distribute the settlement proceeds (the “Plan of

Allocation”) is fair, reasonable, and adequate and therefore should be approved;

(5) whether the application of Plaintiff’s Lead Counsel for the payment of attorneys’ fees

and expenses incurred in connection with this Litigation should be approved; and

(6) whether the Court should grant Lead Plaintiff reimbursement of his reasonable costs

and expenses (including lost wages) directly related to his representation of the Class.

If you purchased or acquired Provectus Biopharmaceuticals, Inc. common stock between December 17, 2013, and May 22, 2014, inclusive, your rights may be affected by this Settlement. If you have not received a Postcard Notice of the Settlement, you may obtain a copy by contacting KCC, Claims Administrator, c/o [address and toll-free number], or you can download a copy of the Settlement documents, including the Notice of Proposed Settlement of Class Action, Motion for Attorneys’ Fees and Settlement Hearing (the “Internet Long Form Notice”), and the Proof of Claim and Release form at [website].

If you are a Settlement Class Member, in order to share in the distribution of the Net Settlement Fund, you must submit a Proof of Claim and Release form by mail or online such that it is received no later

than ____________, 2016, establishing that you are entitled to recovery.

 
 
 
 


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27677 Re: Lawsuit update: Pending settlement ($3.5 million) reached during mediation but court has to approve the settlement terms leave_the_gun 0 3/10/2016 6:51:19 PM


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