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Msg  28115 of 40309  at  3/17/2016 1:27:36 PM  by

Area51


Lawsuit update: Plaintiff estimates recovery ($3.5 million) represents 5.18% of total maximum damages ($67.5 million) assuming liability was ultimately proven

Plaintiffs and defendants had to decide: should they settle for $3.5 million, roll the dice for a jury trial that may award $67.5 million in damages, or a jury trial that may award zero damages? 
 
 

Lead Plaintiff estimates that the recovery represents approximately 5.18% of the total maximum damages in this Litigation, assuming that liability was ultimately proven and the Court and jury accepted Lead Plaintiff’s damages theory, including proof of loss causation as to all of the share price losses on each of the alleged drop dates. 

Counsel is informed and believes, based upon estimates of the high amount of publicly held shares traded during the Settlement Class Period, that the Settlement Class could include as many as 150,000 members.
 
 

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
 

MEMORANDUM OF LAW IN SUPPORT OF LEAD PLAINTIFF’S UNOPPOSED MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT

 

TABLE OF CONTENTS

I. PRELIMINARY STATEMENT ..........................................................................................1

II. PROCEDURAL HISTORY ..............................................................................................3

III. MEDIATION EFFORTS ................................................................................................. 3

IV. ARGUMENT ...................................................................................................................4

A. The Settlement Should Be Preliminarily Approved as it Is Fair, Reasonable, and in the Best Interests of the Class .4

B. Certification of the Settlement Class Is Appropriate ........................................................7

C. The Proposed Notice Is Adequate ..................................................................................10

1. The Notice Program Provides the Best Notice Practicable Under the Circumstances ...10

2. The Content of the Notices Satisfies All Legal Requirements .........................................11

D. The Court Should Adopt the Deadlines Set Forth in the Preliminary Order ...................13

V. CONCLUSION ................................................................................................................14

 

Excerpts from Plaintiff’s Unopposed Motion For Preliminary Approval of Settlement

 

Finally, the $3.5 million cash settlement is within the range of reasonableness under the
 

circumstances so as to warrant preliminary approval of the Settlement and the issuance of notice to

the Settlement Class. Here, Lead Plaintiff estimates that the recovery represents approximately

5.18% of the total maximum damages in this Litigation, assuming that liability was ultimately

proven and the Court and jury accepted Lead Plaintiff’s damages theory, including proof of loss

causation as to all of the share price losses on each of the alleged drop dates. This percentage

recovery is within the range of other securities class action settlements with similar total damage

amounts. See Wolke Decl. at Ex. 2 (attaching excerpts from Svetlana Starykh and Stefan Boettsich,

Recent Trends in Securities Class Action Litigation: 2015 Full-Year Review (NERA 25 Jan. 2016) at

33, Fig. 29 (the median ratio of settlements between 1996 and 2015 to investment losses was 4.5%

for cases alleging investor losses of between $50 and $99 million); at 34, Fig. 30 (the median ratio of

settlements to investor losses in 2015 was 1.6%)).

 

Numerosity. The proposed Settlement Class is so numerous that joinder of all members is

impracticable. Counsel is informed and believes, based upon estimates of the high amount of

publicly held shares traded during the Settlement Class Period, that the Settlement Class could

include as many as 150,000 members. Because “joinder of all members is impracticable,” the

Settlement Class satisfies Fed. R. Civ. P. 23(a)(1). See In re Sonus Networks, Inc. Sec. Litig., 247

F.R.D. 244, 248 (D. Mass. 2007) (citing other cases and stating that, in a securities class action, a

plaintiff can generally demonstrate numerosity on the basis of a large number of shares outstanding

and traded); Amended Complaint (Dkt. No. 103) at ¶135 (alleging thousands of class members)

 

III. MEDIATION EFFORTS

Prior to reaching the Settlement, the parties engaged in extensive and robust negotiations.

Before attending the mediation session in New York, the parties submitted mediation briefs and

exhibits to Jill Sperber (of Judicate West ADR), a respected mediator experienced in corporate and

securities disputes of this nature. On October 28, 2015, counsel for all parties attended an all-day

mediation session facilitated by Ms. Sperber, during which they exhaustively addressed the pertinent

issues relating to the merits of Lead Plaintiff’s claims and Defendants’ defenses, the relative

strengths and weaknesses of the case, the likely expenses and high risk of protracted litigation, and

the potential sources of recovery.

 

Despite their efforts, the parties did not immediately reach an agreement to settle the

litigation. While settlement communications continued in the days and weeks following the

mediation, with the continued aid of Ms. Sperber, the parties still failed to agree upon a resolution

throughout the month of November. Ultimately, on December 4, 2015, Ms. Sperber presented a

mediator’s proposal to all parties, setting forth principal terms of a proposed settlement. All parties

accepted the mediator’s proposal and continued to negotiate the details of the settlement terms over

the course of the subsequent three months. These negotiations were conducted in good faith and at

arm’s length and resulted in the terms and conditions set forth in the Stipulation and its exhibits.

V. CONCLUSION

The parties respectfully request that this Court enter the Preliminary Order submitted

herewith, and: (i) certify the Settlement Class for settlement purposes; (ii) preliminarily find that the

Settlement is fair, reasonable, and adequate; and (iii) find that notification of the terms of the

Settlement and of Class Members’ rights in connection therewith is warranted; and (iv) find that the

proposed Notice program is sufficient and comports with all applicable legal requirements.

 

DATED: March 14, 2016 GLANCY PRONGAY & MURRAY LLP

 


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Msg # Subject Author Recs Date Posted
28117 Re: Lawsuit update: Plaintiff estimates recovery ($3.5 million) represents 5.18% of total maximum damages ($67.5 million) assuming liability was ultimately proven JerryC 0 3/17/2016 2:03:32 PM


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