Case Type:
Securities
Status:
Active
Court:
Chancery Court of Delaware
Content

On October 29, 2015, Plaintiffs filed, based on the investigation of counsel, review of publicly available information and internal Company documents produced pursuant to Plaintiffs’ August 7, 2015 and August 25, 2015 demand for the production of books and records pursuant to Section 220 of the Delaware General Corporation Law, the Verified Class Action and Derivative Complaint (the “Complaint”).

The Complaint alleges that Defendants Jones, Davis, Webb and Williams (collectively the “Former Executives”) breached their fiduciary duties and wasted corporate assets. The Complaint alleges that the Former Executives breached their fiduciary duties by causing Certus to retain on unfair terms the services of Integrated Capital Strategies (“ICS”), a company in which the Former Executives had an ownership interest, and by entering into unauthorized leases for the Company’s headquarters and other facilities. The Complaint further alleges that Defendants Biggins, Brown, Johnson, Teegen and Wright (collectively, the “Former Directors”) breached their fiduciary duties by failing to monitor the activities of the Former Executives to ensure that the Former Executives were managing Certus for the benefit of its stockholders, approving the ICS relationship with Certus despite knowing of the conflicts inherent in any ICS transaction, and failing to erect internal controls that would inform them of the Former Executives’ misconduct, including the ICS transactions and the unauthorized leases. The Complaint also alleges that ICS aided and abetted in the Former Executives’ and the Former Directors’ breaches of fiduciary duty and that the Former Executives and ICS tortiously interfered with the Stock Purchase Agreement by retaining ICS on unfair terms.

From February 10, 2016 to November 21, 2016, the parties engaged in extensive discovery, including party and third-party document productions, totaling millions of pages of documents, the deposition of two defendants, and expedited motion practice concerning the entity defendants’ representation and deposition.

On July 13, 2016, Plaintiffs’ Counsel, Individual Defendants’ Counsel and Individual Defendants’ insurance carriers participated in a full-day mediation session in San Francisco, CA, before Robert A. Meyer, Esq. (the “Mediator”). In advance of that session, the Parties submitted and exchanged detailed mediation statements and exhibits, which addressed the issues of liability, causation and damages. The mediation session ended without any agreement being reached.

Thereafter, the Mediator conducted an additional mediation session in New York, NY.

After continued arm’s-length negotiations and discussions between the Parties, all of which were overseen by the Mediator, and based on a proposal by the Mediator, on November 21, 2016, the Parties reached an agreement in principle to settle the Action. On February 8, 2017, the Parties entered into the Stipulations setting forth the final terms and conditions of the Settlement.

On February 20, 2017, the Court entered the Scheduling Order in connection with the Settlement which, among other things, authorized the mailing of the Settlement Notice to be provided to Class Members and Current Stockholders and scheduled the Settlement Hearing to, among other things, consider whether to grant final approval of the Settlement.


Copies of the Settlement Notice, Stipulations, Complaint and Scheduling Order can be found below.