Frequently Asked Questions

  1. Why is the Securities Class Action a class action and what is the Securities Class Action about?
  2. Why is the Derivative Action referred to as a derivative action and what is the Derivative Action about?
  3. Why are there settlements?
  4. How do I know if I am part of the Securities Settlement?
  5. I’m still not sure if I am included.
  6. What does the Securities Settlement provide?
  7. How much will my payment be in the Securities Settlement?
  8. How can I receive a payment in the Securities Settlement?
  9. When will I receive my payment in the Securities Settlement?
  10. What am I giving up to receive a payment in the Securities Settlement?
  11. What is the Company giving up to receive the benefits of the Derivative Settlement?
  12. How do I exclude myself from the Securities Settlement?
  13. If I do not exclude myself from the Securities Settlement, can I sue the Defendants for the same thing later?
  14. If I exclude myself from the Securities Settlement, can I receive money from the class action settlement?
  15. Can I exclude myself from the Derivative Settlement?
  16. Do I have a lawyer in the Securities Class Action?
  17. What happens if I do nothing at all?
  18. How will the lawyers be paid?
  19. How do I notify the Courts that I do not like either of the two settlements, the plan of allocation, or the requests for attorneys’ fees and reimbursement of expenses?
  20. When and where will the Courts decide whether to approve the settlements and the requested attorneys’ fees and expenses?
  21. Did I have to come to the hearings?
  22. Could I have spoken at the hearing?
  23. Are there more details about the settlements?



1. Why is the Securities Action a Class Action and what is the Securities Action about?

Class actions are generally used in lawsuits that affect a large number of individuals; in effect, the class action operates to consolidate into a single action all of the claims of individuals allegedly harmed by the same conduct or course of conduct, thus alleviating the need for members of the class to file their own individual lawsuits to recover for the harm alleged. Once the class is certified, the Court is empowered to resolve all issues on behalf of members of the class, except for those members of the class, if any, who specifically choose to exclude themselves from the Class.

As part of the settlement approval process, Lead Plaintiffs in the Securities Class Action asked the Court to certify a Class for settlement purposes only. The Class consists of all persons or entities other than Defendants who purchased or otherwise acquired Imperial securities either (i) pursuant and/or traceable to the registration statement issued in connection with Imperial’s IPO; (ii) on the open market between February 7, 2011 and February 21, 2012, inclusive (the “Class Period”).

All Class Period purchasers of Imperial common stock are members of the Class, except those persons who timely filed a request for exclusion by November 25, 2013. All persons who do did not timely exclude themselves from the Class are bound by the Securities Settlement and its accompanying Release.

The Securities Class Action alleges violations of the federal securities laws (specifically, Sections 11 and 15 of the Securities Act of 1933 (15 U.S.C. §§ 77k and 77o)) against Defendants.

Defendant Imperial is a Florida corporation with its principal executive offices located at 701 Park of Commerce Boulevard, Suite 301, Boca Raton, Florida 33487. According to Imperial, the company is a specialty finance company that, through its operating subsidiaries, provides customized liquidity solutions to owners of illiquid financial assets. During the Class Period, Imperial common stock traded on the New York Stock Exchange (NYSE) under the ticker symbol “IFT.”

Lead Plaintiffs in the Securities Class Action allege that, during the Class Period, Imperial made materially false and misleading statements and omitted material information relating to Imperial’s acquisition and/or financing of life insurance policies, in connection with its IPO. Defendants deny that they made any such misleading statements and further deny that Imperials’ stock price was artificially inflated as a result of any statements.

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2. Why is the Derivative Action referred to as a derivative action and what is the Derivative Action about?

In contrast to securities class actions, derivative actions allow a corporation’s shareholders to sue to recover damages on behalf of the corporation and to protect the interests of the corporation from future harm caused by the corporation’s board of directors, management, third parties or others in circumstances where the corporation’s board of directors and management are unlikely, or have refused, to assert the corporation’s rights.

All current shareholders of Imperial common stock are bound by the Derivative Settlement and its accompanying Release.

The Derivative Action alleges that the Derivative Defendants breached their fiduciary duties and/or aided and abetted the breach of fiduciary duties to Imperial and its shareholders by knowingly or recklessly approving the Company’s improper practices in the operation of the Company’s core premium financing business, failing to oversee in good faith the Company’s operational and internal controls including compliance with all applicable laws, and knowingly or recklessly ignoring red flags that would have alerted them to the violations of law .

Derivative Plaintiffs also claim that Defendants’ alleged misconduct has caused severe and irreparable injury and damages to the Company, particularly, reputational damage to the Company including damage to the price of the common stock, costs, fees and expenses incurred in connection with the various investigations, the $8 million penalty paid to various federal agencies, the revenue lost and expenses incurred (including the write down in the value of the policies still owned by the Company) as a result of the termination of the Company’s premium finance business; and the costs, fees and expenses incurred in connection with the Securities Class Action.

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3. Why are there settlements?

The Settlements resulted from years of litigation and extensive arm’s-length negotiations among Lead Counsel, Derivative Counsel and counsel for Defendants with respect to a compromise and settlement of the Securities Class Action and Derivative Actions, with a view towards settling the issues in dispute and achieving the best relief possible consistent with the interests of the Class, with respect to the Securities Class Action, and the current shareholders of Imperial, with respect to the Derivative Action.

Before agreeing to the Settlements, Lead Counsel and Derivative Counsel conducted an extensive investigation into the events and transactions underlying the claims alleged in their complaints. This investigation included the review of approximately 2,000,000 pages of documents provided by Defendants and confirmatory interviews with high-ranking executives of Imperial. Lead Counsel analyzed potential claims and researched the applicable law with respect to the claims asserted and the Defendants’ potential defenses thereto.

By agreeing to the Settlements, Lead Plaintiffs, Derivative Plaintiffs and Defendants avoid the costs and risks of a trial. Lead Plaintiffs believe that the claims asserted against the Securities Defendants have merit; Derivative Plaintiffs believe that the claims asserted against the Derivative Defendants have merit; Defendants believe the claims have no merit. However, all parties recognize the uncertain outcome and trial risks in complex lawsuits like these, and the expense and length of continued proceedings necessary to complete the litigation through trial and appeals. Lead Plaintiffs have also taken into account the issues that would have to be decided by a jury, including whether the Defendants violated the securities laws or otherwise engaged in any wrongdoing, whether the misrepresentations and omissions alleged by the Lead Plaintiffs were material, false, misleading or otherwise actionable under the securities laws, and the method for determining whether, and the extent to which, purchasers of Imperial Holdings, Inc. stock suffered injury and damages that could be recovered at trial. Derivative Plaintiffs have also taken into account the issues that would have to be decided by a jury, including whether the Derivative Defendants violated fiduciary duties owed to Imperial and/or aided and abetted the violations thereof, whether the Derivative Defendants engaged in gross mismanagement of Imperial, whether the Derivative Defendants were unjustly enriched, and the amount of damages caused by the alleged violations of fiduciary duties and/or the aiding and abetting thereof.

Lead Plaintiffs and Derivative Plaintiffs believe that the Settlements provide substantial benefits as compared to the risk that all or some of the claims in the Securities Class Action and the Derivative Action could be dismissed in response to Defendants’ anticipated motions to dismiss and for summary judgment, or the risk that a similar, smaller or no recovery would be achieved after a trial and appeals, possibly years in the future, in which the Defendants would have the opportunity to assert substantial defenses to the claims asserted against them.

Considering these factors, and balancing them against the immediate, certain and substantial benefits that the Class and Imperial shareholders will receive as a result of the Settlements, Lead Plaintiffs and Derivative Plaintiffs determined that the Settlements described herein are fair, reasonable and adequate, and that it is in the best interests of the Class, with respect to the Securities Settlement, and the current shareholders of Imperial, with respect to the Derivative Settlement, to settle the claims against the Defendants on the terms set forth in the Stipulation and the Notice.

The Settlements are not evidence of, an admission of, or a concession on the part of Defendants of any fault or liability whatsoever on the part of any Defendant, or any infirmity in any defenses they have asserted or intended to assert in the Securities Class Action or the Derivative Action. However, the Defendants consider it desirable, and in their best interests, that the claims against them be dismissed on the terms set forth in the Stipulation to avoid further expense and protracted litigation, taking into account the uncertainty and risks inherent in any litigation.

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4. How do I know if I am part of the Securities Settlement?

The Class includes all persons or entities who purchased or otherwise acquired Imperial securities either: (i) pursuant and/or traceable to the registration statement issued in connection with Imperial’s IPO; or (ii) on the open market between February 7, 2011 and February 21, 2012, inclusive (the “Class Period”).

Excluded from the Class are all named defendants and all individuals who were officers and directors of Imperial on or before June 30, 2012, members of the immediate families of each, legal representatives, heirs, successors or assigns of each, and any entity in which any named defendant has or had a controlling interest.

Also excluded from the Class are persons who excluded themselves by filing a request for exclusion in accordance with the requirements set forth in the Notice as described in Question 12.

If one of your mutual funds purchased or owns shares of Imperial common stock, that alone does not make you a Class Member. You are a Class Member only if you directly purchased or otherwise acquired shares of Imperial common stock during the Class Period or pursuant to the IPO. Contact your broker to see whether you purchased or otherwise acquired Imperial stock during that period.

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5. I’m still not sure if I am included.

If you are still not sure whether you are included, you can ask for free help. You can call Lionel Z. Glancy of Glancy Binkow & Goldberg LLP at 1-888-773-9224 for more information. Or you can fill out and return the claim form described in Question 8, to see if you qualify.

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6. What does the Securities Settlement provide?

The Securities Settlement will result in a fund of $13,600,000 consisting of $12,000,000 in cash and $1,600,000 in Imperial warrants, for the benefit of investors. The balance of this fund after payment of Court-approved attorneys’ fees and expenses, and reimbursement of reasonable incentive awards for the Lead Plaintiffs, and the costs of claims administration, including the costs of printing and mailing the Notice and the cost of publishing the newspaper notice (the “Net Settlement Fund”) will be divided among all eligible Class Members who send in valid claim forms.

As part of the Securities Settlement, Imperial will issue two million warrants to purchase Imperial common stock pursuant to §3(a)(10) of the Securities Act of 1933. The warrants shall have an exercise price of $10.75 and shall expire five years after the date on which they are distributed to Class Members. For additional information regarding the warrants, please contact Lead Counsel for a copy of the Warrant Agreement.

No fractional Imperial warrants will be issued. The calculation of the number of warrants to be distributed will be rounded up or down to the nearest whole warrant.

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7. How much will my payment be in the Securities Settlement?

Your share of the Net Settlement Fund will depend on the number of valid claim forms that Class Members send in, the number of Imperial common shares you purchased or acquired during the relevant period, and the timing of your purchases and sales. You will not receive a payment, however, if your proportionate share of the Net Settlement Fund is less than $10.00.

By following the Plan of Allocation described in the Notice you can calculate your “Recognized Claim.” Upon approval by the Securities Court, the Settlement Administrator will distribute the Net Settlement Fund; that is, the Gross Settlement Fund, less taxes owed, all administrative costs, including the costs of notice, and attorneys’ fees and expenses, as awarded by the Securities Court, according to the Plan of Allocation.

The Settlement Administrator shall determine each Authorized Claimant’s pro rata share of the Net Settlement Fund based upon each Authorized Claimant’s “Recognized Claim.” The Recognized Claim formula is not intended to be an estimate of the amount of what a Class Member might have been able to recover after a trial; nor, is it an estimate of the amount that will be paid to Authorized Claimants pursuant to the Settlement. The Recognized Claim formula is the basis upon which the Net Settlement Fund will be proportionately allocated to the Authorized Claimants.

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8. How can I receive a payment in the Securities Settlement?

To qualify for payment, you must be an eligible Class Member, have sent in a valid Proof of Claim and Release form postmarked no later than January 15, 2014, and properly documented your claim as requested in the Claim Form.

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9. When will I receive my payment in the Securities Settlement?

The Securities Court held a hearing on December 16, 2013, and approved the Securities Settlement. There may be appeals after the Court approved the Settlement. It is always uncertain when these appeals will be resolved, and resolving them can take time, perhaps more than a year. Even if no appeals are filed, it will take a significant amount of time for the Settlement Administrator to process all of the Proof of Claim and Release forms and determine the ultimate distribution amounts. Thank you for your patience.

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10. What am I giving up to receive a payment in the Securities Settlement?

Unless you timely excluded yourself from the Class by the November 25, 2013 deadline, you are a Member of the Class and are bound by the Releases of claims against the Defendants. That means that you cannot sue, continue to sue, or be part of any other lawsuit against the Defendants about the Plaintiffs’ Released Claims in this case. It also means that all of the Securities Court’s orders apply to you and legally bind you and you will release your claims in this case against the Defendants. The terms of the Plaintiffs’ Released Claims are included in the claim form. Note: If you objected, you are still bound by the terms of the Settlement in the same way as Members of the Class who did not object.

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11. What is the Company giving up to receive the benefits of the Derivative Settlement?

With the approval of the Derivative Settlement by the Derivative Court, Imperial, on behalf of itself or anyone acting or claiming to act on behalf of Imperial, gave up further prosecuting any claims, whether derivatively or directly, raised in the Derivative Action and is bound by the Releases of claims against the Derivative Defendants. That means that Imperial, on behalf of itself or anyone acting or claiming to act on behalf of Imperial, cannot sue, continue to sue, or be part of any other lawsuit against the Derivative Defendants about the Plaintiffs’ Released Claims in this case.

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12. How do I exclude myself from the Securities Settlement?

To have excluded yourself from the Class, you must have sent a letter by mail stating that you wanted to be excluded from Martin Fuller v. Imperial Holdings, et al., Case No. 11-81184-CIV-MARRA. You must have included your name, address, telephone number, your signature, and the number of shares and price paid for each share purchased of Imperial common stock you purchased or acquired between February 7, 2011 and February 21, 2012, inclusive, the number of shares sold during this time period, if any, and the dates of such purchases and/or sales. You must have mailed your exclusion request so that it was received no later than November 25, 2013 to:

Fuller v. Imperial Holdings, Inc.
Settlement Administrator
c/o GCG
P.O. Box 35050
Seattle, WA 98124-3508
1-866-280-1862

You could not exclude yourself on the phone or by e-mail. If you asked to be excluded, you are not eligible to receive any settlement payment, and you cannot object to the Securities Settlement. You will not be legally bound by anything that happens in the class action lawsuit.

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13. If I do not exclude myself from the Securities Settlement, can I sue the Defendants for the same thing later?

No. Unless you excluded yourself from the Class, you gave up any right to sue the Defendants or their Released Persons for the Plaintiffs’ Released Claims in the Securities Settlement. If you have a pending lawsuit against any of the Defendants, speak to your lawyer in that case immediately. Remember, the exclusion deadline was November 25, 2013.

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14. If I exclude myself from the Securities Settlement, can I receive money from the class action settlement?

No. If you excluded yourself, do not send in a Claim Form.

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15. Can I exclude myself from the Derivative Settlement?

No. Because the Derivative Action is on behalf of Imperial (not the Class Members), you cannot exclude yourself from the Derivative Settlement.

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16. Do I have a lawyer in the Securities Class Action?

The Court appointed the law firm of Glancy Binkow & Goldberg LLP to represent you and other Class Members. These lawyers are called Lead Counsel. You will not be personally liable for the fees and expenses incurred by these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense.

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17. What happens if I do nothing at all?

If you fail to file a timely Proof of Claim and Release form, you will receive no money from the Securities Settlement. Unless you excluded yourself from the Securities Settlement, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendants or the Released Parties for the claims released by the Securities Settlement ever again.

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18. How will the lawyers be paid?

The Securities Settlement: The Securities Court awarded Lead Counsel $3.6 million from the Settlement Fund and 30% of the two million warrants to be issued by Imperial as part of the Settlement, for attorneys’ fees, which sum the Securities Court found to be fair and reasonable. The Securities Court awarded Lead Counsel $203,282.80 from the Settlement Fund in reimbursement of expenses, which sum the Securities Court found to be fair and reasonable. Class Members are not personally liable for any such fees or expenses.

These attorneys’ fees and expenses will be the only payment to Lead Plaintiffs’ Counsel for their efforts in achieving this Settlement and for their risk in undertaking this representation on a wholly contingent basis. Since the case began in 2011, Lead Plaintiffs’ Counsel has conducted all of the investigation, briefing and motions practice necessary to prepare the case for trial, performed document review, and consulted experts regarding the damages. Lead Plaintiffs’ Counsel have expended to date more than 4,750 hours of attorney time in prosecuting the Class’ claims. The fees compensate Lead Plaintiffs’ Counsel for their work in achieving the Settlement Fund.

The Derivative Settlement: The Derivative Court awarded Derivative Counsel attorneys’ fees and reimbursed expenses. These fees and expenses, paid by Imperial, will not be deducted from the Settlement Fund in the Securities Settlement. The attorneys’ fees and expenses are the only payment to Derivative Counsel for their efforts in achieving the Derivative Settlement and for their risk in undertaking this representation on a wholly contingent basis. Derivative Counsel has expended to date more than 2,740 hours of attorney time in prosecuting the Derivative claims. Furthermore, the terms of Derivative Counsel’s fee and expense application were considered and approved by Imperial’s current Board of Directors.

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19. How do I notify the Courts that I do not like either of the two settlements, the plan of allocation, or the requests for attorneys’ fees and reimbursement of expenses?

If you are a Class Member you could have objected to the Settlement of the Securities Class Action if you did not like any part of it. If you are a current Imperial shareholder, you could have objected to the Derivative Settlement if you did not like any part of it.

To object, you must have sent a letter saying that you are a Class Member and/or a current Imperial shareholder and that you objected to the Securities Settlement and/or the Derivative Settlement, and stated the reasons why you object. You should have also stated whether you were objecting to the settlement in Martin Fuller v. Imperial Holdings, et al., Case No. 11-81184-CIV-MARRA (S.D. Fla) (the Securities Class Action) and/or Andrzejczyk v. Mitchell, 2012 CA 013286 (Fla. 15th Jud. Cir. Ct.) (the Derivative Action).

In your objection, you must have included your name, address, telephone number, and your signature. For the Securities Class Action, you must have also included information concerning your purchase(s) and sale(s) in Imperial common stock, including the number of shares and the dates and prices of each purchase and sale. In order for your objection to have been considered, you must have filed and served the objection no later than November 25, 2013, to the Securities Court, the Lead Counsel Designee and the Defendant Imperial's Counsel Designee (the appropriate addresses are listed below).

If you wished to object to the settlement of the Derivative Action, you must have included documentation showing you are a current shareholder of Imperial. In order for your objection to have been considered, you must have mailed the objection postmarked no later than November 25, 2013, to the Derivative Court, the Derivative Counsel Designee and the Defendants’ Counsel Designee (the appropriate addresses are listed directly below).

SECURITIES CLASS ACTION:
Securities Court:

Clerk of the Court
Paul G. Rogers Federal Building and
U.S. Courthouse
701 Clematis Street
West Palm Beach, Florida 33401
Lead Counsel Designee:

Lionel Z. Glancy, Esq.
GLANCY BINKOW & GOLDBERG LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
Defendant Imperial’s Counsel Designee:

Stanley H. Wakshlag
KENNY NACHWALTER P.A.
1100 Miami Center
201 South Biscayne Boulevard
Miami, FL 33131
DERIVATIVE ACTION:
Derivative Court:

Clerk of the Court of the 15th Judicial Circuit
in and for Palm Beach County, Florida
205 North Dixie Hwy
West Palm Beach, FL 33401
Plaintiff’s Counsel in the
Derivative Action:


Joseph H. Weiss, Esq.
WEISSLAW LLP
1500 Broadway, 16th Floor
New York, New York 10036

Robert Weiser
THE WEISER LAW FIRM, P.C.
22 Cassatt Avenue
Berwyn, PA 19312
Defendants' Counsel in the
Derivative Action:


Stanley H. Wakshlag
KENNY NACHWALTER, P.A.
1100 Miami Center
201 South Biscayne Boulevard
Miami, FL 33131

Larry Sumpf
BLACK, SREBNICK, KORNSPAN
& STUMPF, P.A.
201 South Biscayne Boulevard
Miami, FL 33131

Jonathan Etra
BROAD AND CASSEL
2 South Biscayne Blvd.
Miami, FL 33131

Please note that the motions in support of the final approval of the Settlements and the request for attorneys’ fees are available from Lead Counsel and the Securities Court (as to the Securities Class Action), Derivative Counsel and the Derivative Court (as to the Derivative Action) and the Settlement Administrator (for both actions).

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20. When and where will the Courts decide whether to approve the settlements and the requested attorneys’ fees and expenses?

The Courts held two Settlement Fairness Hearings. Pursuant to the Securities Settlement Hearing held on December 16, 2013, the Securities Court granted final approval.

Pursuant to the Derivative Settlement Hearing held on December 17, 2013, the Derivative Court granted final approval.

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21. Did I have to come to the hearings?

No. Counsel answered questions the Courts may have had. If you sent an objection, you did not have to come to Court to talk about it. As long as you properly filed and served your written objection on time, the Court will have considered it.

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22. Could I have spoken at the hearing?

In order to have spoken at the Securities Settlement Hearing, your notice of intention to appear must have been served no later than November 25, 2013, to the Securities Court, and all counsel in the Securities Settlement at the addresses listed in Question 19.

In order to have spoken at the Derivative Settlement Hearing, your notice of intention to appear must have been served no later than November 25, 2013, to the Derivative Court and all counsel in the Derivative Settlement at the addresses listed in Question 19.

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23. Are there more details about the settlements?

The Notice summarizes the Settlements. More details are contained in the Settlement Agreement for the Securities Settlement and the Derivative Settlement, which are available here or from the Counsel listed below. If you have questions regarding how to obtain copies of documents related to these settlements, completing your Proof of Claim and Release form, correspondence you have received from the Settlement Administrator, or the calculation of your Recognized Claim, you may contact the Settlement Administrator for the distribution of the Settlement Fund toll free at (866) 280-1862 or write to the Settlement Administrator at the address listed below. Additionally, you can contact the counsel for Lead Plaintiffs or counsel for Derivative Plaintiffs for a copy.

Settlement Administrator:

Fuller v. Imperial Holdings, Inc.
Settlement Administrator
c/o GCG
P.O. Box 35050
Seattle, WA 98124-3508
1 (866) 280-1862
Lead Counsel Designee:

Lionel Z. Glancy, Esq.
Glancy Binkow & Goldberg LLP
1925 Century Park East, Suite 2100
Los Angeles, CA 90067
settlements@glancylaw.com
Derivative Counsel Designee:

Joseph H. Weiss, Esq.
WeissLaw LLP
1500 Broadway, 16th Floor
New York, NY 10036
settlements@weisslawllp.com

DO NOT TELEPHONE EITHER OF THE COURTS REGARDING THE NOTICE

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Important Dates
DateDeadline
January 15, 2014
[Expired]
Claim Form Deadline
Securities Settlement Only
(postmarked)
November 25, 2013
[Expired]
Exclusion Deadline
Securities Settlement Only
(received)
November 25, 2013
[Expired]
Objection Deadline
Securities and Derivative Settlements
(filed and received)
December 16, 2013
at 9:00 a.m.
[Approved]
Settlement Fairness Hearing for the Securities Settlement
December 17, 2013
at 9:30 a.m.
[Approved]
Settlement Fairness Hearing for the Derivative Settlement

For More Information

  • Please consult the Notice for more information on the Securities Settlement and the Derivative Settlement.