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Full title: Motion to Approve Compromise under Rule 9019 Joint Motion Pursuant to Section 105 of the Bankruptcy Code and Bankruptcy Rules 9019 and 7023 for an Order (I) Certifying a Class for Settlement Purposes, (II) Appointing Plaintiff Helmut Thomay as Class Representative and Plaintiffs Counsel as Class Counsel, (III) Preliminarily Approving Settlement, (IV) Approving Class Notice, And (V) Scheduling Fairness Hearing Filed by Klausner Lumber One LLC. Hearing scheduled for 4/15/2021 at 11:00 AM at US Bankruptcy Court, 824 Market St., 6th Fl., Courtroom #3, Wilmington, Delaware. Objections due by 4/6/2021. (Amer, Nader) (Entered: 03/08/2021)
Document posted on Mar 7, 2021 in the bankruptcy, 28 pages and 0 tables.
Bankrupt11 Summary (Automatically Generated)
Class Counsel Fees and Expenses: Subject to the approval of the Bankruptcy Court, Class Counsel shall receive attorneys’ fees of one-third (1/3) of the Settlement Amount, net of litigation expenses (including the costs associated with the production and mailing of the Class Notices) not to exceed $30,000.00, and the Class Representative’s Service Payment.The attorneys of Raisner Roupinian LLP, proposed lead Class Counsel, have been appointed class counsel in more than 100 active or settled certified or putative WARN class actions, including the following in district and bankruptcy courts in the Third Circuit: Etzelberger v. FAH Holdings, Inc., Case No. 13-13087-BLS (Bankr.Girsh factors strongly support approval of the Settlement Agreement: (i) further litigation will be complicated, protracted and expensive, (ii) Plaintiff supports the Settlement Agreement and Class Counsel believe that the bulk of the other Class Members will have a favorable reaction to the Settlement Agreement and will not object to it, (iii) the Settlement Agreement was reached after the essential facts had been thoroughly investigated by Class Counsel and the Parties had shared their respective views of the case during mediation and subsequent settlement negotiations, (iv) the risk that Plaintiff would be unable to establish liability was significant because of the defenses asserted by Debtor if litigation had continued, and (v) when considered in light of the best possible recovery and the attendant risks, the Settlement falls well within the range of reasonableness. Most recently, in a WARN case that Class Counsel settled in 2020, Etzelberger v. FAH Holdings, Inc., Case No. 13-13087-BLS (Bankr. D. Del.), the Bankruptcy Court granted final approval of a WARN settlement of approximately $1.9 million, including attorneys’ fees of 33⅓% and a service award of $20,000 to the Class Representative.To date, Class Counsel has incurred approximately $21,000 in expenses prosecuting the Action and expects to incur additional expenses in connection with seeking preliminary and final approval of the Settlement, mailing the Class Notice, and communicating with Class Members regarding the Settlement.
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Document ContentsIN THE UNITED STATES BANKRUPTCY COURT FOR THE DISTRICT OF DELAWARE
KLAUSNER LUMBER ONE LLC,
|HELMUT THOMAY and CORNELIUS
TURNER, on behalf of themselves and all others
KLAUSNER LUMBER ONE LLC, KLAUSNER
LUMBER TWO LLC, KLAUSNER HOLDING
USA, INC., and KLAUSNER TRADING USA,
1entry of an order: (a) approving Settlement Agreement (attached hereto as Exhibit 1) (the “Settlement Agreement”), (b) preliminarily approving the Settlement Agreement pursuant to Bankruptcy Rule 7023, (c) approving the form and manner of notice of settlement, (d) scheduling a Fairness Hearing to consider final approval of the Settlement Agreement, (e) entry of a final order, approving the Settlement Agreement following the Fairness Hearing, and (f) granting related relief. In support of the Motion, the Parties respectfully represent as follows: JURISDICTION 1. This Court has jurisdiction over the Motion under 28 U.S.C. § 1334. 2. This matter is a core proceeding within the meaning of 28 U.S.C. § 157(b)(2). 3. Venue is proper under 28 U.S.C. §§ 1408 and 1409. The statutory predicates for the relief sought herein are section 105 of the Bankruptcy Code, and Bankruptcy Rules 9019 and 7023. BACKGROUND 4. On March 27, 2020, Johnnie Raymond and other individuals including Plaintiff and Class Representative Helmut Thomay, on behalf of himself and others similarly situated, filed a First Amended Class Action Complaint in the United States District Court for the Middle District of Florida, Jacksonville Division, for alleged violation of WARN, FLSA, and unpaid wage claims, titled Johnnie Raymond, et al. v. Klausner Lumber One LLC, Klausner Lumber Two LLC, Klausner Holding USA, Inc., Leopold Stephan, Christoph Schaetz and David Larkin (3:20-cv-00287-BJD-MCR) (“Florida Complaint”). 5. On April 30, 2020, KL1 sought voluntary relief under chapter 11 of the Bankruptcy Code before the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”), Bankruptcy Case Number 20-11033-KBO (the “Bankruptcy Case”).
26. On May 6, 2020, Plaintiffs’ counsel, Jay Lechner, filed a Notice of Appearance and Demand for Service of Papers in the Bankruptcy Case on behalf of approximately 125 individually identified former employees (D.I. 16). 7. On May 18, 2020, Plaintiffs Helmut Thomay and Cornelius Turner filed a class action adversary proceeding complaint (“Adversary Proceeding” and together with the Florida Complaint, the “Action”) against Debtor KL1, Klausner Lumber Two LLC, Klausner Holding USA, Inc., and Klausner Trading USA, Inc. (collectively, “Defendants”) in the Bankruptcy Court seeking WARN Act backpay and benefits for alleged unpaid wages pursuant to the North Carolina Wage and Hour Act, § 95-25.3 (“NC Wage Act”) and the Florida Constitution, and payment of accrued but unused paid time off for the former employees of Defendants with priority treatment under sections 507(a)(4) and 507(a)(5) of the Bankruptcy Code for the amounts up to the allowed cap, with the balance treated as general unsecured claims (Adv. No. 20-50602-KBO).1 8. In the complaint filed in the Adversary Proceeding, Plaintiffs alleged that (a) beginning on March 16, 2020, Defendants ordered mass layoffs or plant closings that resulted in the terminations of their employment, and that they and the Class Members (defined below) were not provided 60 days’ notice as required by the federal WARN Act, 29 U.S.C. § 2101, et seq., and (b) Defendants failed to pay them and the other similarly situated employees’ wages for their final weeks of work performed between approximately February 29, 2020 and March 16, 2020, in alleged violation of state wage laws of Florida and North Carolina (D.I. 71), each of which allegations the Defendants deny. 1 On June 30, 2020, Defendant Klausner Lumber Two LLC (“KL2”) filed its own chapter 11 bankruptcy case in the Bankruptcy Court, which case was assigned Bankruptcy Case Number 20-11518-KBO. Because the chapter 11 cases of KL1 and KL2 are not substantively consolidated, Plaintiffs filed an adversary proceeding in the KL1 Bankruptcy Case and a class proof of claim in the KL2 case naming all Defendants, including KL1 and KL2, in each.
39. On May 21, 2020, the Plaintiffs in the Adversary Proceeding (collectively, the “WARN Plaintiffs”), by Helmut Thomay, was appointed to the Official Committee of Unsecured Creditors in the Bankruptcy Case (D.I. 82). 10. On May 29, 2020, the Florida Complaint was stayed and the case in which it was filed was administratively closed pending the outcome of the ongoing bankruptcy litigation (D.I. 106). 11. The Parties thereafter entered into a series of stipulations extending the time for Defendants to respond to Plaintiffs’ complaint in the Adversary Proceeding in order, inter alia, to permit the Parties to engage in informal discovery. 12. On November 30, 2020, the Bankruptcy Court granted the Parties’ Agreed Order (I) Appointing Mediator, (II) Referring Certain Matters to Mediation, and (III) Granting Related Relief Filed Klausner Lumber One, LLC, Klausner Lumber Two, LLC (Adv. D.I. 46). 13. On December 11, 2020, the Parties attended a mediation with former Chief Judge Kevin Gross (Ret.), but were unable to resolve this action at mediation, however, following the mediation, the Parties continued to engage in settlement discussions with Judge Gross’s assistance. 14. In order to avoid extensive, costly and uncertain litigation, the Parties desire to enter into a Settlement Agreement of the Action, subject to the Bankruptcy Court’s approval, to resolve any and all demands, claims, damages and causes of action, present and future, arising out of or relating in any way to claims by employees of KL1, including WARN claims and claims for unpaid or unremitted wages and benefit amounts. ESSENTIAL TERMS OF THE PROPOSED SETTLEMENT 15. The Parties have reached an agreement, subject to this Court’s approval, the terms of which have been refined and memorialized in the Settlement Agreement (attached as Exhibit
41 hereto). The essential terms of the Settlement Agreement are as follows2: a) Definition of the Class: The term “Class” shall mean: All persons who were employed with Klausner Lumber One LLC located at 17152 46th Trace, Live Oak, Florida 32060, from February 15, 2020 up to and including March 16, 2020, excluding persons who voluntarily quit employment or who were involuntarily terminated from employment for cause during this time period, as listed on Exhibit A of the Settlement Agreement (each person who is part of the Class, a “Class Member”, and collectively, the “Class Members”). b) Settlement Amount: On the Effective Date (defined below), the Class shall be awarded an allowed unsecured claim with the priority set forth in section 507(a)(4) of the Bankruptcy Code in the amount of $1,411,506.00 less (a) ninety percent of the WARN Back Pay (as defined herein) for any person who is eligible to participate in the Class and who has post-marked a timely and valid request to opt out of the Class (each such person, a “Class Opt Out”) and (b) each Class Opt Out’s (i) unpaid wages owed from February 28, 2020 through March 16, 2020, (ii) accrued but unused paid time off, (iii) unremitted deductions, and (iv) unpaid compensation for medical expenses, if any, from which the Class Representative Service Payment and the Class Counsel Fees and Expenses, as approved by the Bankruptcy Court, shall be paid, with the balance distributed to the Settlement Class on a pro rata basis pursuant to the Plan, subject to Section 8 of the Settlement Agreement. c) Net Settlement Amount: The Settlement Amount minus the Class Representative’s Service Payment and Class Counsel’s Fees and Expenses is the Net Settlement Amount. d) Individual Class Member Distributions: Each individual Class Member in the Settlement Class shall be entitled to receive such Class Member’s Pro Rata Share from the Net Settlement Amount, as defined below (the “Distribution”). For the avoidance of doubt, the Settlement Amount will first be reduced by the Class Representative’s Service Payment and the Class Counsel Fees and Expenses (“Net Settlement Amount”). The remainder, which is the Net Settlement Amount, shall, subject to Section 8 of the Settlement Agreement, be allocated to each Class Member in the amount of his or her Pro Rata Share, less applicable taxes and required withholdings (as described in Section 12 of the Settlement Agreement), and less any garnishment amount in accordance with any garnishment order in effect for any Class Member receiving a Distribution. e) Taxation of the WARN Claim Distribution: The Debtor or Liquidating Trustee shall be responsible for calculating, withholding and remitting payment of all payroll tax withholdings to the taxing authorities in accordance with applicable law. Payroll tax withholding shall include all applicable federal, state and local income taxes, and statutory taxes including, without limitation, Federal Insurance Contribution Act and federal and state unemployment insurance amounts associated with the distributions to Class Members receiving payments under 2 This is a summary of the terms of the Settlement Agreement (Exh. 1 to the Motion). In the event there is any ambiguity or inconsistency, the terms set forth in Exhibit 1 shall govern. Capitalized terms not otherwise defined herein shall have the meanings given to such terms in the Settlement Agreement.
5the Settlement Agreement (collectively, “Payroll Taxes”). The Debtor or Liquidating Trustee shall determine the amount of any Payroll Taxes that will become due and owing and shall be withheld. f) Responsibilities of Class Counsel: In addition to calculating each Class Member’s Pro Rata Share, Class Counsel shall be responsible for the production and mailing of all notices required to be provided to the Class Members (the “Class Notices”). Class Counsel shall receive written approval from the Debtor’s Counsel as to the form and substance of the Class Notices prior to disseminating such notices. The address of Class Counsel will be used as the return address for the Class Notices, and Class Counsel will respond to all inquiries of the Class arising from or related to the Settlement Agreement. Class Counsel shall mail the Class Notices by first class mail to the Class Members listed on Exhibit A of the Settlement Agreement. If a Class Notice is returned as undeliverable, Class Counsel shall mail the Class Notice to the corrected address of the Class Member as may be determined by Class Counsel through a search of a national database or as may otherwise be obtained by the Parties. g) Class Representative Service Payment: Subject to approval of the Bankruptcy Court, Plaintiff Helmut Thomay, as the Class Representative, shall be entitled to a one-time payment of $20,000.00, payable from the Settlement Amount in addition to his pro rata share of the Net Settlement Amount. h) Class Counsel Fees and Expenses: Subject to the approval of the Bankruptcy Court, Class Counsel shall receive attorneys’ fees of one-third (1/3) of the Settlement Amount, net of litigation expenses (including the costs associated with the production and mailing of the Class Notices) not to exceed $30,000.00, and the Class Representative’s Service Payment. i) Effective Date: The Settlement Agreement shall become effective (the “Effective Date”) when (a) the Approval Order, attached hereto as Exhibit 4, is entered by the Bankruptcy Court and such order is not stayed by order of any court of competent jurisdiction, and (b) the Joint Chapter 11 Plan for Klausner Lumber One LLC Proposed by the Debtor and the Official Committee of Unsecured Creditors (as the same may be amended, modified, or supplemented as long as such changes are consistent with the terms of the Settlement Agreement, the “Plan”), is approved by the Bankruptcy Court and becomes effective in accordance with its terms. j) Release of Defendants and Related Parties: Except for the rights and obligations arising out of, provided for, or reserved in the Settlement Agreement, upon the Effective Date, Plaintiff/Class Representative as well as all other Class Members in the Settlement Class for and on behalf of themselves and their respective heirs, executors, trustees, guardians, administrators, representatives, agents, predecessors, successors, and assigns (collectively, the “Releasing Parties”), will release and discharge the Defendants and each of their current and former affiliates, subsidiaries, predecessors, successors, insurers, shareholders and their respective officers, Michael Freeman of Asgaard Capital, LLC, the Debtor’s duly appointed Chief Restructuring Officer in the Bankruptcy Case, directors, shareholders, agents, employees, partners, members, accountants, financial advisors, attorneys, representatives and other agents (collectively the “Released Parties”), of and from any and all claims and rights of any kind including demands, debts, liabilities, obligations, liens, actions and causes of action, costs,
6expenses, attorneys’ fees and damages of whatever kind or nature, at law, in equity and otherwise, whether known or unknown, anticipated, suspected or disclosed, liquidated or unliquidated, contingent or non-contingent, asserted or unasserted, fixed or not, matured or unmatured, disputed or undisputed, legal or equitable, that the Releasing Parties have or may have as of the Effective Date against the Released Parties arising out of, related to, or similar to the facts alleged in the Adversary Proceeding and/or the Florida Complaint and/or the Bankruptcy Case, including but not limited to: (a) under the WARN Act or any similar state statute, including back pay and unreimbursed out-of-pocket healthcare-related expenditures during the alleged period of the WARN violation; (b) the non-payment of wages; (c) the non-payment of accrued vacation, leave, or other paid time off; (d) unremitted fringe benefit deductions from paychecks (including but not limited to, insurance deductions, healthcare coverage/contributions, dental coverage/contributions, vision coverage/contributions, retirement contributions); (e) costs relating to medical expenses; and (f) the proof of claim filed by Helmut Thomay Proof of Claim No. 156), whether asserted by the Plaintiffs or any individual Class Member, or included in the Debtor’s schedules of liabilities (Doc. 167, 168 and 686, as the same may be Amended, the “Scheduled Claims”) (collectively, “Released Claims”). Defendants expressly reserve the right to object to, offset or oppose any and all Released Claims. Notwithstanding anything to the contrary in the Settlement Agreement, the Released Claims do not include any claims that have been or may be asserted against any party by, or on behalf of, the former employees of Klausner Lumber Two LLC., including Cornelius Turner (“Non-Releasing Parties”). k) Unclaimed Funds: In the event that there are any settlement funds remaining for any reason, including checks that are not deposited, endorsed or negotiated on the 91st day following their date of issuance, such Unclaimed Funds shall be held another sixty (60) days to be used to make distributions to any individual who is determined to have been eligible to receive a distribution as a Class Member but did not receive a distribution. Any funds remaining after the Residual Fund Waiting Period shall be donated to the Florida Gateway Food Bank, in Suwanee County, Florida, a nonprofit organization feeding the hungry in and around Live Oak, Florida. RELIEF REQUESTED 16. By this Joint Motion, the Parties request that the Bankruptcy Court enter an order: (i) certifying a class for settlement purposes only; (ii) appointing Plaintiff Helmut Thomay as the class representative (“Class Representative”) and Plaintiff’s counsel as class counsel (“Class Counsel”); (iii) preliminarily approving the settlement described in the Settlement Agreement; (iv) approving the form and manner of notice to the members of the putative Class (as described in the Motion); and (v) scheduling a fairness hearing to consider final approval of the Settlement.
7BASIS FOR RELIEF REQUESTED A. The Bankruptcy Court Should Certify the Settlement Class. 17. The proposed Class is defined as: All persons who were employed with KL1 located at 17152 46th Trace, Live Oak, Florida 32060, from February 15, 2020 up to and including March 16, 2020, excluding persons who voluntarily quit employment or who were involuntarily terminated from employment for cause during this time period, as listed on Exhibit A of the Settlement Agreement. 18. Where, as in this case, the Bankruptcy Court has not already certified a class, before approving a class settlement pursuant to Civil Rule 23, the Bankruptcy Court must determine whether the proposed settlement class satisfies the certification requirements of Civil Rule 23. Amchem v. Windsor, 521 U.S. 591, 620 (1997); In re Community Bank of Northern Virginia, 418 F.3d 277, 300 (3rd Cir. 2005). 19. “[A]ll Federal Circuits recognize the utility of Rule 23(b)(3) settlement classes.” Amchem, 521 U.S. at 618. Accord Community Bank, 418 F.3d at 299. “The settlement class action device offers defendants the opportunity to engage in settlement negotiations without conceding any of the arguments they may have against class certification.” Community Bank, 418 F.3d at 299. See also, General Motors Corp. Pick-Up Truck Fuel Tank Prods. Liab. Litig., 55 F.3d 768, 786 (3rd Cir. 1995) (“By specifying certification for settlement purposes only . . . the court preserves the defendant’s ability to contest certification should the settlement fall apart.”). 20. Subdivisions (a) and (b) of Rule 23 “focus court attention on whether a proposed class has sufficient unity so that absent members can fairly be bound by decisions of class Representatives.” Amchem, 521 U.S. at 621.
821. To be certified, a class must satisfy the four requirements of Rule 23(a): (1) numerosity, (2) commonality, (3) typicality, and (4) adequacy of representation. FED. R. CIV. P. 23; Community Bank, 418 F.3d at 302. In addition, the class must satisfy the requirements of Rule 23(b)(1), (2), or (3). In this case, the Parties have agreed to request conditional certification under Rule 23(b)(3), “the customary vehicle for damage actions.” Id. In order to certify a class under Rule 23(b)(3), the court must make two additional findings: predominance and superiority. That is, “[i]ssues common to the class must predominate over individual issues, and the class action device must be superior to other means of handling the litigation.” Gates v. Rohm & Hass Co., 248 F.R.D. 434, 442-43 (E.D. Pa 2008). 22. The proposed settlement Class meets each of the foregoing elements. (i) The Rule 23(a) Criteria 23. Numerosity requires a finding that the putative class is “so numerous that joinder of all members is impracticable.” Newton v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 259 F.3d 154, 182 (3d Cir. 2001). “No single magic number exists satisfying the numerosity requirement.” Beherend v. Comcast Corp., 245 F.R.D. 195, 202 (E.D. Pa. 2007) (citing Moskovitz v. Loop, 128 F.R.D. 624, 628 (E.D. Pa. 1989). However, the Third Circuit “typically has approved classes numbering 40 or more.” Gates, 248 F.R.D. at 440 (citing Stewart v. Abraham, 275 F.3d 220, 226-27 (3d Cir. 2001)). 24. Here, the proposed class of 134 Class Members (listed in Exhibit A to the Settlement Agreement) meets the numerosity requirement and joinder of all Class Members is impractical. The class is sufficiently numerous to make joinder of all members impractical, and thus satisfies the numerosity requirement.
925. The commonality requirement requires existence of at least one question of law or fact common to the Class. FED. R. CIV. P. 23(a)(2); Johnston v. HBO Film Management, Inc., 265 F.3d 178, 184 (3d Cir. 2001). The commonality threshold is low, (Powers v. Lycoming Engines, 245 F.R.D. 226, 236 (E.D. Pa. 2007)), and does not require “an identity of claims or facts among class members,” Behrend, 245 F.R.D. at 202. Further, the existence of individual facts and circumstances will not defeat commonality so long as the Class Members allege harm under the same legal theory. 26. Here, fundamental issues of law and fact regarding notice of termination, applicability of several defenses, measure of damages and priority of claims and attorneys’ fees are common to all Class Members. 27. Typicality requires that the “named plaintiff’s” claims are typical, in common-sense terms, of the class, thus suggesting that the incentives of the plaintiffs are aligned with those of the class.” FED. R. CIV. P. 23(a)(3); Beck v. Maximus, Inc., 457 F.3d 291, 295-296 (3d Cir. 2006) (quoting Baby Neal, 43 F.3d at 55). “Typicality requires a strong similarity of legal theories to ensure that the class Representatives’ pursuit of their own goals will work to benefit the entire class.” Powers, 245 F.R.D. at 236. “Factual differences will not render a claim atypical if the claim arises from the same event or practice or course of conduct that gives rise to the claims of the class members, and if it is based on the same legal theory.” Beck, 457 F.3d at 295-296 (quoting Baby Neal, 43 F.3d at 55). 28. The putative Class Representative, Mr. Thomay, does not allege that he was singled out for disparate treatment in the manner in which he was terminated. Instead, he alleges that he suffered harm as a result of the same conduct that allegedly injured the other Class Members – all allegedly were terminated beginning on or about March 16, 2020 without receiving sixty (60)
10days’ notice and their final wages. Accordingly, the Court should find that the typicality requirement is met. 29. With respect to adequacy, class representatives must “fairly and adequately protect the interests of the class.” FED. R. CIV. P. 23(a)(4); Gates, 248 F.R.D at 441. The adequacy inquiry “assures that the named plaintiffs’ claims are not antagonistic to the class and that the attorneys for the class representatives are experienced and qualified to prosecute the claims on behalf of the entire class.” Beck, 457 F.3d at 296. Thus, the court must determine “whether the Representatives’ interests conflict with those of the class and whether the class attorney is capable of representing the class.” Johnston, 265 F.3d at 185. 30. The Bankruptcy Court should find that the Class Representative Helmut Thomay has and will continue to adequately represents the interests of the Class Members. Indeed, Mr. Thomay, with the assistance of Class Counsel, successfully obtained appointment to the committee of unsecured creditors in Debtor’s bankruptcy case, which allows him to represent the interests of all unsecured creditors, including the former employees. 31. The second element of Rule 23(a)(4) is met because Plaintiffs’ counsel is “qualified, experienced and generally able to conduct the proposed litigation.” Eisen v. Carlisle & Jacquelin, 391 F.2d at 562, cert. denied, 417 U.S. 156 (1974). The Bankruptcy Court should find that proposed Class Counsel, Raisner Roupinian LLP and Lechner Law, are well qualified and experienced to represent the Class Members. The attorneys of Raisner Roupinian LLP, proposed lead Class Counsel, have been appointed class counsel in more than 100 active or settled certified or putative WARN class actions, including the following in district and bankruptcy courts in the Third Circuit: Etzelberger v. FAH Holdings, Inc., Case No. 13-13087-BLS (Bankr. D. Del.); Primavera v. Crowne Architectural Systems, Inc., 17-1292-SLM (Bankr.N.J.); Miller v. Columbus
11Steel Castings Company, et al., Adv. Proc. No. 16-50997-CSS (Bankr.Del); Rasheed v. American Home Mortgage Corp., Case No. 07-51688 (Bankr. D. Del.); Mekonnen, et al. v. HomeBanc Mortgage Corporation, Case No. 07-51695 (Bankr. Del.); Aguiar v. Quaker Fabric Corporation, Case No. 07-51716 (Bankr. D. Del.); Jones v. Alliance Bancorp, Case No. 07-51799 (Bankr. D. Del.); Bressmer v. Delta Financial Corporation, Case No. 07-51808 (Bankr. D. Del.); Czyzewski, et al. v. Jevic Transportation, Inc., Case No. 08-50662 (Bankr. Del.); Austen. v. Archway Cookies, Case No. 08-12323 (Bankr. D. Del.); Jackson v. Qimonda NA, Case No. 09-50192 (Bankr. D. Del.); Willock v. Pemco World Air Services, Inc., Case No. 12-50799 (Bankr. D. Del.); Folk, et al. v. Monaco Coach Corporation, Case No. 09-50402 (Bankr. D. Del.); Decuir v. WL Homes LLC, Case No. 09-52270 (Bankr. D. Del.); Hampton v. Navigation Capital Partners, Inc., Case No. 1:13-747 (D. Del.); Kohlstadt v. Solyndra LLC, Case No. 11-53155 (Bankr. D. Del.); Bergeron v. DGI Services, LLC, 11-2712 (Bank. D.N.J.); and Karaniewsky v. Altegrity, Inc. et al., Adv. Proc. No. 15-50204-LSS (Bankr. Del.). (ii) The Rule 23(b)(3) Criteria 32. Common questions of law and fact predominate over the individual issues (which appear to be limited to each Class Member’s pay and benefits at the time of termination). Predominance tests whether the proposed class is sufficiently cohesive to warrant adjudication by representation. Amchem, 521 U.S. at 623-24; Community Bank, 418 F.3d at 308-09. The proper predominance inquiry “trains on the legal or factual questions that qualify each member’s case as a genuine controversy, questions that preexist any settlement.” Amchem, 521 U.S. at 623. “In this vein a predominance analysis is similar to the requirement of Rule 23(a)(3) that claims or defenses of the named representatives must be typical of the claims or defenses of the classes.” Community Bank, 418 F.3d at 309.
1233. Here, just as typicality exists, predominance also exists. All of the claims arise from an alleged violation of the WARN Act resulting from the terminations that occurred on or about March 16, 2020. Accordingly, the Bankruptcy Court should find that the predominance requirement is met. 34. Rule 23(b)(3) also requires a determination that “a class action is superior to other available methods for the fair and efficient adjudication of the controversy.” FED. R. CIV. P. 23(b)(3); Gates, 248 F.R.D. at 443. In effect, “[t]he superiority requirement asks the court to balance, in terms of fairness and efficiency, the merits of a class action against those of alternative available methods of adjudication.” Krell v. Prudential Inc. Co. (In re Prudential Inc. Co.), 148 F.3d at 283, 316 (3d Cir. 1998). 35. Rule 23 sets forth several factors relevant to the superiority inquiry: “(A) the class members interests in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already begun by or against class members; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; and (D) the likely difficulties in managing a class action.” FED. R. CIV. P. 23(b)(3); Gates, 248 F.R.D. at 443. However, when a class certification is being considered for settlement purposes only, the difficulties in managing a class action are not considered. Gates, 248 F.R.D. at 443. 36. Here, a class action is superior to individual actions. First, the amount of each Class Member’s claim is relatively small. Individually, there is little incentive in controlling the prosecution of separate actions. See Amchem, 521 U.S. at 617 (“The policy at the very core of the class action mechanism is to overcome the problem that small recoveries do not provide the incentive for any individual to bring a solo action prosecuting his or her rights. A class action
13solves this problem by aggregating the relatively paltry potential recoveries into something worth someone’s (usually an attorney’s) labor.”) (quotation and citation omitted). It is appropriate that all the claims against Debtor arising from the Class Representative’s allegations should be concentrated in this Court. In addition, determining the claims of some Class Members, but not all, could prejudice the claims of the remaining Class Members. Accordingly, the Bankruptcy Court should find that the superiority element is met. 37. Based on the foregoing, the Bankruptcy Court should certify the Class for settlement purposes only, appoint Plaintiff Helmut Thomay as Class Representative, and appoint Plaintiff’s counsel as Class Counsel. B. The Bankruptcy Court Should Approve the Settlement Pursuant to Bankruptcy Rule 9019. 38. Bankruptcy Rule 9019(a) authorizes a bankruptcy court to approve a compromise or settlement after notice and a hearing, and section 105(a) of the Bankruptcy Code empowers a bankruptcy court to issue any order that is “necessary or appropriate.” In re Key3Media Group, Inc., 336 B.R. 87, 92 (Bankr. D. Del. 2005) “[T]he authority to approve a compromise settlement is within the sound discretion of the bankruptcy court.”). See also In re Louise’s, Inc., 211 B.R. 798, 801 (D. Del. 1997). When exercising such discretion, the bankruptcy court must determine whether the compromise is “fair, reasonable, and in the best interest [sic] of the estate.” Key3Media, 336 B.R. 87, 92. See also, Fry’s Metals, Inc. v. Gibbons (In re RFE Industries, Inc.), 283 F.3d 159, 165 (3d Cir. 2002); In re Louise’s, Inc., 211 B.R. at 801; In re Marvel Entertainment Group, Inc., 222 B.R. 243, 249 (Bankr. D. Del. 1998). 39. The bankruptcy court is not required to determine that the proposed settlement is the best possible compromise. In re Key3Media Group, 336 B.R. at 92-93 (citing In re Coram Healthcare Corp., 315 B.R. 321, 329 (Bankr. D. Del. 2004)). Rather, the settlement should be
14approved as long as it does not fall below the lowest point in the range of reasonableness. Cosoff v. Rodman (In re W.T. Grant Co.), 699 F.2d 599, 608 (2d Cir. 1983). In this respect, it is unnecessary for the bankruptcy court to consider the information necessary to resolve the factual dispute, nor is it necessary for the bankruptcy court to “conclusively determine claims subject to a compromise.” Key3Media Group, 336 B.R. at 92. (i) Standards for Approval of the Settlement Agreement. 40. Courts consider the following four factors when determining whether a settlement is in the best interests of the estate: (i) the probability of success in the litigation; (ii) the difficulties, if any, to be encountered in the matter of collection; (iii) the complexity of the litigation involved, and the expense, inconvenience and delay necessarily attendant thereto; and (iv) the paramount interest of the creditors and a proper deference to their reasonable opinions. Martin, 91 F.3d at 393; Aetna Casualty & Surety v. Jasmine, Ltd. (In re Jasmine, Ltd.), 258 B.R. 119, 123 (Bankr. D.N.J. 1999); Key3Media Group, 336 B.R. at 93; Marvel, 222 B.R. at 249. 41. In addition to these criteria, bankruptcy courts have also scrutinized additional factors, such as (i) the competency and experience of counsel who support the settlement; (ii) the relative benefits to be received by individuals or groups within the class; (iii) the nature and breadth of releases to be obtained by the parties to the settlement; and (iv) the extent to which the settlement is the product of arm’s length bargaining. See Fischer v. Pereira (In re Charles Street, Inc.), 209 B.R. 618, 620 (S.D.N.Y. 1997); In re Spielfogel, 211 B.R. 133, 144 (Bankr. S.D.N.Y. 1997); In re Dow Corning Corp., 198 B.R. 214, 223 (Bankr. E.D. Mich. 1996). (ii) Application of the Martin Factors to the Proposed Settlement. 42. The results of a trial are uncertain, and the litigation here is complex. The WARN Action involves numerous legal issues regarding the application of the WARN Act and its statutory
15and other legal defenses to complex facts. These issues include, inter alia, (i) whether Debtor provided adequate notice to the Class Members under the WARN Act; (ii) whether Debtor was entitled to give fewer than sixty (60) days’ notice because of statutory exceptions under the WARN Act; (iii) the computation of the amount of damages; and (iv) whether attorneys’ fees are to be awarded to the Class Members if they prevail. 43. Continued litigation would be costly and time-consuming and expose the Parties to significant litigation risks. Class Counsel has asserted that the aggregated liability of sixty (60) days’ wages and benefits under the WARN Act, plus unpaid wages, fringe benefits and medical expenses is approximately $1.55 million. The settlement provides for payment of a significant percentage of the maximum damages and eliminates any further accrual of litigation expenses in prosecuting the action against the Debtor, including trial and possible appeals. Accordingly, the Parties respectfully submit that approval of the Settlement Agreement is warranted. 44. The Settlement Agreement is in the best interest of creditors and the estate. When determining whether a compromise is in the best interests of the estate, a bankruptcy court must “‘assess and balance the value of the claim that is being compromised against the value to the estate of the acceptance of the compromise proposal.’” In re Key3Media Group, 336 B.R. at 93 (quoting In re Martin, 91 F.3d at 393 (citing TMT Trailer Ferry, Inc. v. Anderson, 390 U.S. 414, 424 (1968))). See also In re Nationwide Sports Distributors, Inc., 227 B.R. 455, 460 (Bankr. E.D. Pa. 1998) (“[I]n deciding whether to approve a particular compromise, courts utilize various criteria designed to achieve the objective of having the Trustee or debtor in possession act in [the] best interests of the estate”). To properly balance these values, a bankruptcy court should consider all factors “relevant to a full and fair assessment of the wisdom of the proposed compromise.” In re Marvel, 222 B.R. at 249 (quoting TMT Trailer Ferry, Inc., 390 U.S. at 424). See also Key3Media
16Group, 336 B.R. at 92 (“[t]he bankruptcy court must be ‘apprised of all relevant information that will enable it to determine what course of action will be in the best interest of the estate.’”) (quoting In re Martin, 91 F.3d at 393). 45. The paramount interest of creditors and reasonable deference to their views also favors approval of the Settlement Agreement. Moreover, as set forth above, the Settlement Agreement spares the Debtor’s estate the significant expense and uncertainty associated with the litigation of the myriad of liability issues under the WARN Act. 46. Considering each of the Martin factors, the Settlement Agreement should be approved. C. The Bankruptcy Court Should Preliminarily Approve the Settlement. 47. After class certification, approval of a class settlement generally requires two hearings: one preliminary approval hearing and one final “fairness” hearing. Gates, 248 F.R.D. 434. “The preliminary approval decision is not a commitment [to] approve the final settlement; rather, it is a determination that “there are no obvious deficiencies and the settlement falls within the range of reason.”” Gates v. Rohm & Haas Co, 248 F.R.D. 434, 438 (E.D. Pa. 2008) quoting Smith v. Professional Billing & Mgmt. Sys., Inc., 2007 WL 4191749, at *1 (D.N.J. Nov. 21, 2007); see also, In re Community Bank of Northern Virginia, 2008 WL 3833271 (W.D. Pa. Aug. 15, 2008). The preliminary approval determination requires the Bankruptcy Court to consider whether “(1) the negotiations occurred at arm’s length; (2) there was sufficient discovery; (3) the proponents of the settlement are experienced in similar litigation; and (4) only a small fraction of the class objected.” In re General Motors Corp., 55 F.3d 768, 785-86 (3d Cir. 1995). When class certification is sought in conjunction with preliminary approval, then class member objections are not relevant. Gates, 248 F. R. D. at 444.
1748. The Third Circuit has emphasized that “to minimize litigation and expedite the administration of a bankruptcy estate ‘compromises are favored in bankruptcy.’” Myers v. Martin (In re Martin), 91 F.3d 389, 393 (3d Cir. 1996) (quoting 9 Collier on Bankruptcy ¶ 9019.03 (15th ed. 1993)). See also In re Culmtech, Ltd., 118 B.R. 237, 238 (Bankr. M.D. Pa. 1990) (“[C]ompromises are favored in bankruptcy and … much of litigation in bankruptcy estates results in settlements”). 49. The Settlement Agreement has no obvious deficiencies and falls well within the range of reason. Each of the above-cited factors favors preliminary approval of the Settlement Agreement. 50. First, the settlement is the result of good faith, arm’s length negotiations between capable adversaries. 51. Second, the Parties have informally and formally exchanged information during litigation, mediation, and settlement negotiations. 52. Third, counsel for the Parties, and Class Counsel in particular, has the experience and the skill to both vigorously litigate WARN Act claims and to determine when and to what extent settlement is appropriate. Class Counsel has litigated over 100 WARN cases in bankruptcy court, many of which have been in Delaware, and has routinely been appointed Class Counsel. 53. Considering the foregoing, the Bankruptcy Court should preliminarily approve the Settlement Agreement. 54. Once a settlement is preliminarily approved, notice of the settlement and of the final fairness hearing is provided to class members. Federal Rule of Civil Procedure 23(e) requires that all members of the class be notified of the terms of any proposed settlement. The Rule 23(e) requirements are “designed to summarize the litigation and the settlement and to apprise class
18members of the right and opportunity to inspect the complete settlement documents, papers and pleadings filed in the litigation.” In re Prudential, 148 F.3d at 326-27 (3rd Cir. 1998). The proposed Notice of Settlement and Fairness Hearing will be served by Class Counsel on each Class Member. Class Counsel proposes that within three business days following entry of the order preliminarily approving the Notice of Settlement and Fairness Hearing substantially in the form attached hereto as Exhibit 2, Class Counsel will mail the notice to each Class Member at their last known addresses according to the relevant books and records, and as updated by Class Counsel. 55. The proposed Class Notice includes each of the facts required by Rule 23(c)(2)(B). Specifically, the Class Notice contains the following information: That the Settlement Agreement shall become effective only if it is approved by the Bankruptcy Court and an Approval Order is entered by the Bankruptcy Court without material modification under Bankruptcy Rules 7023 and Rule 9019; That, upon approval, the Settlement Agreement shall be effective as to all Class Members in the Settlement Class; That Class Members have the right to opt out of the Settlement Class and object to the Settlement Agreement either in person or through counsel at the Fairness Hearing; and That upon the Effective Date, all Released Claims (defined in the Settlement Agreement) of a Class Member in the Settlement Class (other than those claims to be paid under the terms of the Settlement Agreement) shall be waived, and that no person, including the Class Member, shall be entitled to any further distribution thereon. 56. The Class Notice also outlines the terms of the Settlement Agreement, including the attorneys’ fees proposed to be paid to Class Counsel and describes how each Class Member may obtain a copy of the pleadings in the Action and a copy of the Settlement Agreement. The proposed Notice also states the date, time, location, and purpose of the Fairness Hearing, informs Class Members of their right to appear at the Fairness Hearing, and describes the procedure for
19objecting to the Settlement Agreement. Accordingly, the proposed form of and manner to distribute the Notice of Settlement and Fairness Hearing is sufficient and should be approved. D. The Bankruptcy Court Should Set a Fairness Hearing and Finally Approve the Settlement at the Fairness Hearing. 57. At the Fairness Hearing, the Bankruptcy Court should finally approve the Settlement Agreement. Civil Rule 23(e) provides that “[t]he claims, issues, or defenses of a certified class may be settled, voluntarily dismissed or compromised only with the court’s approval.” Id. Final approval of a settlement pursuant to Civil Rule 23(e) turns on whether the settlement is “fair, reasonable and adequate.” Fed. R. Civ. P. 23(e)(2); In re Cendant Corp. Litig., 264 F.3d 201, 231 (3d Cir. 2001). “This inquiry requires the court’s independent and objective analysis of the evidence and circumstances before it in order to determine whether the settlement is in the best interest of those whose claims will be extinguished.” Community Bank, 2008 WL 3833271 at * 5 (quoting General Motors, 55 F.3d at 785.). 58. The Third Circuit has held that the following nine factors are relevant in determining whether a proposed class settlement is fair, reasonable, and adequate: (1) the complexity, expense, and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through trial; (7) the ability of the Debtor to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best recovery; and (9) the range of reasonableness of the settlement in light of all the attendant risks of litigation. Girsh v. Jepson, 521 F.2d 153, 157 (3d Cir. 1975). This list is not exhaustive. Community Bank, 2008 WL 3833272 at *6. 59. The following Girsh factors strongly support approval of the Settlement Agreement: (i) further litigation will be complicated, protracted and expensive, (ii) Plaintiff
20supports the Settlement Agreement and Class Counsel believe that the bulk of the other Class Members will have a favorable reaction to the Settlement Agreement and will not object to it, (iii) the Settlement Agreement was reached after the essential facts had been thoroughly investigated by Class Counsel and the Parties had shared their respective views of the case during mediation and subsequent settlement negotiations, (iv) the risk that Plaintiff would be unable to establish liability was significant because of the defenses asserted by Debtor if litigation had continued, and (v) when considered in light of the best possible recovery and the attendant risks, the Settlement falls well within the range of reasonableness. The Settlement provides for approximately $1.4 million in settlement of the priority WARN claim, while also resolving the Class’ unpaid wage, fringe benefits and medical claims. See Community Bank, 2008 WL 3833271 (finding that in light of the attendant risk a settlement representing 12.6% of the prayer was reasonable). 60. Based on the foregoing, the Bankruptcy Court should finally approve the Settlement Agreement. E. The Bankruptcy Court Should Approve Class Counsel’s Attorneys’ Fees and Costs. 61. Class Counsel is entitled to be paid a fee out of the settlement fund created for the benefit of the Class. Fed. R. Civ. P. 23(h); Boeing Co. v. Van Gemert, 444 U.S. 472, 478-79 (1980) (the Supreme Court has consistently recognized the common fund doctrine to permit attorneys who obtain a recovery for a class to be compensated from the benefits achieved as a result of their efforts); Blum v. Stenson, 465 U.S. 886, 900 n. 16 (1984) (calculation of fees based on the common fund doctrine is based on a percentage of the common fund recovered). The Debtor does not oppose this request and is neutral regarding the points discussed in this section of the Motion. 62. The law in this Circuit is settled that in common fund cases, fees for class counsel are awarded primarily based on a percentage of the common fund recovered for the class and that
21the lodestar is considered only when the court cannot otherwise come to a resolution of class counsel’s fees. In re Cendant Corp. Litig., 264 F.3d 201, 221, 283 (3d Cir. 2001); Gunter v. Ridgewood Energy Corp., 223 F.3d 190, 195, n.1 (3d Cir. 2000). Class Counsel submits that the award of a fee of one-third of the Settlement Amount, as provided in the Settlement Agreement, is fully warranted. 63. The percentage award should be based on seven factors, among others, that were enumerated in Gunter, 223 F.3d at 195, n. 1, and then quoted with approval in Cendant, 264 F.3d at 283, as follows: (a) the size of the fund created and the number of persons benefited; (b) the presence or absence of substantial objections by members of the class to the settlement terms and/or fees requested by counsel; (c) the skill and efficiency of the attorneys involved; (d) the complexity and duration of the litigation; (e) the risk of nonpayment; (f) the amount of time devoted to the case by plaintiffs’ counsel; and (g) the awards in similar cases. An eighth factor — “the percentage likely to have been negotiated between private parties in a similar case” — which was considered in determining the percentage fee award from a common fund in the case In re Ikon Office Solutions, Inc. Secs. Litig., 194 F.R.D. 166, 193 (E.D. Pa. 2000). 64. Class Counsel submits that the application of these eight factors to the Action shows that the agreed attorneys’ fee of one-third of the Settlement Amount should be approved for the following reasons: As to the size of the class and the recovery, the Class is 134 members and the $1.4 million Settlement Amount represents approximately ninety percent of the maximum priority-dollar portion of the full claim amount. Plaintiff supports the Settlement and Class Counsel anticipates that few, if any, Class Members will object, and that those objections, if any, will not be substantial or merited.
22 As shown by the favorable settlement of this matter achieved in the face of the difficult liability issues and bankruptcy procedural issues, Class Counsel provided legal services with considerable skill. The services were rendered with efficiency, considering the complexity of the issues, the difficulty of addressing the several defenses, and the need for discovery. The risk of non-payment at the outset was substantial as it was not known at that time whether there would be sufficient funds available to pay the putative class’ claims. In addition, the defenses asserted by the Debtor created further risk of non-payment. As to fees in similar cases, Class Counsel submits that in WARN class actions that Class Counsel has prosecuted, Class Counsel’s requests for attorneys’ fees – almost always for one-third the class recovery – have never been denied or reduced. As to the percentage likely to have been negotiated between private parties in a similar case, Class Counsel was retained by the Class Representative and on a one-third contingency basis, plus expenses. Class Counsel has been consistently retained in other WARN class actions on a one-third contingency basis. Class Counsel submits that each of the factors to be weighed in considering a fee request plainly favor the award of one-third of the WARN Component. 65. The requested fee of one-third of the proposed WARN settlement amount is supported by the percentage awards in other types of common fund cases. Moreover, the “Third Circuit favors the percentage-of-recovery method of calculating fee awards in common fund cases.” Glaberson v. Comcast Corp., 2015 WL 5582251, at *11 (E.D. Pa. Sept. 22, 2015), citing In re AT&T Corp. Secs. Litig., 455 F.3d 160, 164 (3d Cir. 2006); In re Rite Aid Corp. Secs. Litig., 396 F.3d 294, 300 (3d Cir. 2005). As pointed out in Ikon, 194 F.R.D. at 194, attorneys’ fee awards based upon a percentage of a common fund mostly “fall in the range of nineteen to forty-five percent.” See Levit v. Filmways, Inc., 620 F. Supp. 421 (D. Del. 1985) (33% of the common fund);
23In re Flonase Antitrust Litig., 951 F. Supp. 2d 739, 751 (E.D. Pa. 2013) (attorneys’ fees of $50 million, representing 33 1/3% of common fund of $150 million, approved); Bradburn Parent Teacher Store, Inc. v. 3M, 513 F. Supp. 2d 322, 336 (E.D. Pa. 2007) (attorneys’ fees of 35% of common fund approved). Class Counsel submits that the fees of one-third of the total expected Class recovery on the WARN claims should be approved under the multi-factor test applicable in this Circuit to fee awards from common fund recoveries. 66. As to fees in similar cases, Class Counsel has consistently been awarded fees of one-third of the class recovery in WARN Act cases by bankruptcy and district courts across the country, including in the bankruptcy courts of the Third Circuit. Most recently, in a WARN case that Class Counsel settled in 2020, Etzelberger v. FAH Holdings, Inc., Case No. 13-13087-BLS (Bankr. D. Del.), the Bankruptcy Court granted final approval of a WARN settlement of approximately $1.9 million, including attorneys’ fees of 33⅓% and a service award of $20,000 to the Class Representative. (D.I. 2386, Order Granting Preliminary Approval of Settlement, October 21, 2020) (D.I. 2394, Order Granting Final Approval of Settlement, November 30, 2020). Indeed, in all of Class Counsel’s more than 100 WARN class action settlements, it has not been awarded less than one-third. 67. In addition, to an attorney fee of one-third of the Settlement Amount, Class Counsel is seeking reimbursement for out-of-pocket costs incurred in the litigation (including the costs associated with the production and mailing of the Class Notices) not to exceed $30,000.00. To date, Class Counsel has incurred approximately $21,000 in expenses prosecuting the Action and expects to incur additional expenses in connection with seeking preliminary and final approval of the Settlement, mailing the Class Notice, and communicating with Class Members regarding the Settlement.
2468. In the Third Circuit reference to the lodestar, i.e., the time reasonably spent at a reasonable hourly rate is disfavored as “very time consuming” and, is only to be resorted to if the court is concerned that the fee award may result in a “windfall.” To avoid that result, courts can “cross-check” the percentage award against the lodestar. Cendant, 264 F.3d at 285; Bradburn, 513 F. Supp. 2d at 338. 63. The Bankruptcy Court should resolve the fee request without reference to the lodestar, especially in view of the burdens of carrying-out a lodestar “cross-check.” Such a cross-check would, in any event, demonstrate that the requested fee results in a multiplier of 1.8. F. The Bankruptcy Court Should Approve the Service Payment to the Class Representative. 69. The Class Representative should be awarded the Service Payment for the significant work he undertook on behalf of the Class. Bradburn, 513 F. Supp. 2d at 342 (“‘Courts routinely approve incentive awards to compensate named plaintiffs for the services they provided and the risks they incurred during the course of the class action litigation.’”) (citing Cullen v. Whitman Med. Corp., 197 F.R.D. 136, 145 (E.D. Pa. 2000)). The Debtor does not oppose the requested service payment to the Class Representative and is neutral regarding the points discussed in this section of the Motion. 70. Plaintiff filed a federal lawsuit that is searchable on the internet and may become known to prospective employers when evaluating his application for employment. He retained Class Counsel to commence this action shortly after being terminated from his employment with Debtor. He agreed to initiate the class action as a named plaintiff at a point when his future was uncertain and employment prospects potentially dimmed by suing his former employer. Plaintiff has expended time and effort to assist with the preparation of pleadings, informal discovery, and mediation. Plaintiff actively participated in meetings of the Official Committee of Unsecured Creditors for KL1, on which he sat. But for his efforts, the work done in prosecuting this case
25would have come to naught. Accordingly, the Service Payment is appropriate and justified as part of the overall Settlement considering the value of his services to the Class in the face of considerable risks. See, Bradburn, 513 F. Supp. 2d at 344 ($75,000 incentive award to class representative approved). 71. Finally, the amount of the Service Payment of $20,000 is consistent and on scale with amounts awarded in WARN Act class actions. The following is a sampling of WARN cases where service payments to class representatives were commensurate with the amount requested here: Etzelberger v. FAH Holdings, Inc., Case No. 13-13087-BLS (Bankr. D. Del.)[D.I. 2394] (service payment of $20,000 to the class representative in WARN litigation); Kohlstadt v. Solyndra, LLC., Adv. Proc. No. 11-53155 (MFW) (Bankr. D. Del.) [D.I. 51] ($20,000 combined service award to two class representatives in $3.5 million settlement); Capizzi et al v. AWTR Liquidation, Inc., Adv. Proc. No. 2:13-ap-01209-NB (Bankr. C.D. Cal.) [ECF 89] ($20,000 combined service award to two class representatives in WARN Act settlement of $1 million); Binford v. First Magnus Capital, Inc., Adv. Proc. No. 08-01494 (GBN) (Bankr. D. Ariz.) (awarding eight class representative service payments of $7,500, totaling $60,000, from settlement fund of $2.6 million settlement). G. Proposed Notice Schedule 72. The Bankruptcy Court’s entry of an Order granting preliminary approval of settlement would, among other things, (i) preliminarily approve the Settlement Agreement, (ii) direct notice of settlement to the Class, and (iii) schedule a fairness hearing to consider final approval of the Settlement Agreement. Accordingly, the Parties propose the following schedule: 73. Deadline for Notice of Settlement to be mailed to Class Members: three (3) business days following entry of the Order granting Preliminary Approval of Settlement,
2674. Deadline to opt-out of the Settlement: fourteen (14) days prior to the Final Fairness Hearing. 75. Deadline to Object to the Settlement: seven (7) days prior the Final Fairness Hearing. 76. Final Fairness Hearing: thirty-five (35) days from preliminary approval of the Settlement.
27CONCLUSION WHEREFORE, the Parties respectfully request the Bankruptcy Court to enter an Order substantially in the form attached hereto as Exhibit 3: 1) preliminarily approving the Settlement Agreement pursuant to Bankruptcy Rule 7023, 2) approving the form and manner of notice of settlement, 3) scheduling a Fairness Hearing to consider final approval of the Settlement Agreement, 4) entry of a final order, approving the Settlement Agreement following the Fairness Hearing, and 5) granting related relief. Dated: March 8, 2021 MORRIS, NICHOLS, ARSHT & LOIZIDES, P.A. TUNNELL LLP /s/ Nader A. Amer /s/ Christopher D. Loizides Robert J. Dehney (No. 3578) Christopher D. Loizides (No. 3968) Eric D. Schwartz (No. 3134) 1225 King Street, Suite 800 Daniel B. Butz (Bar No. 4227) Wilmington, Delaware 19801 Nader A. Amer (Bar No. 6635) Telephone: (302) 654-0248 1201 North Market Street, 16th Floor Facsimile: (302) 654-0728 P.O. Box 1347 E-mail: email@example.com Wilmington, Delaware 19899-1347 Telephone: (302) 658-9200 RAISNER ROUPINIAN LLP Facsimile: (302) 658-3989 Jack A. Raisner (admitted pro hac vice) Email: firstname.lastname@example.org René S. Roupinian (admitted pro hac vice) 270 Madison Avenue, Suite 1801 - and – New York, New York 10016 Telephone: (212) 221-1747 WESTERMAN BALL EDERER MILLER Email: email@example.com ZUCKER & SHARFSTEIN, LLP Email: firstname.lastname@example.org Thomas A. Draghi (admitted pro hac vice) William E. Vita (admitted pro hac vice) LECHNER LAW Alison M. Ladd (admitted pro hac vice) Jay P. Lechner, Esq. 1201 RXR Plaza Fifth Third Center Uniondale, NY 11556 201 E. Kennedy Blvd., Suite 412 Tel: 516-622-9200 Tampa, Florida 33602 email@example.com Telephone: (813) 842-7071 firstname.lastname@example.org Facsimile: (813) 225-1392 email@example.com Email: firstname.lastname@example.org Counsel for Klausner Lumber One, LLC Counsel for Plaintiffs and the putative class