IN THE COURT OF COMMON PLEAS OF MARION COUNTY, …
[Pages:4]IN THE COURT OF COMMON PLEAS OF MARION COUNTY, OHIO
DALE BURNS, GARY HALPIN and KAY HUTCHINS, on behalf of themselves and all others similarly situated,
Plaintiffs
v.
PRUDENTIAL SECURITIES, INC. and JEFFREY PICKETT,
Defendants
)
Case Number: 99 CV 0438
)
)
Judge William Finnegan
)
)
)
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)
)
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TO: THE CLASS OF INDIVIDUALS WHO HAD ACCOUNTS WITH PRUDENTIAL SECURITIES AND JEFFREY PICKETT AND WHO HAD THEIR ACCOUNTS SOLD, TRADED AND/OR REALLOCATED WITHOUT THEIR AUTHORIZATION BY PICKETT ON OR ABOUT OCTOBER 8 AND 9, 1998.
PLEASE READ THIS NOTICE CAREFULLY AND COMPLETELY. THIS NOTICE RELATES TO THE PROPOSED DISTRIBUTION OF A JUDGMENT IN A CLASS ACTION AGAINST PRUDENTIAL SECURITIES AND JEFFREY PICKETT. IF YOU ARE A MEMBER OF THIS CLASS, THIS NOTICE CONTAINS IMPORTANT INFORMATION ABOUT YOUR RIGHTS.
YOUR LEGAL RIGHTS AND OPTIONS AS A CLASS MEMBER:
Do Nothing ? If you are a class member and do nothing in response to this Notice (other than completing the attached W-9 Form and Disbursement Instruction Form), you will receive the Court-approved distribution of your portion of the judgment paid by Prudential, as explained in this Notice.
Object ? If you disagree with the proposed distribution, you may write to the Court and you, or your attorney, may choose to appear at the Final Hearing.
Your rights and options ? and the deadlines to exercise them ? are explained in this notice.
The Court in charge of this case has granted preliminary approval of the proposed method of distribution, payment of attorney fees and the reimbursement of litigation expenses, but still has to decide whether to grant final approval. Any distributions to Class Members can only be made after the Court grants final approval of the proposed method of distribution and appeals, if any, are resolved. Pursuant to Rule 23 of the Ohio Rules of Civil Procedure, and by order of the Marion County, Ohio, Court of Common Pleas, you are hereby notified as follows:
A.
SUMMARY OF THE CLASS ACTION LAWSUIT
1.
In September 1999, Dale Burns, Gary Halpin and Kay Hutchins filed a class action lawsuit on behalf of themselves
and all individuals who had accounts with Prudential Securities and Jeffrey Pickett and who had their accounts sold, traded and/or
reallocated without their authorization by Pickett on or about October 8 and 9, 1998. The Court certified this case as a class action by
Orders dated February 5, 2001 and March 14, 2001.
2.
On October 11, 2002, a Marion County jury entered a verdict equal to $12,280,477.00 in compensatory damages
(this includes annuity damages) and $250,000,000.00 in punitive damages. Thereafter, the Trial Court, on April 21, 2003, increased the
compensatory award to $19,403,638.57 after considering Plaintiffs' petition for additur to compensate the Class for prejudgment interest
and certain fees and expenses. Prudential Securities appealed this verdict, and on July 11, 2006, the Ohio Court of Appeals affirmed
the $19,403,638.57 compensatory damage award, but reduced the $250,000,000.00 punitive damage award to $6,851,186.00.
3.
On August 15, 2006, pursuant to the Court of Appeals punitive damages reduction, the Marion County, Ohio, Court of
Common Pleas entered an Amended Final Entry of Judgment totaling $32,083,030.07.1 Defendants paid this amount on August 17,
2006, and the payment is currently being held in an interest earning account in the "Burns v. Prudential Judgment Fund" c/o The Garden City Group, Inc. until the Court approves the final distribution of the judgment.2
1 This amount is the sum of: (1) $19,403,638.57 in compensable damages; (2) $6,851,186.00 in punitive damages; and, (3) $5,828,205.50 in post judgment interest. 2 The Garden City Group, Inc. has been retained as the Class Administrator.
Questions? Call us toll-free at 1-888-212-5603 or e-mail us at prudentialclassaction@. 1
B.
SUMMARY OF THIS NOTICE
4.
If approved by the Court, the funds paid by Prudential Securities in satisfaction of the judgment will be distributed to
the Class Members after the attorney fees and the litigation expenses have been deducted from the total award referenced in
paragraph 3. The Court will hold a Final Hearing on November 15, 2006 to determine whether the proposed method of distribution,
attorney fees request and litigation expense request are fair, reasonable and adequate.
5.
If you object to any aspect of the proposed method of distribution you can express this to the Court by taking the
steps explained below. If you do not object, then all you need to do is complete the attached IRS Form W-9 (by providing Social
Security Number (or TIN) and signing the form), complete the Distribution Instruction Form and return them both in the enclosed
envelope (postage required).
C.
METHOD OF DISTRIBUTION OF PROCEEDS TO CLASS MEMBERS
6.
If the Court finally approves the method of distribution as fair, reasonable and adequate, and that order is not
appealed, Class Counsel anticipates that the funds will be available for distribution to the Class on or about January 2, 2007. Class
Counsel has proposed that the funds available to Class Members be distributed as follows:
7.
Attorney Fees and Litigation Expenses. Class Counsel created the fund from which all Class Members will
receive compensation, and are entitled to a fee for rendering that service. Class Counsel has petitioned the Court for an attorney fee
equal to one-third of the total fund available for distribution. In addition, Class Counsel has requested reimbursement for their actual
out-of-pocket litigation expenses to date ($1,200,000.00). Both the requested one-third attorney fee and the litigation expenses, if
approved, will be deducted from the amounts discussed below, prior to any distribution.
8.
Compensable Damages. The jury awarded compensable damages: damages intended to compensate Class
Members for the Defendants' breach of the account agreements with the Class Members, in the amount of $11,740,994.00.
Additionally, the parties stipulated to annuity damages of $539,483.00, for a compensable damage total of $12,280,447. As explained
above, the Trial Court thereafter increased this sum to $19,403,638.57. Class Counsel hired an expert to calculate what percentage of
these total compensable damages are attributed to each Class Members' account or accounts, and that amount will be distributed to
each Class Member (less the approved attorney fee and expense reimbursement).
9.
Post Judgment Interest. By law, the Class is entitled to post judgment interest on the jury verdict (as ultimately
reduced by the Ohio Court of Appeals). As of August 17, 2006, the date Defendants paid the amount due under the judgment, post
judgment interest totaled $5,828,205.50. Since that date, the funds have been invested by the class action administrator, The Garden
City Group, Inc., and are earning additional interest. Each Class Member will be paid post judgment interest in proportion to his or her
percentage of the total compensable damages awarded (less the approved attorney fee and expense reimbursement).
10.
Punitive Damages. The Ohio Court of Appeals determined that the Class was entitled to $6,851,186.00 in punitive
damages. As a matter of Ohio law, punitive damages are intended to punish and deter certain conduct, and are not intended to enrich
the Class Members. However, the amount of punitive damages awarded each Class Member must also, in part, bear some
relationship to the amount of damage sustained not only by the Class as a whole but by each Class Member individually. For this
reason, the most equitable method to apportion punitive damages is as follows:
(A)
One half of the punitive damages award will be distributed to the Class on a per capita basis, meaning each
Class Member will receive an equal share. For purposes of counting Class Members, each Class Member who had
an account will receive $13,487.00 (less the approved attorney fee and expense reimbursement). A husband and
wife who each had an account will each receive an equal share. However, individuals with more than one account
will only receive one equal share. This recognizes the well-established legal precedent that punitive damages are not
intended to enrich the class as a whole or any individual in particular.
(B)
The remaining one-half of the punitive damages award will be distributed on a pro rata basis (less the
approved attorney fee and expense reimbursement); meaning, each Class Member will receive additional punitive
damages in proportion to his or her percentage of the total compensable damages awarded. This recognizes the
legal precedent requiring punitive damages to bear some relationship to the damages sustained by each Class
Member.
D.
APPROXIMATE AMOUNT OF YOUR DISTRIBUTION
11.
The approximate amount each Class Member can expect to receive, if Class Counsel's proposed distribution is
approved, is listed in the itemization that accompanies this Notice. This amount represents the approximate net distribution to each
Class Member after his or her share of the one-third attorney fee and litigation expenses have been deducted. Please recognize that
this is only an approximation of your distribution, as we will not know the exact amount of all expenses to be paid by the
Class nor the amount of additional interest earned on the fund until immediately before the distribution to Class Members
takes place.
Questions? Call us toll-free at 1-888-212-5603 or e-mail us at prudentialclassaction@. 2
12.
If you believe that the dollar amounts in the companion letter to this Notice do not accurately reflect the amount of
your damages after payment of attorney fees and expenses, you must write The Garden City Group, Inc., which is acting as the class
administrator, and include copies of any documents supporting what you believe are your correct damages. Please address your letter
and supporting documents as follows:
Burns v Prudential Securities Litigation c/o The Garden City Group, Inc. Claims Administrator P.O. Box 9000 #6463 Merrick, NY 11566-9000 1-888-212-5603
If you want to object to the proposed distribution you should reference section H below.
E.
TAXES
13.
The tax consequences of any distribution to a Class Member will vary depending on his or her individual situation.
You should consult with your tax advisor regarding any federal, state or foreign tax consequences. Class Counsel is not permitted to
give Class Members tax advice. You should consult your tax advisor prior to providing distribution instructions to the Class
Administrator because the manner in which you instruct the net proceeds to be paid may have a material affect on your tax obligations.
F.
FINAL HEARING ON METHOD OF DISTRIBUTION AND CONSIDERATION OF PETITION FOR ATTORNEY FEES AND
COSTS
14.
The Final Hearing will be held before the Marion County Court of Common Pleas on November 15, 2006 at 9:30 a.m.
in the Marion County Courthouse, the Honorable Judge William R. Finnegan presiding, for the purpose of considering approval of the
method of distribution and to allow an opportunity to voice objections to:
a) The method of distribution and whether it should be approved as fair and reasonable; and
b) The application of Class Counsel for an award of their fees and reimbursement of Class Counsels' past and future costs and expenses.
15.
The Court may continue the hearing without further written notice. If you are planning to attend the hearing, you
should confirm the date and time before traveling to Court.
G.
CLASS MEMBER DISTRIBUTION INSTRUCTIONS TO CLASS ADMINISTRATOR
16.
Every class member must provide written instructions to the Class Administrator regarding the manner in which the
"net proceeds" for each account are to be paid. A form is attached. If the Class Administrator does not receive written instructions from
a class member identifying how the "net proceeds" are to be paid for each account by December 15, 2006, the Class Administrator will
send one (1) check for the full amount of the net proceeds payable to the name of the account and mailed to the address on file. Each
class member is instructed to seek professional tax advice from a qualified accountant or tax preparer regarding the manner in which
the net proceeds are to be distributed by the Class Administrator prior to providing written instructions to the Class Administrator. The
attorneys for the Class are not permitted to give tax advice to class members. If a Class Member requests more than one (1) check to
be issued for the net proceeds, the total of all checks must equal the "net proceeds to Class Member." The distribution instruction form
is attached to this Notice. The completed form for each account must be sent to the Class Administrator at the following address no
later than December 15, 2006, via email or regular mail:
Mail:
Burns v Prudential Securities Litigation c/o The Garden City Group, Inc. Claims Administrator P.O. Box 9000 #6463 Merrick, NY 11566-9000
Email: prudentialclassaction@
Questions? Call us toll-free at 1-888-212-5603 or e-mail us at prudentialclassaction@. 3
H.
YOUR RIGHT TO APPEAR AND OBJECT
17.
Any objections must be presented in writing and must be received by the Court and Class Counsel no later than
November 10, 2006. Your written objection must include: (a) your name, address and telephone number (including area code); (b) a
statement of your objections and any supporting evidence you wish to introduce; and, (c) the case name and case number (Dale Burns,
Gary Halpin and Kay Hutchins, on behalf of themselves and all others similarly situated v. Prudential Securities, Inc. and Jeffrey Pickett,
Case No.99-CV-0438). YOU MUST FILE YOUR WRITTEN OBJECTIONS WITH THE CLERK OF THE COURT NO LATER THAN
NOVEMBER 10, 2006:
Clerk, Marion County Marion County Court of Common Pleas Courthouse Square 100 North Main Street Marion, Ohio 43302-3089
18.
You must also mail copies of those materials to Class Counsel, who must receive these materials no later than
November 10, 2006. The copies should be mailed to:
David P. Meyer David P. Meyer & Associates 1320 Dublin Road, Suite 100 Columbus, Ohio 43215
Thomas A. Hargett Maddox Hargett & Caruso 10100 Lantern Road Suite 150 Fishers, Indiana 46037
Scott L. Starr Starr Austen Tribbett Myers & Miller 201 South Third Street Logansport, Indiana 46947
19.
The Court will not consider any objection that is received after November 10, 2006.
20.
Right to Appear. If you file and serve a timely written objection as described above, you may ? but are not required
to ? attend the final approval hearing to object to any portion of the proposed distribution, the requested attorney fee, and the requested
reimbursement of litigation expenses. If you or your attorney intend to appear at the final approval hearing, you or your attorney must
also file a notice of intention to appear with the Clerk of the Court, and serve that notice on Class Counsel at the addresses listed in
Paragraphs 17 and 18. Your notice of intention to appear must include your name, your address, your telephone number, a statement
of the reasons why you intend to appear at the hearing, any evidence you intend to present at the hearing, the case name (Dale Burns,
Gary Halpin and Kay Hutchins, on behalf of themselves and all others similarly situated v. Prudential Securities, Inc. and Jeffrey
Pickett), and the case number (99-CV-0438). The Court and the Parties must receive notice of intention to appear no later than
November 10, 2006. If this notice is not received by the Court and Class Counsel on or before November 10, 2006, you will not be
permitted the opportunity to participate at the final hearing.
21.
If you approve of the method of distribution and the Class Counsel's petition for attorney fees and expenses,
you do not need to appear at the Final Hearing or take any other action to indicate your approval. However, if you do not make
any objection by the procedures explained herein, you will be prohibited from objecting to the fairness, reasonableness or adequacy of
either the method of distribution and/or any award of fees and/or expenses to Class Counsel in the future. You also need to complete
and return the Distribution Instruction Form included with this notice, as explained in Section G.
If you object to any aspect of the proposed method of distribution you can express this to the Court by taking the steps explained below. If you do not object, then all you need to do is complete the attached IRS Form W-9 (by providing Social Security Number (or TIN) and signing the form), complete the Distribution Instruction Form and return them both in the enclosed envelope (postage required).
I.
EXAMINATION OF PAPERS AND FURTHER INQUIRIES
22.
The description of this action's procedural and factual history contained herein is general and does not purport to
cover the entire history of this matter. For a more detailed statement of the matters involved in this action, reference is made to the
pleadings and other papers filed in this action, all of which may be inspected at the office of the Clerk of Courts for the Marion County,
Ohio, Common Pleas Court, and at the offices of the Clerk of the Court of Appeals for the Third Appellate District in Lima, Ohio.
23.
All other inquiries regarding this Notice should be addressed to the Class Administrator, The Garden City Group, Inc.,
toll-free at 1-888-212-5603 or e-mail us at prudentialclassaction@. Any further inquiries may be submitted in
writing to Class Counsel at the addresses listed in Paragraph 18. Please do not direct your inquiries to the Court, the Clerk of the
Court, Prudential Securities, or its counsel.
Honorable Judge William R. Finnegan
Marion County Common Pleas Court
Dated:
October 13, 2006
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE FOR INFORMATION EXCEPT AS PROVIDED FOR IN SECTION I.
Questions? Call us toll-free at 1-888-212-5603 or e-mail us at prudentialclassaction@. 4
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