NOTICE OF PROPOSED SETTLEMENT

Transcription

1 NOTICE OF PROPOSED SETTLEMENT United States District Court for the District of South Carolina A federal court authorized this notice. This is not a solicitation from a lawyer. If you bought a timeshare in Building 8 or Building 9 (also known as Building 800 and Building 900) at the French Quarter Resort in Branson, Missouri, you can get benefits from a class-action settlement. A settlement will provide a pool of money and timeshare intervals to pay claims from individuals who owned timeshare intervals in Building 8 or Building 9 (also known as Building 800 and Building 900) at the French Quarter resort in Branson, Missouri. The settlement resolves two lawsuits over whether certain individuals and entities are responsible for the losses resulting from the failure of the French Quarter Group to deliver completed timeshare intervals to buyers in Building 8 and Building 9 at the French Quarter resort. This settlement avoids costs and risks to you from continuing the lawsuits, provides money or timeshare intervals to timeshare interval owners like you, and releases the Defendants from any claims you may have relating to the French Quarter. Your legal rights are affected whether you act, or don t act. Read this notice carefully. YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT: SUBMIT A CLAIM FORM The only way to get a payment or replacement timeshare interval. EXCLUDE YOURSELF Get no payment. This is the only option that allows you to be part of any other lawsuit against the Defendants about the legal claims in this case. OBJECT Write to the Court about why you don t like the settlement. GO TO A HEARING Ask to speak in Court about the fairness of the settlement. DO NOTHING Get no payment and no replacement interval. Give up your rights. These rights and options and the deadlines to exercise them are explained in this notice. The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made and timeshare intervals will be made available if the Court approves the settlement and after appeals are resolved. Please be patient. 1

2 WHAT THIS NOTICE CONTAINS BASIC INFORMATION Why did I get this notice package? What are these lawsuits about? Why are these lawsuits class actions? Why is there a settlement?... 4 WHO IS IN THE SETTLEMENT How do I know if I am part of the settlement? Are there exceptions to being included? I m still not sure if I am included THE SETTLEMENT BENEFITS WHAT YOU GET What does the settlement provide? How much will my payment be? How can I get a timeshare interval or a monetary payment? When would I get my payment or my timeshare interval? What am I giving up to stay in the Class and get settlement benefits?... 6 EXCLUDING YOURSELF FROM THE SETTLEMENT How do I get out of the settlement? If I don t exclude myself, can I sue the Defendants for the same thing later? If I exclude myself, can I get money from this settlement?... 7 THE LAWYERS REPRESENTING YOU Do I have a lawyer in this case? How will the lawyers be paid?... 7 OBJECTING TO THE SETTLEMENT How do I tell the Court that I don t like the settlement? What s the difference between objecting and excluding oneself from the settlement? What if I do not object to the settlement but object to the amount of net loss reflected on my Claim Form?... 9 THE COURT S FAIRNESS HEARING When and where will the Court decide whether to approve the settlement? Do I have to come to the hearing? May I speak at the hearing? What happens if the Court approves the proposed Settlement? IF YOU DO NOTHING What happens if I do nothing at all? Are there more details about the settlement? How do I get more information?

3 1. Why did I get this notice package? BASIC INFORMATION Records from the French Quarter and other companies indicate that you or someone in your family may have purchased a timeshare interval in Building 8 or Building 9 at the French Quarter resort in Branson, Missouri. If that is true, you may be a member of this Settlement Class. The Court sent you this notice because you have a right to know about a proposed settlement of class-action lawsuits, and about all of your options, before the Court decides whether to approve the settlement. If the Court approves it and after any objections and appeals are resolved, an administrator appointed by the Court will make the payments that the settlement allows. You will be informed of the progress of the settlement. This package explains the lawsuits, the settlement, your legal rights, what benefits are available, who is eligible for them, and how to get them. The Court in charge of these cases is the United States District Court for the District of South Carolina, and the cases are known as (i) David Case, Sharon Case, Jay D. Smith, Dana Smith, Charles and Diane Nichols, Kenneth and Laurie Stithem, individually and on behalf of a class similarly situated v. French Quarter Group, III, LLC, Resort Funding, LLC, Spinnaker Development Corp., Inc., Southwind Management Corp., Southwind Holdings, Inc., Ken Taylor, and Brian Taylor Civil Action No. 12-CV-2804-DCN; and (ii) David Case, Sharon Case, Jay D. Smith, Dana Smith, Charles E. Nichols, Diane E. Nichols, Kenneth Stithem, and Laurie Stithem, Willard Mann and La May Mann, each plaintiff individually and on behalf of a class similarly situated v. Plantation Title Agency, Inc., John P. Qualey, Jr., the Qualey Law Firm, P.A., and Chicago Title Insurance Company, Civil Action No. 12-CV-2518-DCN. The people who brought the lawsuit are called Named Plaintiffs. They are David Case, Sharon Case, Jay D. Smith, Dana Smith, Charles E. Nichols, Diane E. Nichols, Kenneth Stithem, and Laurie Stithem, Willard Mann and La May Mann. The companies and the persons the Plaintiffs sued are called the Defendants. The Defendants are French Quarter Group, III, LLC, Resort Funding, LLC, Spinnaker Development Corp., Inc., Southwind Management Corp., Southwind Holdings, Inc., Ken Taylor, and Brian Taylor, Plantation Title Agency, Inc., John P. Qualey, Jr., the Qualey Law Firm, P.A., and Chicago Title Insurance Company. 2. What are these lawsuits about? The lawsuits claimed that the Defendants are responsible for losses resulting from the failure of the French Quarter Group, a timeshare developer, to deliver completed timeshares to buyers in Building 8 and Building 9 at the French Quarter Resort in Branson, Missouri. The French Quarter Group went bankrupt and closed down before those timeshares were complete or properly transferred. The Defendants deny these allegations and deny that they are liable to Plaintiffs or the purported class in any way. As part of this lawsuit, one Defendant the Qualey Law Firm brought suit against several Class Members regarding the return of funds held by the Qualey Law Firm. These Class Members paid their purchase price through The Qualey Law Firm, and the Qualey Law Firm held money from the sales price. This settlement resolves that dispute as well. 3

4 3. Why are these lawsuits class actions? In a class action, one or more people called Class Representatives (in these lawsuits, David and Sharon Case, Jay and Dana Smith, Charles and Diane Nichols, Kenneth and Laurie Stithem, and Willard and La May Mann) sue on behalf of people who have similar claims. The Class Representatives and all of the people with similar claims are a Class or Class Members. One court resolves the issues for all Class Members, except for those who exclude themselves from the class. U.S. District Judge David C. Norton is in charge of these two class actions. As part of the settlement the Defendants have consented to the creation of a Settlement Class to distribute the settlement proceeds. 4. Why is there a settlement? The Court did not decide in favor of Plaintiffs or the Defendants. Plaintiffs believe they could have won over $10 million if they won at trial. The Defendants think Plaintiffs would have won nothing at trial. But there was no trial. Instead, both sides agreed to a settlement. That way, the parties avoid the cost of a trial, and the people affected will get compensation. The Class Representatives and the attorneys think the settlement is best for all Class Members. WHO IS IN THE SETTLEMENT To see if you will get money from this settlement, you first have to figure out if you are a Class Member. 5. How do I know if I am part of the settlement? Judge Norton has ruled that everyone who fits this description is a Class Member: all Persons who executed an Interval Ownership Contract Agreement and Installment Note for the purchase of a timeshare interval in Building 800 (also known as Building 8) or Building 900 (also known as Building 9) at the French Quarter Resort. Based on information available to the Defendants, if you have received this notice, you are a class member. If you are a class member, you should read this notice carefully, and, if you wish to participate in the settlement recovery offered, you must comply with the requirements and deadlines set forth herein. 6. Are there exceptions to being included? Excluded from the Class are: (1) people who timely exercise their right to opt out of the Settlement; (2) People who rescinded the Interval Ownership Contract Agreement and Installment Note within the recessionary period allowed by law; (3) employees of the Defendants; and (4) employees of the Court. 7. I m still not sure if I am included. If you are still not sure if you are included, or have any questions about the settlement, you can ask for free help. You can review helpful information at the website or call the Claims Administrator, Angeion Group, at for more information. Or you can fill out and return the attached Claim Form (described in question 10) to see if you qualify. Please do not call the District Court or Judge Norton. 4

5 THE SETTLEMENT BENEFITS WHAT YOU GET 8. What does the settlement provide? Each Class Member can choose between (1) receiving a share of the $4,129, payment made by the Defendants, OR (2) receiving a timeshare unit or units in Buildings 1-6 of the French Quarter. If the Class Member chooses to receive payment, the Class Member will receive a pro rata share of the money remaining in the Settlement Fund after various class-related expenses are paid. If the Class Member chooses a timeshare unit or units, the Class Member will be assigned timeshare units based upon how much they paid, and how many units they purchased. The Class Members who choose timeshares will be responsible for paying maintenance fees on their units after they receive their deed and will otherwise be treated like any other owner at the French Quarter. Only 300 timeshare units are available. If more than 300 Class Members elect to receive timeshare units, only the 300 Class Members with the largest monetary claims will receive units. The remaining Class Members will be entitled to payment of money from the Settlement Fund. The Settlement provides that money held in escrow by the Qualey Law Firm will be paid as part of the $4,129, settlement fund. A very small group of Class Members who paid money to the Qualey Law Firm will be treated as a sub-class known as the Escrow Subclass. The Escrow Subclass will receive distributions based upon how much money was held by the Qualey Law Firm. Anyone who receives this notice is not a member of the Escrow Subclass. Finally, the Settlement provides that all outstanding debt or installment notes held by Southwind Holdings, Inc., will be forgiven and no further collection activities will occur. This applies to Class Members who financed their purchases of Building 8 and 9 through French Quarter, as opposed to some other party. This $4,129, payment, the 300 timeshares from the Defendants, and the debt forgiveness represent the settlement terms negotiated by the parties and Class Counsel through arm s length negotiations and a balancing of the risk of going to trial and the amount of a potential verdict. You have the right to opt out of the settlement, and, if you exercise that right, you will receive nothing from this settlement. 9. How much will my payment be? If the settlement is approved by the Court, you can receive either a timeshare interval (at the French Quarter Resort) or a monetary payment. The exact amount of the monetary payment to each Class Member is not currently known, but will be based on several factors, including (1) the amount of class-action expenses that are approved by the Court; (2) the number of Class Members who file claims; (3) the number of Class Members who elect to receive timeshares in lieu of monetary payments; and (4) the amount of net loss suffered by Class Members who file claims and elect to receive monetary payments. Payments will be made pro rata from funds available based upon the Class Member s Loss. The Class Member Loss is the principal amount you paid toward the purchase of your unit, less any money you received, if any, from the Bankruptcy of the French Quarter. Class Member Loss does not include any interest you paid for the purchase of your unit or any maintenance fees you paid. The Class Member Loss is not the amount of money you will receive, but it will be used to figure the Class Member s pro rata share of the settlement fund. You will not be entitled to money from the settlement fund or a timeshare unit if you traded in all your interests in building 8 or 9 as part of the purchase of another unit (not in building 8 or 9) at the Resort. The Claim Form for most potential Class Members contains a number for the Class Member s Loss. This figure is based upon business records obtained by Class Counsel. If you disagree with the Class Member s Loss or the Class Member s Loss is listed as UNKNOWN, you must state the amount you believe to be your Class Member s Loss, and you must also provide any documents or evidence you have which supports your claim. Within 30 days of receiving your claim, the Claims Administrator will notify you whether your 5

6 claim is accepted or rejected. If the Claims Administrator rejects your claim, or if you disagree with the approved amount, you may apply to have the Court determine the amount of your claim. If you agree with the Class Members Loss set forth on your Claim Form, then complete and sign the Claim Form. If you do not return the Claim Form by the deadline, you will not be allowed to receive settlement funds or timeshare units. Completed claims forms must be mailed to the Claims Administrator, c/o Angeion Group, 1801 Market Street, Suite 660, Philadelphia, PA and postmarked on or before June 5, CLASS MEMBERS WHO DO NOT TIMELY SUBMIT CLAIM FORMS IN THIS WAY WILL BE DEEMED TO HAVE WAIVED ANY RIGHT TO RECEIVE SETTLEMENT BENEFITS BUT WILL STILL BE BOUND BY THE TERMS OF THE SETTLEMENT. 10. How can I get a timeshare interval or a monetary payment? If you have no objection to the settlement and wish to receive the benefits of the settlement, you must complete and sign the Claim Form, which is attached to this Notice, postmarked on or before June 5, If your claim is confirmed and the Court approves the settlement, you will then receive the benefits of the settlement. 11. When would I get my payment or my timeshare interval? The Court will hold a hearing on July 15, 2015, to decide whether to approve the settlement. If Judge Norton approves the settlement, there may be appeals after that. It s always uncertain whether those appeals could be resolved, and resolving them could take time, perhaps more than a year. Everyone who sends in a Claim Form will be informed of the progress of the settlement. Please be patient. Assuming the settlement is approved and there are no appeals, it is anticipated that funds will be disbursed on September 29, What am I giving up to stay in the Class and get settlement benefits? Unless you exclude yourself, you will stay in the class, and that means that you can t sue, continue to sue, or be part of any other lawsuit against the Defendants about the legal issues in this case, namely your purchase of a timeshare unit in Building 8 or 9 of the French Quarter. It also means that all of the Court s orders will apply to you and legally bind you. If you sign the Claim Form, you will agree to a Release, in attached to the Claim Form, which describes exactly the legal claims you give up if you get settlement benefits. EXCLUDING YOURSELF FROM THE SETTLEMENT If you don t want benefits from this settlement, but you want to keep the right to sue or continue to sue the Defendants, on your own, about the legal issues in this case, then you must take steps to get out. This is called excluding yourself or is sometimes referred to as opting out of the settlement class. 13. How do I get out of the settlement? To exclude yourself from the settlement, you must send a letter by mail saying that you want to be excluded from Case v. French Quarter Group, III, LLC (Civil Action No. 12-CV-2804-DCN) and Case v. Plantation Title Agency, Inc. (Civil Action No. 12-CV-2518-DCN). The letter must contain the following information: (1) your name, current address, and signature; (2) a statement that you wish to be excluded from the settlement; (3) if known, the unit numbers for any timeshare interval that you purchased in Building 800 (also known as Building 8) or Building 900 (also known as Building 9) at the French Quarter resort, along with the dates that the unit was purchased and the purchase prices for that unit. An exclusion request cannot be submitted on behalf of a group. 6

7 You must mail your exclusion request postmarked no later than June 5, 2015 and must be sent to this address: French Quarter Class Action: Exclusion Request c/o Angeion Group 1801 Market Street, Suite 660 Philadelphia, PA If you ask to be excluded, you will not get any settlement payment, and you cannot object to the settlement. You will not be legally bound by anything that happens in these lawsuits. You may be able to sue (or continue to sue) the Defendants in the future. After the number of opt outs has been determined, the Defendants can terminate the settlement if any of the Defendants decides that the number of opt outs is excessive. 14. If I don t exclude myself, can I sue the Defendants for the same thing later? No. Unless you exclude yourself, you give up any right to sue the Defendants for the claims that this settlement resolves. If you have a pending lawsuit, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is June 5, If I exclude myself, can I get money from this settlement? No. If you exclude yourself, do not send in a Claim Form to ask for any money. But, you may sue, continue to sue, or be part of a different lawsuit against the Defendants. 16. Do I have a lawyer in this case? THE LAWYERS REPRESENTING YOU The law firms of Pierce, Herns, Sloan and Wilson, LLC, and the Culver Law Firm, P.C., have represented you and other Class Members throughout the course of these two lawsuits. These lawyers are called Class Counsel. You will not be charged for these lawyers. If you want to be represented by your own lawyer, you may hire one at your own expense. 17. How will the lawyers be paid? Class Counsel will apply for an attorneys fee of approximately $2,050,000, which would be paid out of the $4,129, settlement fund. Class Counsel will also apply for reimbursement of expenses of $584,734.48, and seek incentive payments for each of the Named Plaintiffs of $750 each, and $500 for each person who was a Plaintiff at any time and gave a deposition. The total incentive payments will not exceed $12,000. Class Counsel spent considerable time and effort prosecuting this litigation. They undertook the litigation without cost to the Class Members, advancing all expenses. They did so with the understanding that they would be paid only if they were successful in recovering benefits for the Class. OBJECTING TO THE SETTLEMENT You can tell the Court that you don t agree with the settlement or some part of it. 18. How do I tell the Court that I don t like the settlement? If you re a Class Member, you can object to the settlement, including objecting to the Class Counsel s fees and costs, if you don t like any part of it. You can give reasons why you think the Court should not approve it. The Court will consider your views. If your objection is rejected, you will be bound by the final judgment just as if you had not objected. 7

8 You must file your objections in writing with the Clerk of the Court for the United States District Court for the District of South Carolina, 85 Broad Street, Charleston, South Carolina and mail a copy to counsel for all parties whose names and addresses are listed below, postmarked on or before June 5, The notice must be sent via mail to Class Counsel and Settling Defendant s lawyers at the following addresses: Class Counsel: Joseph C. Wilson, IV PIERCE, HERNS, SLOAN & WILSON, LLC The Blake House 321 East Bay Street Charleston, SC Robert E. Culver THE CULVER FIRM, P.C. 575 King Street, Ste. A Charleston, SC Settling Defense Counsel: Richard S. Dukes, Jr. Ashley S. Heslop TURNER, PADGET, GRAHAM & LANEY, P.A. 40 Calhoun Street, Suite 200 P.O. Box Charleston, SC ATTORNEYS FOR SOUTHWIND MANAGEMENT CORP., SOUTHWIND HOLDINGS, INC., FRENCH QUARTER III, SPINNAKER DEVELOPMENT CORP., INC., AND KEN TAYLOR James Werner Felicia Preston PARKER POE 1201 Main Street, Suite 1450 Columbia, SC Scott E. Bayzle PARKER POE 150 Fayetteville Street, Suite 1400 Raleigh, NC ATTORNEYS FOR RESORT FUNDING, LLC Ralph E. Tupper Katherine G. Ferguson TUPPER, GRIMSLEY & DEAN, PA P.O. Box 2055 Beaufort, SC ATTORNEYS FOR BRIAN TAYLOR Greg Horton WOMBLE CARLYLE SAND RIDGE & RICE, LLP 5 Exchange Street P.O. Box 999 Charleston, South Carolina Derek E. Diaz Charles W. Pugh HAHN LOESER & PARKS LLP 200 Public Square, Suite 2800 Cleveland, Ohio ATTORNEYS FOR CHICAGO TITLE INSURANCE COMPANY James L. Bruner Warren C. Powell, Jr. Benjamin C. Bruner Bruner, Powell, Wall & Mullins, LLC 1735 St. Julian Place, Suite 200 P. O. Box Columbia, SC ATTORNEYS FOR PLANTATION TITLE AGENCY, INC., JOHN P. QUALEY, JR. AND THE QUALEY LAW FIRM, P.A. 8

9 CLASS MEMBERS WHO DO NOT TIMELY MAKE THEIR OBJECTIONS IN THIS MANNER WILL BE DEEMED TO HAVE WAIVED ALL OBJECTIONS TO THE SETTLEMENT AND WILL NOT BE ENTITLED TO BE HEARD AT THE FAIRNESS HEARING ON JULY 15, You may, but need not, enter an appearance through counsel of your choice. If you do, you will be responsible for your personal attorney s fees and costs. This description of the settlement is general and does not cover all of the issues and proceedings thus far. In order to see the complete Settlement Agreement, including the individual terms of the settlement, you should visit the website at DO NOT ADDRESS ANY QUESTIONS ABOUT THE SETTLEMENT OR THE LITIGATION TO THE CLERK OF THE COURT OR TO THE JUDGE. They are not permitted to answer your questions. You may direct any inquiries to the Claims Administrator at What s the difference between objecting and excluding oneself from the settlement? Objecting is simply telling the Court that you don t like something about the settlement. You can object only if you stay in the Class. Excluding yourself is telling the Court that you don t want to be part of the Class. If you exclude yourself, you have no basis to object because the case no longer affects you. 20. What if I do not object to the settlement but object to the amount of net loss reflected on my Claim Form? If you have no objection to the settlement and wish to obtain the benefits of the settlement but object to the amount of net loss reflected on your Claim Form, you must complete and return the Proof of Claim to the Claims Administrator, c/o Angeion Group, 1801 Market Street, Suite 660, Philadelphia, PA postmarked on or before June 5, 2015 and also set forth your disagreement with the amount of net loss and provide all supporting documentation supporting your position. The Claims Administrator will then deny or approve your Proof of Claim and provide you with notice of that determination. If you disagree with the Claims Administrator s determination, you will be given the opportunity to appeal to the Court. Instructions for filing such an appeal will be provided with the Claims Administrator s determination. THE COURT S FAIRNESS HEARING The Court will hold a hearing to decide whether to approve the settlement and to address any appeals of the Claims Administrator s determinations. You may attend and you may ask to speak, but you don t have to. 21. When and where will the Court decide whether to approve the settlement? On July 15, 2015, at 10:00 a.m., a hearing will be held on the fairness of the proposed settlement (the Fairness Hearing ). At the hearing, the Court will consider whether the settlement is fair, reasonable, and adequate, and the Court will also decide the amount of attorneys fees and costs to be awarded. If there are any objections to the settlement or the request for attorneys fees and costs, the Court will consider and rule upon them. The hearing will take place before the Honorable David C. Norton, United States District Judge for the District of South Carolina, 83 Broad Street (entrance on Meeting Street), Charleston, South Carolina. After the hearing, the Court will decide whether to approve the settlement. We do not know how long these decisions will take. 22. Do I have to come to the hearing? No. Class Counsel will answer questions Judge Norton may have at the Fairness Hearing. But, you are welcome to come to the Fairness Hearing at your own expense. If you send an objection, you don t have to come to Court to talk about it. As long as you mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend the Fairness Hearing, but it s not necessary. 9

10 23. May I speak at the hearing? You may ask the Court for permission to speak at the Fairness Hearing. To do so, you would have to do the following by June 5, 2015: (1) provide a written notice to the Clerk of Court indicating that you intend to be heard at the fairness hearing and indicating the basis for your appearance along with a statement that indicates why you oppose or support the Settlement or certification of the class; and (2) provide a copy of such written notice and any related briefs, documentation, or other materials to the Court, Class Counsel, and counsel for the Defendants. The written notice must contain your name, current mailing address, unit numbers for any timeshare interval that you purchased in Building 800 (also known as Building 8) or Building 900 (also known as Building 9) at the French Quarter resort, along with the dates that the unit was purchased and the purchase prices for that unit. 24. What happens if the Court approves the proposed Settlement? If the Court approves the proposed settlement, it will enter a judgment that will dismiss the claims of all Class Members covered by the Settlement Agreement who did not opt out on the merits and with prejudice as to those claims. All non-excluded Class Members, as well as their respective heirs, personal representatives, agents, attorneys, parent, subsidiary, and/or affiliate corporations, shareholders, directors, officers, joint venturers, partners, trustees, receivers, insurers, reinsurers, servants, employees, representatives, administrators, successors, predecessors, and assigns shall be forever barred from prosecuting their own lawsuits and shall be deemed to have released Resort Funding, LLC; Spinnaker Development Corp., Inc.; Southwind Holdings, Inc.; Southwind Management Corp.; Ken Taylor; Brian Taylor; French Quarter Group, III, LLC; Plantation Title Agency, Inc., John P. Qualey, Jr., the Qualey Law Firm, P.A., and Chicago Title Insurance Company; and related entities from all claims, causes of action, or losses of any kind whatsoever that Class member has or may claim to have against the Defendants and their affiliates that related to any of the conduct that has or could have been alleged or otherwise referred to in the these lawsuits. 25. What happens if I do nothing at all? IF YOU DO NOTHING If you do nothing, you ll get no money from this settlement. But, unless you exclude yourself, you won t be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against the Defendants about the legal issues in this case, ever again. 26. Are there more details about the settlement? This notice summarizes the proposed settlement. More details are in a Settlement Agreement. You can get a copy of the Settlement Agreement by visiting How do I get more information? You can call , write to French Quarter Class Action, c/o Angeion Group, 1801 Market Street, Suite 660, Philadelphia, PA 19103, or visit the website at where you will find answers to common questions about the settlement, plus other information to help you determine whether you are a Class Member and whether you are eligible for a payment. DATE: March 19,