Superior Court of Cobb County, State of Georgia In re Cobb EMC Class Action, Case No. 10: NOTICE OF PROPOSED CLASS ACTION SETTLEMENT

Transcription

1 Superior Court of Cobb County, State of Georgia In re Cobb EMC Class Action, Case No. 10: NOTICE OF PROPOSED CLASS ACTION SETTLEMENT A Court authorized this Notice. This is not a solicitation. TO: ALL CURRENT AND FORMER MEMBERS OF COBB EMC You may be entitled to a payment from a class action Settlement. You are receiving this Notice to inform you that a Settlement has been reached in a class action lawsuit involving current and former members of Cobb Electric Membership Corporation ( Cobb EMC ). If approved by the Court, the Settlement will create a cash Settlement fund of up to $98 million for the benefit of current and former Cobb EMC members. You may have received prior notice or completed forms relating to the years This Settlement includes all members of Cobb EMC at any time between 1938 and December 31, The lawsuit claims that Cobb EMC s prior board and management failed and refused to retire capital credits belonging to former and current members. Cobb EMC denied and continues to deny that it did anything wrong. The principal reason for the Settlement is the substantial benefits to the Settlement Class and the elimination of the expense, uncertainty and risk of further litigation. If approved by the Court, those included in the Settlement Class will receive cash payment from Cobb EMC. You must file a Claim Form to get payment. Your legal rights are affected whether you act or don't act. Please read this notice carefully. YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT SUBMIT A CLAIM FORM BY FEBRUARY 10, 2014 EXCLUDE YOURSELF FROM THE SETTLEMENT BY JANUARY 10, 2014 OBJECT BY JANUARY 10, 2014 GO TO A HEARING ON FEBRUARY 25, 2014 DO NOTHING The only way to receive a payment. Get no benefit from the Settlement. This is the only option that allows you to bring your own lawsuit or ever be part of any other lawsuit against the Defendant about the claims in this case. Write to the Court if you don t like the Settlement. You will still be a Member of the Class. Ask to speak in Court about the fairness of the Settlement. Get no payment from the Settlement and still give up your legal 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 and whether to finally certify the Settlement Class. Payments by Cobb EMC will only be made if the Court approves the Settlement. Please be patient. Para asistencia en Español por favor llame a Spanish Language Notice Page 1 of 8

2 What this Notice Contains Basic Information 1. Why is there a notice? 3 2. What is the lawsuit about? 3 3. Why is this a class action? 3 4. Why is there a Settlement? 3 Who is in the Settlement 5. How do I know if I am part of the Settlement? 4 6. What if I am still not sure if I am included in the Settlement Class? 4 The Settlement s Benefits 7. What does the Settlement provide? 4 8. How do I file a claim to receive Settlement benefits? 5 9. What am I giving up to stay in the Settlement Class? 5 Excluding Yourself from the Settlement 10 How do I get out of the Settlement? If I don t exclude myself, can I sue Cobb EMC for the same thing later? If I exclude myself from the Settlement, can I still get the Settlement benefits? 6 The Lawyers Representing You 13. Do I have a lawyer in this case? How will the lawyers be paid? 6 Objecting to the Settlement 15. How do I tell the Court that I don t like the Settlement? What s the difference between objecting and excluding? 7 The Court s Settlement Approval Hearing 17. 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? 7 If You do Nothing 20. What happens if I do nothing at all? 8 Additional Information 21. How do I get more information? 8 Page 2 of 8

3 Basic Information 1. Why is there a notice? You, someone in your family, or your organization is or was a member of Cobb EMC. The Court directed that this Settlement Notice be sent to Settlement Class Members because you have a right to know about the proposed Settlement of a class action lawsuit, and about your options, before the Court decides whether to finally approve the Settlement. 2. What is the lawsuit about? The case was filed in the Superior Court of Cobb County, State of Georgia. It is called In re Cobb EMC Class Action, Case No. 10: The people who sued are called Plaintiffs and the company they sued is called the Defendant. Superior Court Judge J. Stephen Schuster is overseeing the case. The lawsuit claims that Cobb EMC s prior board and management failed and refused to retire capital credits belonging to former and current members. As a non-profit cooperative, Cobb EMC does not issue stock and does not have shareholders. Instead, Cobb EMC is owned by its members, who hold capital credits rather than shares. Members earn capital credits when Cobb EMC s income exceeds its expenses in a given year. The difference is referred to as margin and is allocated as capital credits to Cobb EMC s members in proportion to the amount of business each did with the cooperative during the year. Allocated margins are retained and used by an EMC as capital for a number of years, typically between 10 to 30 years, but eventually retired in a series of capital credit distributions referred to as a revolving plan. The lawsuit contends that Cobb EMC failed and refused to adopt a reasonable revolving plan or to retire capital credits on a schedule consistent with its obligations. The lawsuit generally alleges causes of action against Cobb EMC for breach of contract, breach of fiduciary duty and declaratory relief. Cobb EMC denies any wrongdoing and the Court has not made a final decision either way. The parties have agreed to resolve this case by settlement to avoid the time, expense and uncertainty associated with continued litigation, and to provide benefits to former and current members as soon as practical. On October 10, 2013, the Court entered a Preliminary Approval Order, which preliminarily approved the Settlement, directed that this Settlement Notice be sent to potential Settlement Class Members, and scheduled the Final Approval Hearing on February 25, 2014, to consider whether to grant final approval of the Settlement. 3. Why is this a class action? In a class action, one or more people, called Class Representatives, (in this case Joseph Shea, deceased, by his executrix Ruth Pitman, Philip Caltabiano and Claude Lamour, on behalf of former members; and Dianne Brackin, James Hudson and Franklin Smith, on behalf of current members) sue on behalf of people who have similar claims. All persons and entities with similar claims to the Class Representatives are a Class or Class Members, except for those who exclude themselves from the Class. Bringing a case as a class action allows adjudication of many similar claims of persons and entities that might be economically too small to bring individually. 4. Why is there a Settlement? The Class Representatives and their counsel believe that the claims asserted in the lawsuit have merit. They recognize, however, the expense and length of continued proceedings necessary to pursue their claims against the Defendant through trial and appeals, as well as the associated risks. Cobb EMC is not admitting that it did anything wrong, but both sides want to avoid the cost of further litigation and to provide benefits to former and current Cobb EMC members as soon as practical. The Court has not decided in favor of the Plaintiffs or Defendant. The attorneys investigated the facts and applicable law regarding the Plaintiffs claims and the Defendant s defenses. After approximately three years of litigation, the parties, along with numerous experts, engaged in lengthy negotiations and several months of mediation before the former Georgia Attorney General, Michael Bowers. At the time the initial agreement to settle was reached, the parties and their counsel had a thorough understanding of the strengths and weaknesses of their respective positions. Class Representatives and their attorneys think the Settlement is best for everyone who is affected. The Settlement provides substantial benefits now as compared to the risks that a similar or smaller recovery would be achieved after trial and appeal, possibly years in the future, or that no recovery would be achieved at all. Page 3 of 8

4 Cobb EMC has also taken into account the burden, expense, uncertainty, distraction, and risks inherent in any litigation, and has concluded that it is best that the lawsuit be fully and finally settled upon the terms and conditions set forth in this Settlement. The Settlement resolves and releases all claims that were or could have been brought in the lawsuit against Cobb EMC by the Settlement class, except for those who exclude themselves from the Settlement. Who is in the Settlement? To see if you are entitled to benefits from the Settlement, you first have to determine if you are a member of the Settlement Class. 5. How do I know if I am part of the Settlement? Any individual or entity that was a member of Cobb EMC (received power from Cobb EMC) at any time following Cobb EMC s formation in 1938 up through December 31, 2012, is a member of the Settlement Class. If the member is deceased, that individual s estate, heirs or beneficiaries may be entitled to payment. Excluded from the Settlement Class are: Any entity in which Cobb EMC has a controlling interest; All current and former officers and directors of Cobb EMC, their immediate family members and legal representatives; Federal agencies; Judge J. Stephen Schuster and his staff; The successors and assigns of any such excluded person; and Any member whose capital credits were retired in full prior to filing of the suit on January 15, What if I am still not sure if I am included in the Settlement Class? If you are still not sure whether you are included in the Settlement Class, you can call for free help or visit for more information. Or, you can fill out and return the Claim Form described in Question 8 below to see if you qualify. 7. What does the Settlement provide? The Settlement Benefits The Settlement provides the following primary benefits to Class Members: 1. $98 Million Settlement Fund. Cobb EMC will pay up to $98 Million for the benefit of Class Members, including attorneys fees and expenses of litigation. All Class Members will be entitled to receive an immediate cash payment, without any discount, for the capital credits allocated to them through the first half of 1988 (as specified in the Stipulation of Settlement and for all years not already paid); 2. All Class Members will additionally be entitled to receive the capital credits allocated to them from the second half of 1988 up through December 31, 2012 (as specified in the Stipulation of Settlement), either in a one-time payment discounted to present value (utilizing a 12% discount rate), or paid out over 24.6 years without discount. The Settlement is explained in detail in this Notice and in the Stipulation of Settlement, available at and 3. Cobb EMC will also pay to Settlement Class Members pre-2013 Generation and Transmission Capital Credits ( G&T Capital Credits ) if and when Cobb EMC receives payment in cash of such credits. As of December 31, 2012, Cobb EMC had approximately $116 million of G&T Capital Credits allocated to it. Historically, Cobb EMC has not received payment of G&T Capital Credits. 4. All costs of providing notice and administering the Settlement will be paid by Cobb EMC in addition to the Settlement Fund and will not impact the benefits to Class Members. Page 4 of 8

5 8. How do I file a claim to receive Settlement benefits? To receive cash available under the Settlement, you must fill out and submit a Claim Form. You may obtain, complete and submit a Claim Form online at the Settlement website, You may also call the Claims Administrator at and request that a Claim Form be mailed to you at no charge. Read the instructions on the Claim Form carefully. To the best of your ability, fill out the Claim Form and include all the information requested. Then sign the form and mail it to: Cobb EMC Class Action Settlement c/o GCG PO Box Dublin, Ohio Claim Forms may also be submitted by fax to the Claims Administrator at (866) Members of the Settlement Class have until February 10, 2014 to submit a Claim Form. The Claim Form must be postmarked or received by this date. No payments will be provided to Class Members until after the Court approves the Settlement and any appeals are resolved (see Question 17). It is uncertain how long resolution of any appeal will take. Please be patient. 9. What am I giving up to stay in the Settlement Class? Unless you exclude yourself from this Settlement, you can t sue the Defendant, continue to sue, or be part of any other lawsuit against the Defendant about the legal issues in this case. The issues in this case include all claims that could be asserted by a Settlement Class Member relating to the failure of Cobb EMC to retire capital credits prior to December 31, Not excluding yourself from the Settlement also means that all the decisions by the Court will bind you, regardless of whether you submit a Claim Form and regardless of whether any Claim Form you submit is ultimately approved. The released claims the claims you are giving up - are described more fully in the Stipulation of Settlement, which describes exactly the legal claims that you give up if you do not exclude yourself from the Settlement. The Stipulation of Settlement is available at Excluding Yourself from the Settlement If you don t want benefits from the Settlement, and you want to keep the right to sue or continue to sue the Defendant 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. 10. How do I get out of the Settlement? You cannot exclude yourself by telephone, by fax or by . To exclude yourself from the Settlement, you must send a letter that includes the following: Your name, account number(s); billing address, service address(es) (if different than billing address), and telephone number; Any prior names and addresses where you or your entity was a member of Cobb EMC and received power; A statement that you want to be excluded from the settlement in In re Cobb EMC Class Action, Case No. 10:100353; and Your signature (or in the event of an entity, the signature of an individual authorized by your entity to request exclusion). If your account is in the name of more than one person (example: husband and wife), then both must provide the information noted above, or you must state that you are authorized to act on behalf of all joint members with respect to the Settlement. You must mail your exclusion request, so that it is postmarked or received no later than January 10, 2014, to: Cobb EMC Class Action Settlement c/o GCG ATTN: EXCLUSIONS PO Box Dublin, Ohio Page 5 of 8

6 11. If I don t exclude myself, can I sue the Defendant for the same thing later? No. Unless you exclude yourself, you give up the right to sue the Defendant for the claims that the Settlement resolves and releases. You give up these rights even if you don't submit a Claim Form and receive the benefits of the Settlement. You must exclude yourself from the Settlement Class in order to try and maintain your own lawsuit. 12. If I exclude myself from the Settlement, can I still get Settlement benefits? No. You will not get any benefits if you exclude yourself from the Settlement. If you exclude yourself from the Settlement, do not send in a Claim Form asking for benefits. 13. Do I have a lawyer in this case? The Lawyers Representing You The Court has appointed Wm. Paul Lawrence, II, Charles Siegel, Charles D. Gabriel, Samuel P. Pierce, Jr. and Larry D. Lahman as counsel for all Class Members that are former Cobb EMC members. The Court has appointed David M. Cohen and Hylton B. Dupree Jr. as counsel for all Class Members that are current Cobb EMC members. The lawyers are called Class Counsel. You will not be separately charged for these lawyers. The Court will determine the amount of Class Counsel s fees and expenses which will be paid from the Settlement fund. If you want to be represented by your own lawyer, you may hire one at your own expense and that lawyer must file an Entry of Appearance with the Court. 14. How will the lawyers be paid? Class Counsel have not received any payment for their services in pursuing the claims against the Defendant on behalf of the Settlement Class, nor have they been paid for their litigation expenses. The Court will decide how much Class Counsel will be paid. Class counsel have not submitted requests for attorneys fees or reimbursement of litigation expenses at this time. Attorneys fees, expenses and any incentive awards that may be requested for the Class Representatives will only be awarded after the Court has determined they are fair and reasonable. Attorneys fees, expenses and Class Representative incentive awards are not expected to impact the benefits received by Class Members who exercise their rights to participate in the Settlement. The applications for attorneys fees, expenses and any incentive awards for the Class Representatives will be filed with the Court by December 10, 2013, and will be available at after they are filed. Objecting to the Settlement You can tell the Court that you don t agree with the Settlement or some part of it. 15. How do I tell the Court I don t like the Settlement? If you are a member of the Settlement Class, you can object to any part of the Settlement, the Settlement as a whole, and/or Class Counsel's request for fees, expenses and Class Representative incentive awards. To object, you must submit a letter that includes the following: Your name, account number(s); billing address, service address(es) (if different than billing address), and telephone number; Any prior names and addresses where you or your entity was a member of Cobb EMC and received power; A statement saying that you object to the Settlement in In re Cobb EMC Class Action, Case No. 10:100353; The reasons you object to the Settlement, along with any supporting materials; and Your signature. If your account is in the name of more than one person (example: husband and wife), then both must provide the information noted above, or you must state that you are authorized to act on behalf of all joint members with respect to the Settlement. You must mail your objection so it is postmarked or received no later than January 10, 2014, to the following two addresses: Page 6 of 8

7 By hand or mail: and by mail: Clerk of the Superior Court Superior Court of Cobb County, State of Georgia In re Cobb EMC Class Action, Case No. 10: Haynes Street Marietta, Georgia Cobb EMC Class Action Settlement c/o GCG ATTN: OBJECTIONS PO Box Dublin, Ohio What is the difference between objecting and excluding? Objecting is simply telling the Court that you don t like something about the Settlement. You can object to the Settlement only if you do not exclude yourself from the Settlement. Excluding yourself from the Settlement is telling the Court that you do not want to be a part of the Settlement. If you exclude yourself from the Settlement, you have no basis to object to the Settlement because it no longer affects you. The Court s Settlement Approval Hearing The Court will hold a hearing to decide whether to approve the Settlement and any requests for fees, expenses and Class Representative incentive awards. You may attend and you may ask to speak, but do not have to do so. 17. When and where will the Court decide whether to approve the Settlement? The Court will hold the Settlement approval hearing at 9:00 am on February 25, 2014 (eastern time) before the Honorable J. Stephen Schuster, Superior Court of Cobb County, Courtroom 7400, 70 Haynes Street, Marietta, Georgia The hearing is called a Final Approval Hearing. You should be aware that the Court may change the date and time of the hearing without another notice being sent. The latest information will be posted on the website If you want to come to the hearing, you should check with Class Counsel before coming to be sure that the date and/or time has not changed. At this hearing, the Court will consider whether the Settlement is fair, reasonable and adequate. The Court will also consider any request by Class Counsel for attorneys' fees, expenses and incentive awards for the Class Representatives. If there are objections, the Court will consider them at this time. After the hearing, the Court will decide whether to approve the Settlement. 18. Do I have to come to the hearing? No. Class Counsel will answer questions the Court may have. But you may come at your own expense. If you send an objection, you do not have to come to court to talk about it. As long as you submit your written objection on time, to the proper address, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. 19. May I speak at the hearing? You may ask the Court for permission to speak at the Final Approval Hearing. To do so, you must send a letter saying that you intend to appear and wish to be heard. Your notice of intention to appear must include the following: Your name, account number(s); billing address, service address(es) (if different than billing address), and telephone number; Any prior names and addresses where you or your entity was a member of Cobb EMC and received power; A statement that this is your Notice of Intention to Appear in In re Cobb EMC Class Action, Case No. 10: The reasons you wish to be heard; Copies of any papers, exhibits or other evidence or information that is to be presented to the Court at the Final Approval Hearing; and Your signature. Page 7 of 8

8 You must submit your notice of intention to appear so it is postmarked or received no later than January 10, 2014 to the two addresses in Question 15. You cannot speak at the Final Approval Hearing if you excluded yourself from the Settlement Class or if you have not provided your notice of intention to appear and speak in accordance with the procedures in this Question. 20. What happens if I do nothing at all? If You Do Nothing If you do nothing you will not get money from this Settlement and you will not be able to start a lawsuit, continue with the lawsuit, or be part of any other lawsuit against the Defendant about the legal issues in this case, ever again. 21. How do I get more information? Additional Information This notice summarizes the proposed Settlement. More details are in the Stipulation of Settlement available at the Settlement website. You may also review the Stipulation of Settlement or other documents filed in the case during business hours at the Office of the Clerk of Superior Court, 70 Haynes Street, Marietta, Georgia For assistance, you may call the Claims Administrator toll free at , write to Cobb EMC Class Action Settlement, c/o GCG, PO Box 10020, Dublin, Ohio ; or visit the website of the Claims Administrator at where you can find answers to frequently asked questions about the Settlement, download copies of the Stipulation of Settlement, Claim Form and other court documents, and locate other information to help you determine whether you are a Settlement Class member. You may also contact Lead Class Counsel for former Cobb EMC members, Wm. Paul Lawrence, II, at Waters & Kraus, LLP, 3219 McKinney Avenue, Dallas, Texas 75204, (800) , plawrence@waterkraus.com, or Lead Class Counsel for current Cobb EMC members, David M. Cohen, Complex Law Group, LLC, 40 Powder Springs Street, Marietta, Georgia 30064, (770) , dcohen@complexlawgroup.com. Please do not contact the court for information about this Settlement. Dated: October 10, BY ORDER OF THE COURT SUPERIOR COURT OF COBB COUNTY STATE OF GEORGIA Page 8 of 8