8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228 Page 1 of 5 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ANDERSON DIVISION IN RE: LANDAMERICA 1031 EXCHANGE SERVICES, INC., INTERNAL REVENUE SERVICE 1031 TAX DEFERRED EXCHANGE LITIGATION Angela M. Arthur, et al., vs. Plaintiffs, SunTrust Bank, et al., Defendants. Case No. MDL No. 2054 Southern District of California C.A. No. 3:09-cv-00054 District of South Carolina C.A. No. 8:09-cv-00415 Class Action [Jury Trial Demanded] MOTION TO APPROVE NOTICE OF PROPOSED CLASS ACTION SETTLEMENT PURSUANT TO 28 U.S.C. 1715 Defendants Theodore L. Chandler, Jr., G. William Evans, Stephen Connor, Ronald B. Ramos, Devon M. Jones and Brenton J. Allen, (collectively the Settling Defendants, by their undersigned counsel, respectfully request that the Court approve the form of their proposed Notice of Proposed Class Action Settlement pursuant to section 3 of the Class Action Fairness Act ( CAFA, 28 U.S.C. 1715 (the CAFA Notice. A copy of the proposed CAFA Notice is attached to this Motion. The Plaintiffs in the above-captioned class action filed a proposed settlement on June 27, 2012. CAFA requires each defendant participating in a proposed class action settlement to deliver notice of the proposed settlement to all appropriate Federal and State officials not later than ten (10 days after the proposed settlement is filed in court. See 28 U.S.C. 1715(b. The notice must include the following: 1. A copy of the complaint, including any materials filed therewith, and any amended complaints; 4828-5331-7903.1
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228 Page 2 of 5 2. Notice of any scheduled judicial hearing in the class action; 3. Any proposed or final notification to class members of: (A the class members opt-out rights or, if no opt-out right exists, a statement to that effect, and (B the proposed settlement; 4. Any proposed or final class action settlement; 5. Any settlement or other agreement contemporaneously made between class counsel and counsel for the defendants; 6. Any final judgment or notice of dismissal; 7. The names of class members residing in each state and the estimated proportionate share of their claims to the entire settlement, or, if this is not feasible, a reasonable estimate of the number of class members residing in each State and the estimated proportionate share of their claims to the entire settlement; and 8. Any written or judicial opinion relating to items 3 through 6, above. See 28 U.S.C. 1715(b(1-(8. The Settling Defendants plan to serve the proposed CAFA Notice, including a CD containing the materials listed in Appendix A, on the Federal and State authorities listed in Exhibit B. The Notice (not including the CD is enclosed as Exhibit A. The proposed CAFA Notice complies with 28 U.S.C. 1715 and satisfies all requirements of section 1715(b. The Settling Defendants will serve the proposed CAFA Notice on the appropriate Federal and State officials within 10 days of the filing of the proposed settlement with this Court. Once service is accomplished, the Settling Defendants will submit appropriate proof of the required service. For the reasons stated above, the Settling Defendants respectfully request that this Court approve their proposed CAFA Notice. 4828-5331-7903.1 2
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228 Page 3 of 5 Dated: June 28, 2012. Respectfully submitted, s/ John J. Pringle, Jr. John J. Pringle, Jr. Ellis, Lawhorne & Sims, P.A. 1501 Main Street, 5 th Floor Columbia, SC 29201 (t 803.343.1270 Attorneys for Defendants Theodore L. Chandler, Jr.; G. William Evans; Ronald B. Ramos; Devon M. Jones; and Brenton J. Allen Scott L. Fredericksen David A. Hickerson Foley & Lardner LLP Washington Harbour 3000 K Street, N.W. Suite 600 Washington, D.C. 20007-5109 (t 202.672.5300 Attorneys for Defendants Theodore L. Chandler, Jr.; G. William Evans; Ronald B. Ramos; and Devon M. Jones Steven A. Reiss Weil, Gotshal & Manges LLP 757 Fifth Avenue New York, New York 10153 (t 212.310.8174 Attorneys for Brenton J. Allen s/ Henry L. Parr, Jr. Henry L. Parr, Jr. Wyche 44 East Camperdown Way Greenville, SC 29601 (t 864.242.8209 Attorneys for Stephen Connor John J. Eklund Calfee, Halter & Griswold LLP The Calfee Building 1405 East Sixth Street Cleveland, OH 44114 (t 216.622.8211 Attorneys for Stephen Connor 4828-5331-7903.1 3
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228 Page 4 of 5 Appendix A 1. A copy of the complaint and any materials filed with the complaint and any amended complaints (except such materials shall not be required to be served if such materials are made electronically available through the Internet and such service includes notice of how to electronically access such material a. Complaint, Arthur v. SunTrust Banks,, C.A. No. 3:09-cv-00054 (S.D. Calif. (filed January 14, 2009 b. Class Action Complaint, Terry v. SunTrust Banks, Inc., C.A. No. 2009- CP-04-00373 (S. Carolina Court of Common Pleas, Tenth Judicial Circuit (filed February 2, 2009 c. Amended Class Action Complaint, Terry v. SunTrust Banks, Inc.,C.A. No. 2009 CP-04-00373 (S. Carolina Court of Common Pleas, Tenth Judicial Circuit (filed February 17, 2009 d. Amended Consolidated Complaint, In re: LandAmerica 1031 Exchange Services, Inc. Internal Revenue Service 1031 Tax Deferred Exchange Litigation, Case No. MDL No. 2054 (D.S.C. (filed August 3, 2009 e. Second Amended Consolidated Complaint In re: LandAmerica 1031 Exchange Services, Inc. Internal Revenue Service 1031 Tax Deferred Exchange Litigation, Case No. MDL No. 2054 (D.S.C.. (filed October 6, 2010 2. Notice of any scheduled judicial hearing in the class action. a. If a document is entered in the docket noticing the July 12, 2012 hearing, we will include that notice 3. Any proposed or final notification to class members of (A(i the members rights to request exclusion from the class action; or (ii if no right to request exclusion exists, a statement that no such right exists; and (B a proposed settlement of a class action. a. The Notice of (a Certification of a Settlement Class; (b Appointment of Class Counsel, and (c Application for Approval of Class Settlement, attached to Plaintiffs Memorandum in Support of Motion for Order Approving Certification of a Rule 23(b(3 Settlement Class, For Appointment of Class Representatives and Class Counsel, and for Approval of Form and Manner of Notice to the Class, filed June 27, 2012. 4. Any proposed or final class action settlement; a. The Class Action Settlement Agreement, attached to Plaintiffs Memorandum in Support of Motion for Order Approving Certification of a Rule 23(b(3 Settlement Class, For Appointment of Class Representatives and Class Counsel, and for Approval of Form and Manner of Notice to the Class, filed June 27, 2012. 5. Any settlement or other agreement contemporaneously made between class counsel and counsel for the defendants; 4828-5331-7903.1 4
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228 Page 5 of 5 a. The Settlement Agreement between the LFG Trustee, the LES Trustee, certain former officers and directors of LFG and/or LES; Settlement Class Counsel, and certain insurers, referenced in Plaintiffs Memorandum in Support of Motion for Order Approving Certification of a Rule 23(b(3 Settlement Class, For Appointment of Class Representatives and Class Counsel, and for Approval of Form and Manner of Notice to the Class, filed June 27, 2012. 6. Any final judgment or notice of dismissal; a. The Order dated June 15, 2011, dismissing the second amended complaint, insofar as it related to SunTrust, for failure to state a claim upon which relief may be granted. 7. If feasible, the names of class members who reside in each State and the estimated proportionate share of the claims of such members to the entire settlement to that State s appropriate State official; or (B if the provision of information under subparagraph (A is not feasible, a reasonable estimate of the number of class members residing in each State and the estimated proportionate share of the claims of such members to the entire settlement; a. The CD will contain a schedule based on a spreadsheet prepared by Class Counsel based on records of the LES bankruptcy. In addition to commingled exchangers, the schedule will contains the names of assignors who have been assigned claims by commingled exchangers. For each commingled exchanger and assignee listed, the schedule will set forth the name of the last known addresses provided to Class Counsel by the LES Trustee, the amount of the allowed claim and the state of residency. The CD will also contain a spreadsheet setting forth for each state, a reasonable estimate of the proportionate share of the settlement attributable to class members residing in the state. This spreadsheet will assume there are no opt-outs and, with respect to assignments, will attribute settlement amounts to the assignee, not the assignor. 8. Any written or judicial opinion relating to items 3 through 6, above. a. None 4828-5331-7903.1 5
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228-1 Page 1 of 4 VIA U.S. MAIL Class Action Fairness Act ( CAFA Notice of Proposed Class Action Settlement July, 2012 Re: Notice of Proposed Class Action Settlement in In Re: LandAmerica 1031 Exchange Services, Inc. Internal Revenue Service 1031 Tax Deferred Exchange Litigation Dear Sir or Madam: Pursuant to Section 3 of the Class Action Fairness Act ( CAFA, 28 U.S.C. 1715, you are hereby notified of the proposed settlement (the Settlement Agreement of certain purported class actions that were consolidated by the Judicial Panel on Multidistrict Litigation in the abovecaptioned action (the Action currently pending before the United States District Court for the District of South Carolina, Anderson Division (the Court. 1 This notice is provided on behalf of individual defendants Theodore L. Chandler, Jr., G. William Evans, Stephen Connor, Ronald B. Ramos, Devon M. Jones and Brenton J. Allen, (collectively the Settling Defendants. In the Action, the plaintiffs allege that the claims stated in the Amended Consolidated Complaint arise out of the failure of LandAmerica 1031 Exchange Services, Inc. ( LES to complete Internal Revenue Code Section 1031 Exchange transactions. The lawsuit alleges that the Settling Defendants, former officers and/or directors of LES and/or its parent company, LandAmerica Financial Group, Inc. ( LFG breached a fiduciary duty, were negligent, engaged in fraud and/or fraudulent concealment, engaged in constructive fraud, which proximately resulted in losses to certain LES commingled exchangers. The Settling Defendants dispute these allegations, assert that they acted reasonably and appropriately at all times with respect to the commingled exchangers, and maintain that they did not engage in any misconduct of any kind. The Settling Defendants have moved to dismiss all claims against them on multiple grounds, including but not limited to, alleged absence of subject matter jurisdiction, alleged non-existence of tort duties to the commingled exchangers, etc. However, to avoid further expense, inconvenience, and burdensome and protracted litigation, the Settling Defendants have agreed with the plaintiffs to settle this action, as discussed below. As required under section 3 of CAFA, the Settling Defendants state as follows: (1 The Complaints, including all amended complaints, are provided in electronic form on the enclosed CD. In addition, the Complaints filed in the Action are available on the Internet via the federal government s Pacer service at https://ecf.scd.uscourts.gov/cgibin/iqquerymenu.pl?164851. Additional information about the federal government s Pacer service may be found at http://pacer.psc.uscourts.gov. 1 A list of these purported class actions is attached as Exhibit F. 4827-2336-8208.1
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228-1 Page 2 of 4 Page 2 (2 The Class Action Settlement Agreement was filed with the Court on June 27, 2012. The Court has not yet approved the Settlement Agreement. The Court has scheduled a hearing to consider preliminary approval of the Settlement Agreement for 4:00 p.m. on July 12, 2012 at the Matthew J. Perry, Jr. Courthouse, 901 Richland Street, Columbia, SC 20201. A notice for that hearing and notices for every other judicial hearing currently scheduled in this action are provided in electronic form on the enclosed CD. (3 The proposed Notice of (a Certification of a Settlement Class, (b appointment of Class Counsel, and (c application for Approval of Class Settlement ( Class Notice to putative class members (as defined below, which Plaintiffs have presented to the Court, is provided in electronic form on the enclosed CD. (The defined settlement class is discussed below in paragraph 7. The proposed Class Notice provides for a right to request exclusion from the class action. (4 The Class Action Settlement Agreement is provided in electronic form on the enclosed CD. Also provided on the enclosed CD is the agreement settling claims held by the bankruptcy estate of LFG ( LFG Trust and the bankruptcy estate of LES ( LES Trust against certain of the settling defendants and other former officers and directors of LFG and/or LES that counsel to the named plaintiffs signed on the same date as the Class Action Settlement Agreement. (5 Other than the settlement agreements disclosed in paragraph 4, above, there are no contemporaneous agreements between counsel for the plaintiffs and counsel for the Settling Defendants. (6 No final judgment or notice of dismissal has been entered with respect to the Settling Defendants. Provided on the enclosed CD is an opinion dismissing the Second Amended Complaint with respect to claims asserted by the plaintiffs against SunTrust, a codefendant of the Settling Defendants, and the judgment that was entered with respect to SunTrust. (7 The putative settlement class is defined in section 1.4, pp. 9-10, of the Settlement Agreement. Settlement Class means, for purposes of settlement only, each and every person and entity (including the Settlement Class Representatives who entered into one or more 1031 exchange contracts with LandAmerica 1031 Exchange Services, Inc. ( LES after February 11, 2008, and whose funds for 1031 exchange transactions were commingled, in whole or in part, with funds of other 1031 customers of LES, and who has been denied access (or who did not receive timely access pursuant to the commingled exchanger s 1031 exchange contract to any of those funds as a result of or arising out of (a the bankruptcy of LES, or (b any of the events, acts or conduct alleged in the ACC or the SACC filed in this Class Action. The Settlement Class shall also include any person or entity that holds an assignment,
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228-1 Page 3 of 4 Page 3 participation, or other interest in a claim relating to or arising from a person's or entity's denial of access (or from not receiving timely access to commingled exchanged funds pursuant to a LandAmerica 1031 Exchange Services, Inc. exchange contract. In exchange for good and valuable consideration, either $4 million or $4.2 million shall be paid into a settlement fund from which, subject to Court approval, payment of attorneys fees and expenses, payment Costs of Administration (as defined in the Settlement Agreement, and payments to Settlement Class members shall be made. While it is possible that there may be members of the Settlement Class that cannot be identified at this time, most if not all of the Settlement Class members are identified in the Exhibit C on the enclosed CD, which includes exchangers who have filed claims relating to the bankruptcy of LES or notified the Trustee that they have been assigned rights to the claims to another Settlement Class members claims. (8 No written judicial opinions exist relating to the materials described in items (3 - (6 above. Please acknowledge receipt of this notice by date-stamping the additional copy provided for that purpose and returning it in the self-addressed, postage-prepaid envelope also enclosed. Very truly yours, Scott L. Fredericksen Foley & Lardner LLP Washington Harbour 3000 K Street, N.W. Suite 600 Washington, D.C. 20007 Telephone: 202-295-4799 Facsimile: 202-672-5399 Email: SFredericksen@foley.com Counsel for Theodore L. Chandler, Jr., G. William Evans, Ronald Ramos, and Devon Jones Steven A. Reiss Weil, Gotshal & Manges LLP 767 Fifth Avenue New York, New York 10153 Telephone: 212-310-8174 Facsimile: 212-310-8007 Email: Steven.reiss@weil.com Counsel for Brenton J. Allen
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228-1 Page 4 of 4 Page 4 John J. Eklund Calfee, Halter & Griswold LLP The Calfee Building 1405 East Sixth Street Cleveland, OH 44114 Telephone: 216-622-8211 Facsimile: 216-241-0816 Email: JEklund@calfee.com Counsel for Stephen Conner Enclosure
8:09-mn-02054-JFA Date Filed 06/28/12 Entry Number 228-2 Page 1 of 1 UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA ANDERSON DIVISION IN RE: LANDAMERICA 1031 EXCHANGE SERVICES, INC., INTERNAL REVENUE SERVICE 1031 TAX DEFERRED EXCHANGE LITIGATION Angela M. Arthur, et al., vs. Plaintiffs, SunTrust Bank, et al., Defendants. Case No. MDL No. 2054 Southern District of California C.A. No. 3:09-cv-00054 District of South Carolina C.A. No. 8:09-cv-00415 Class Action [Jury Trial Demanded] [PROPOSED] ORDER ON THE MOTION TO APPROVE NOTICE OF PROPOSED CLASS ACTION SETTLEMENT PURSUANT TO 28 U.S.C. 1715 Having considered Defendants Theodare L. Chandler, Jr., G. William Evans, Stephen Connor, Ronald B. Ramos, Devon M. Jones and Brent J. Allen s (collectively the Settling Defendants Motion to Approve Notice of Proposed Class Action Settlement Pursuant to 28 U.S.C. 1715 (the Motion and Exhibits in support thereof, NOW, THEREFORE, IT IS HEREBY ORDERED THAT: The Court hereby approves the form of the Settling Defendants proposed Notice of Proposed Class Action Settlement (the CAFA Notice and finds that, upon the mailing of the CAFA Notice in the time and manner as set forth in the Motion, the Settling Defendants will have complied with the Class Action Fairness Act, 28 U.S.C. 1715. AND IT IS SO ORDERED. Dated:, 2012 Joseph F. Anderson United States District Judge