In Re Carlotz Inc Securities Litigation

Key Facts

Issues

• The court approved the Plan of Allocation for distributing the Settlement Fund among Settlement Class Members. The court found the formula for calculation of claims of Authorized Claimants provides a fair and reasonable basis upon which to allocate among Settlement Class Members the proceeds of the Settlement Fund established by the Stipulation, with due consideration given to administrative convenience and necessity.
• The court considered the requested service award to class representatives. The court found the requested service award reasonable and approved a service award of $10,000 to Lead Plaintiff David Berger and $5,000 to Additional Plaintiff Craig Bailey, citing 15 U.S.C. § 78u-4(a)(4) which expressly allows service awards for class representatives in private securities litigation.
• The court granted final dismissal with prejudice of the Carlotz, Inc. securities litigation action against all Defendants' Releasees including CarLotz, Acamar, Acamar Partners Sponsor I LLC, Acamar Partners Merger Sub, Inc., and individual Defendants Michael W. Bor, Thomas W. Stoltz, Luis Ignacio Solorzano Aizpuru, Rebecca Polak, Juan Carlos Torres Carretero, James E. Skinner, Domenico De Sole, and Teck H. Wong. The Action and all claims contained therein, as well as all Settled Claims, are dismissed with prejudice.
• The objections of Fen Wang and Xinbao Wang are hereby overruled in full. There were no other timely objections to the Settlement. No post-Judgment objection to the Court's approval of the Plan of Allocation shall in any way disturb or affect the finality of this Judgment.
• The court evaluated the reasonableness of Lead Counsel's fee application seeking 33 1/3% of the Settlement Fund and reimbursement of litigation expenses. The court found the requested fee award reasonable and approved attorneys' fees of 33 1/3% of the Settlement Fund, plus all interest accrued on that amount, plus reimbursement of expenses in the amount of $155,185.13, plus all interest accrued on that amount, both to be paid from the Settlement Fund pursuant to the Stipulation, upon entry of this Order.
• The court issued a comprehensive release of claims and bar order. Upon the Effective Date, Plaintiffs, Plaintiffs' Releasees, and each Settlement Class Member shall be deemed to have fully, finally, and forever released all Released Claims against Defendants' Releasees. Additionally, any claims for contribution are permanently barred, enjoined and finally discharged pursuant to 15 U.S.C. § 78u4(f)(7) and any other applicable law or regulation (the Bar Order).
• The court considered whether the proposed settlement in the Carlotz, Inc. securities litigation is fair, reasonable, and adequate under Federal Rules of Civil Procedure 23. The court found the settlement was the result of arm's-length negotiations between experienced counsel representing the interests of the Plaintiff, Plaintiffs' Releasees, Settlement Class Members, and Individual Defendants. The court approved the Settlement in all respects pursuant to Rule 23(a)(4) and Rule 23(g).

Holdings

Remedies

• Upon the Effective Date, any and all claims for contribution arising out of or related to the Action by any person or entity against any Defendants' Releasees or Plaintiffs' Releasees are permanently barred, enjoined and finally discharged to the fullest extent provided by 15 U.S.C. § 78u4(f)(7) and any other applicable law or regulation. Settlement Class Members will be forever barred from commencing any action asserting Released Claims against Defendants' Releasees.
• Any final verdict or judgment that may be obtained by or on behalf of the Settlement Class or a Settlement Class Member against any person or entity subject to the Bar Order prior to the Effective Date of the Judgment shall be reduced by the greater of: (a) an amount that corresponds to the percentage of responsibility of the Defendants' Releasees for common damages; or (b) the Settlement Amount payable under the Stipulation of Settlement to the Settlement Class or Settlement Class Member for common damages.
• The Court hereby approves the Settlement pursuant to Rule 23 of the Federal Rules of Civil Procedure, finding the Settlement is fair, reasonable, adequate to, and in the best interests of the Plaintiff, Plaintiffs' Releasees, and each Settlement Class Member. The Action and all claims contained therein, as well as all Settled Claims, are dismissed with prejudice as against each and all of the Defendants' Releasees.
• Upon the Effective Date, Plaintiffs, Plaintiffs' Releasees, and each Settlement Class Member shall be deemed to have fully, finally, and forever released, relinquished, and discharged all Released Claims as against the Defendants' Releasees. Each of the Defendants shall be deemed to have been fully, finally, and forever released, relinquished, and discharged the Plaintiff, Plaintiffs' Releasees, each Settlement Class Member, and Lead Counsel from all claims arising from the investigation, institution, prosecution, assertion, settlement, or resolution of the Action.
• The Court awards attorneys' fees of 33 1/3% of the Settlement Fund, plus all interest accrued on that amount, plus reimbursement of expenses in the amount of $155,185.13, plus all interest accrued on that amount, both to be paid from the Settlement Fund pursuant to the Stipulation. The Court also awards a service award of $10,000 to Lead Plaintiff David Berger and $5,000 to Additional Plaintiff Craig Bailey.
• The Court finds and concludes that the Plan of Allocation set forth in the Notice of Pendency and Proposed Settlement of Class Action provides a fair and reasonable basis for allocating among Settlement Class Members the proceeds of the Settlement Fund. The Court hereby approves the Plan of Allocation in all respects.

Legal Principles

• The judgment may be used in other proceedings to support defenses based on principles of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim preclusion or issue preclusion. The court finds the Settlement is fair, reasonable, adequate, and in the best interests of the Plaintiff, Plaintiffs' Releasees, and each Settlement Class Member.
• The Court approved the Settlement pursuant to Rule 23 of the Federal Rules of Civil Procedure, finding it fair, reasonable, adequate, and in the best interests of all parties. Service awards of $10,000 to Lead Plaintiff David Berger and $5,000 to Additional Plaintiff Craig Bailey are awarded based on 15 U.S.C. § 78u-4(a)(4), which expressly allows service awards for class representatives in private securities litigation. The Action is dismissed with prejudice as against Defendants' Releasees, and the Settlement Fund will be disbursed by the Escrow Agent after claims processing.
• The Court finds that due and adequate notice was given to all Settlement Class Members regarding the Settlement, Plan of Allocation, and attorneys' fees application. The Court awards attorneys' fees of 33 1/3% of the Settlement Fund plus interest, reimbursement of expenses totaling $155,185.13 plus interest, and a service award of $10,000 to Lead Plaintiff and $5,000 to Additional Plaintiff. All claims against Defendants' Releasees are released, barred, and dismissed with prejudice.

Precedent Name

Cited Statute

Judge Name

Passage Text

• 16. Pursuant to and in full compliance with Rule 23 of the Federal Rules of Civil Procedure, the Court finds and concludes that due and adequate notice was directed to all Settlement Class Members advising them: (a) that Lead Counsel would seek an award of attorneys' fees of up to thirty-three and one-third percent (33 1/3%) of the Settlement Fund and reimbursement of expenses incurred in connection with the prosecution of the Action not to exceed $190,000, as well as awards up to $15,000 to Lead Plaintiff and Additional Plaintiff, collectively;and (b) that Settlement Class Members had a right to object to such application(s). The Court finds and concludes that the requested fee award is reasonable and awards attorneys' fees of 33 1/3% percent of the Settlement Fund, plus all interest accrued on that amount, plus reimbursement of expenses in the amount of $155,185.13, plus all interest accrued on that amount, both to be paid from the Settlement Fund pursuant to the Stipulation, upon entry of this Order.
• 3. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, this Court hereby approves the Settlement and finds that said Settlement is, in all respects, fair, reasonable, adequate to, and in the best interests of the Plaintiff, the Plaintiffs' Releasees, and each of the Settlement Class Members.
• 4. The Action and all claims contained therein, as well as all the Settled Claims, are dismissed with prejudice as against each and all of the Defendants' Releasees, including CarLotz, Acamar, Acamar Partners Sponsor I LLC, Acamar Partners Merger Sub, Inc., Michael W. Bor, Thomas W. Stoltz, Luis Ignacio Solorzano Aizpuru, Rebecca Polak, Juan Carlos Torres Carretero, James E. Skinner, Domenico De Sole, and Teck H. Wong.