At this time, it is not possible to make any determination as to how much any individual Settlement Class Member may receive from the Settlement.
Pursuant to the Settlement, Defendants have agreed to pay or caused to be paid six million two hundred thousand dollars ($6,200,000) in cash. The Settlement Amount will be deposited into an escrow account. The Settlement Amount plus any interest earned thereon is referred to as the “Settlement Fund.” If the Settlement is approved by the Court and the Effective Date occurs, the “Net Settlement Fund” (that is, the Settlement Fund less (a) all federal, state and/or local taxes on any income earned by the Settlement Fund and the reasonable costs incurred in connection with determining the amount of and paying taxes owed by the Settlement Fund (including reasonable expenses of tax attorneys and accountants); (b) the costs and expenses incurred in connection with providing notice to Settlement Class Members and administering the Settlement on behalf of Settlement Class Members; and (c) any attorneys’ fees and Litigation Expenses awarded by the Court) will be distributed to Settlement Class Members who submit valid Claim Forms, in accordance with the proposed Plan of Allocation or such other plan of allocation as the Court may approve.
The Net Settlement Fund will not be distributed unless and until the Court has approved the Settlement and a plan of allocation, and the time for any petition for rehearing, appeal or review, whether by certiorari or otherwise, has expired.
Neither Defendants nor any other person or entity that paid any portion of the Settlement Amount on their behalf are entitled to get back any portion of the Settlement Fund once the Court’s order or judgment approving the Settlement becomes Final. Defendants shall not have any liability, obligation or responsibility for the administration of the Settlement, the disbursement of the Net Settlement Fund or the plan of allocation.
Approval of the Settlement is independent from approval of a plan of allocation. Any determination with respect to a plan of allocation will not affect the Settlement, if approved.
Unless the Court otherwise orders, any Settlement Class Member who fails to submit a Claim Form postmarked on or before April 18, 2017, shall be fully and forever barred from receiving payments pursuant to the Settlement but will in all other respects remain a Settlement Class Member and be subject to the provisions of the Stipulation, including the terms of any Judgment entered and the releases given. This means that each Settlement Class Member releases the Released Plaintiffs’ Claims (as defined above) against the Defendants’ Releasees (as defined above) and will be enjoined and prohibited from filing, prosecuting, or pursuing any of the Released Plaintiffs’ Claims against any of the Defendants’ Releasees whether or not such Settlement Class Member submits a Claim Form.
The Court has reserved jurisdiction to allow, disallow, or adjust on equitable grounds the Claim of any Settlement Class Member.
Each Claimant shall be deemed to have submitted to the jurisdiction of the Court with respect to his, her or its Claim Form.
Only Settlement Class Members, i.e., persons and entities who purchased or otherwise acquired CVB common stock during the Settlement Class Period and were damaged as a result of such purchases or acquisitions will be eligible to share in the distribution of the Net Settlement Fund. Persons and entities that are excluded from the Settlement Class by definition or that exclude themselves from the Settlement Class pursuant to request will not be eligible to receive a distribution from the Net Settlement Fund and should not submit Claim Forms. The only security that is included in the Settlement is CVB common stock.
PROPOSED PLAN OF ALLOCATION
The objective of the Plan of Allocation is to equitably distribute the Settlement proceeds to those Settlement Class Members who suffered economic losses as a result of the alleged violations of the federal securities laws as opposed to losses caused by market or industry factors or Company specific factors unrelated to the alleged violations of law. The Plan of Allocation reflects Lead Plaintiff’s damages expert’s analysis undertaken to that end, including a review of publicly available information regarding CVB and statistical analyses of the price movements of CVB common stock and the price performance of relevant market and industry indices during the Settlement Class Period. The Plan of Allocation, however, is not a formal damage analysis.
The calculations made pursuant to the Plan of Allocation are not intended to be estimates of, nor indicative of, the amounts that Settlement Class Members might have been able to recover after a trial. Nor are the calculations pursuant to the Plan of Allocation intended to be estimates of the amounts that will be paid to Authorized Claimants pursuant to the Settlement. The computations under the Plan of Allocation are only a method to weigh the claims of Authorized Claimants against one another for the purposes of making pro rata allocations of the Net Settlement Fund.
As noted above, claims were asserted under the Exchange Act. For purposes of the Exchange Act claims, Lead Plaintiff’s damages expert estimated the alleged artificial inflation in CVB common stock to be $2.14 per share.
Subject to certain contingencies set forth below, the Net Settlement Fund will be distributed to Authorized Claimants with respect to their Recognized Loss Amounts based on their Settlement Class Period purchases of CVB common stock.
A Recognized Loss Amount will be calculated for each eligible purchase or acquisition of CVB common stock during the Settlement Class Period for which adequate documentation is provided. The calculation will depend upon several factors, including: (i) when the shares were purchased or otherwise acquired; and (ii) whether the shares were sold and, if so, when they were sold and for how much.
Calculation of Recognized Loss Amounts will be based on the level of alleged artificial inflation in the price of the CVB common stock at the time of purchase or acquisition and at the time of sale, if sold. In this case, Lead Plaintiff alleges that Defendants violated the Exchange Act by making false and misleading statements during the Settlement Class Period, which had the effect of artificially inflating the price of CVB common stock. Defendants deny all such allegations.
In order to have recoverable damages under the Exchange Act claims, plaintiffs must prove that disclosure of the alleged misrepresentation is the cause of the decline in the price of the security. The alleged corrective disclosure that removed the alleged artificial inflation from the price of CVB common stock occurred after the close of trading on August 9, 2010. Accordingly, in order to have a compensable loss, CVB common stock purchased or otherwise acquired from March 4, 2010, through August 9, 2010, must have been held until at least the end of trading on August 9, 2010, the day of the corrective disclosure.
To the extent an Authorized Claimant does not satisfy the condition set forth in the preceding paragraph, his, her or its Recognized Loss Amount for those transactions will be zero.
CALCULATION OF RECOGNIZED LOSS AMOUNTS
Based on the formula set forth below, a “Recognized Loss Amount” will be calculated for each purchase or acquisition of CVB common stock during the Settlement Class Period that is listed in the Proof of Claim Form and for which adequate documentation is provided. In the calculations below, if a Recognized Loss Amount calculates to a negative number, that Recognized Loss Amount shall be zero.
- For each share of CVB common stock purchased or otherwise acquired between March 4, 2010, and August 9, 2010, inclusive, and:
- Sold prior to the close of trading on August 9, 2010, the Recognized Loss Amount is $0.00.
- Sold at a loss between August 10, 2010, through the close of trading on November 5, 2010, inclusive, the Recognized Loss Amount shall be the least of (but not less than zero): (a) $2.14; (b) purchase/acquisition price minus the sale price; and (c) purchase/acquisition price minus the PSLRA rolling average price on the date of sale as set forth in Table A attached to the end of the Notice.
- Still held as of the close of trading on November 5, 2010, the Recognized Loss Amount shall be the lesser of (but not less than zero): (a) $2.14; and (b) the purchase/acquisition price minus the PSLRA 90-day look back price of $7.55 per share.
The Net Settlement Fund will be allocated among all Authorized Claimants whose Distribution Amount (defined below) is $10.00 or greater.
If a Settlement Class Member has more than one purchase/acquisition or sale of CVB common stock, all purchases/acquisitions shall be matched on a First In, First Out (“FIFO”) basis. Settlement Class Period sales will be matched first against any holdings at the beginning of the Settlement Class Period, and then against purchases/acquisitions in chronological order, beginning with the earliest purchase/acquisition made during the Settlement Class Period.
A Claimant’s “Recognized Claim” under the Plan of Allocation shall be the sum of his, her or its Recognized Loss Amounts for all of the CVB common stock purchased or otherwise acquired during the Settlement Class Period.
The Net Settlement Fund will be distributed to Authorized Claimants on a pro rata basis based on the relative size of their Recognized Claims. Specifically, a “Distribution Amount” will be calculated for each Authorized Claimant, which shall be the Authorized Claimant’s Recognized Claim divided by the total Recognized Claims of all Authorized Claimants, multiplied by the total amount in the Net Settlement Fund. If any Authorized Claimant’s Distribution Amount calculates to less than $10.00, it will not be included in the calculation and no distribution will be made to such Authorized Claimant.
Purchases or acquisitions and sales of CVB common stock shall be deemed to have occurred on the “contract” or “trade” date as opposed to the “settlement” or “payment” date. The receipt or grant by gift, inheritance or operation of law of CVB common stock during the Settlement Class Period shall not be deemed a purchase, acquisition or sale of CVB common stock for the calculation of an Authorized Claimant’s Recognized Loss Amount, nor shall the receipt or grant be deemed an assignment of any claim relating to the purchase/acquisition of any CVB common stock unless (i) the donor or decedent purchased or otherwise acquired such CVB common stock during the Settlement Class Period; (ii) no Claim Form was submitted by or on behalf of the donor, on behalf of the decedent, or by anyone else with respect to such CVB common stock; and (iii) it is specifically so provided in the instrument of gift or assignment.
The date of covering a “short sale” is deemed to be the date of purchase or acquisition of the CVB common stock. The date of a “short sale” is deemed to be the date of sale of the CVB common stock. Under the Plan of Allocation, however, the Recognized Loss Amount on “short sales” is zero. In the event that a Claimant has an opening short position in CVB common stock, the earliest Settlement Class Period purchases or acquisitions of common stock shall be matched against such opening short position, and not be entitled to a recovery, until that short position is fully covered.
Option contracts are not securities eligible to participate in the Settlement. With respect to CVB common stock purchased or sold through the exercise of an option, the purchase/sale date of the CVB common stock is the exercise date of the option and the purchase/sale price of the CVB common stock is the exercise price of the option.
To the extent a Claimant had a market gain with respect to his, her, or its overall transactions in CVB common stock during the Settlement Class Period, the value of the Claimant’s Recognized Claim shall be zero. Such Claimants shall in any event be bound by the Settlement. To the extent that a Claimant suffered an overall market loss with respect to his, her, or its overall transactions in CVB common stock during the Settlement Class Period, but that market loss was less than the total Recognized Claim calculated above, then the Claimant’s Recognized Claim shall be limited to the amount of the actual market loss.
For purposes of determining whether a Claimant had a market gain with respect to his, her, or its overall transactions in CVB common stock during the Settlement Class Period or suffered a market loss, the Claims Administrator shall determine the difference between (i) the Total Purchase Amount1 and (ii) the sum of the Total Sales Proceeds2 and Total Holding Value.3 This difference shall be deemed a Claimant’s market gain or loss with respect to his, her, or its overall transactions in CVB common stock during the Settlement Class Period.
After the initial distribution of the Net Settlement Fund, the Claims Administrator shall make reasonable and diligent efforts to have Authorized Claimants cash their distribution checks. To the extent any monies remain in the fund nine (9) months after the initial distribution, if Lead Counsel, in consultation with the Claims Administrator, determines that it is cost-effective to do so, the Claims Administrator shall conduct a re-distribution of the funds remaining after payment of any unpaid fees and expenses incurred in administering the Settlement, including for such re-distribution, to Authorized Claimants who have cashed their initial distributions and who would receive at least $10.00 from such re-distribution. Additional re-distributions to Authorized Claimants who have cashed their prior checks and who would receive at least $10.00 on such additional re-distributions may occur thereafter if Lead Counsel, in consultation with the Claims Administrator, determines that additional re-distributions, after the deduction of any additional fees and expenses incurred in administering the Settlement, including for such re-distributions, would be cost-effective. At such time as it is determined that the re-distribution of funds remaining in the Net Payment pursuant to the Plan of Allocation, or such other plan of allocation as may be approved by the Court, shall be conclusive against all Authorized Claimants. No person shall have any claim against Lead Plaintiff, Plaintiffs’ Counsel, Lead Plaintiff’s damages expert, Defendants, Defendants’ Counsel, or any of the other Releasees, or the Claims Administrator or other agent designated by Lead Counsel arising from distributions made substantially in accordance with the Stipulation, the plan of allocation approved by the Court, or further Orders of the Court. Lead Plaintiff, Defendants and their respective counsel, and all other Defendants’ Releasees, shall have no responsibility or liability whatsoever for the investment or distribution of the Settlement Fund, the Net Settlement Fund, the plan of allocation, or the determination, administration, calculation, or payment of any Claim Form or nonperformance of the Claims Administrator, the payment or withholding of taxes owed by the Settlement Fund, or any losses incurred in connection therewith.
The Plan of Allocation set forth herein is the plan that is being proposed to the Court for its approval by Lead Plaintiff after consultation with its damages expert. The Court may approve this plan as proposed or it may modify the Plan of Allocation without further notice to the Settlement Class. Any Orders regarding any modification of the Plan of Allocation will be posted on the Key Dates/Docs page.
1 The “Total Purchase Amount” is the total amount the Claimant paid (excluding commissions and other charges) for CVB common stock purchased or otherwise acquired during the Settlement Class Period.
2 The Claims Administrator shall match any sales of CVB common stock during the period from March 4, 2010, through and including November 5, 2010, first against the Claimant’s opening position in CVB common stock (the proceeds of those sales will not be considered for purposes of calculating market gains or losses). The total amount received (excluding commissions and other charges) for sales of CVB common stock during the period from March 4, 2010, through and including November 5, 2010 (if the sale can be matched against a Settlement Class Period purchase/acquisition) shall be the “Total Sales Proceeds.”
3 The Claims Administrator shall ascribe a holding value of $8.49 to CVB common stock purchased or otherwise acquired during the Settlement Class Period and still held as of the close of trading on November 5, 2010.
Settlement Fund is not cost-effective, the remaining balance shall be contributed to non-sectarian, not-for-profit organization(s), to be recommended by Lead Counsel and approved by the Court.