Strougo v. Lannett Company, Inc. et al.
Lannett Company, Inc. Securities Litigation
Case No. 2:18-cv-03635-MAK

Frequently Asked Questions

 

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  • The Notice was sent to you under a July 31, 2019 Order of a United States District Court because you or someone in your family or an investment account for which you serve as custodian may have purchased or otherwise acquired Lannett securities during the period from February 8, 2018 through August 17, 2018, inclusive (“Settlement Class Period”).

    The Notice explains the class action lawsuit, the Settlement, Settlement Class Members’ legal rights in connection with the Settlement, what benefits are available, who is eligible for them, and how to get them.

    The Court in charge of the Litigation is the United States District Court for the Eastern District of Pennsylvania, and the case is known as Strougo v. Lannett Company, Inc., et al., No. 2:18-cv-03635-MAK. The case has been assigned to the Honorable Mark A. Kearney. The individuals representing the Settlement Class are the Lead Plaintiffs, and the company and individuals they sued and who have now settled are called the Defendants.

  • The Litigation is pending before the Honorable Mark A. Kearney in the United States District Court for the Eastern District of Pennsylvania (the “Court”). The initial complaint in this action was filed on August 24, 2018. On November 30, 2018, the Court entered an order appointing Lead Plaintiff. On December 26, 2018, Lead Plaintiffs filed an Amended Class Action Complaint for Violations of the Federal Securities Laws (“Complaint”) alleging violations of §§ 10(b) and 20(a) of the Securities Exchange Act of 1934 against the Defendants.

    Defendants moved to dismiss the Complaint on January 15, 2019. Lead Plaintiffs filed their opposition to the motion on February 4, 2019. Defendants filed their reply brief on February 13, 2019. On March 13, 2019, the Court issued a Memorandum granting and denying, in part, Defendants’ motion to dismiss. Specifically, the Court dismissed all claims except for the “claims against all Defendants challenging February 8, 2018 and May 9, 2018 statements describing Jerome Stevens’ then ‘significant’ or ‘large’ shareholder interests in Lannett Company” (the “Surviving Claims”).

    On March 27, 2019, the Defendants answered the Complaint. On March 28, 2019, the parties filed a Joint Report of Rule 26(f) Meeting. Following the Court’s March 13, 2019 memorandum, the parties engaged in written discovery and exchanged documents relevant to the Surviving Claims. Moreover, Lead Plaintiffs served document subpoenas on, and received documents from, certain third parties, including Jerome Stevens Pharmaceuticals, Inc. and its directors and/or shareholders.

    In May 2019, after Lead Plaintiffs’ counsel reviewed the documents produced by Defendants and other third parties, Lead Plaintiffs reevaluated the merits of the action and decided that it would be in the best interests of the Settlement Class to attempt to settle the Litigation. The discovery received contradicted Lead Plaintiffs’ theory of liability and, consequently, presented a substantial risk that the Surviving Claims would not survive any forthcoming motion for summary judgment or prevail at trial. Lead Plaintiffs’ counsel was able to secure an agreement to settle the Litigation for $300,000.00 (with estimated notice and administration costs of $100,000 to be paid in addition to and separately by Defendants) subject to the negotiation of the terms of a Stipulation of Settlement and approval by the Court.

  • The Court has not decided in favor of the Defendants or of the Lead Plaintiffs. Instead, both sides agreed to the Settlement to avoid the distraction, costs, and risks of further litigation, and Lead Plaintiffs agreed to the Settlement in order to ensure that Settlement Class Members will receive compensation.

  • The Court directed that everyone who fits this description is a Settlement Class Member:

    All persons who purchased or otherwise acquired Lannett common stock from February 8, 2018 through and including August 17, 2018, and held such stock through the close of trading on August 17, 2018 and sustained damages, except those Persons and entities that are excluded.

    Excluded from the Settlement Class are: Defendants, the officers and directors of the Company during the Settlement Class Period, members of their immediate families and their legal representatives, heirs, successors, or assigns and any entity in which Defendants have or had a controlling interest. Also excluded from the Settlement Class is any Settlement Class Member who timely and validly excludes themselves therefrom by submitting a request for exclusion in accordance with the requirements set forth in question 11 of the Notice.

     

    Please Note: Receipt of the Notice does not mean that you are a Settlement Class Member or that you will be entitled to receive a payment from the Settlement. If you are a Settlement Class Member and you wish to be eligible to participate in the distribution of proceeds from the Settlement, you are required to submit the Proof of Claim that is being distributed with the Notice and the required supporting documentation as set forth therein postmarked or submitted online at the website on or before December 13, 2019 (deadline has passed).

  • If you are not sure whether you are included, you can ask for free help. You can contact the Claims Administrator toll-free at 1-833-216-4462, or you can fill out and return the Proof of Claim form enclosed with the Notice package, to see if you qualify.

  • The Settlement provides that, in exchange for the release of the Released Claims (Defined in FAQ "What am I giving up to get a payment to stay in the settlement class?".) and dismissal of the Litigation, Defendants have agreed to pay (or cause to be paid) $300,000.00 in cash to be distributed after taxes, fees, and expenses, pro rata, to Settlement Class Members who send in a valid Proof of Claim form pursuant to the Court-approved Plan of Allocation. The Plan of Allocation is described in more detail at the end of the Notice. The additional amounts to be paid by Defendants for notice and administration costs will be used exclusively for notice and administration and will not be distributed to Settlement Class Members.

     

  • Your share of the Net Settlement Fund will depend on several things, including the total amount of claims represented by the valid Proof of Claim forms that Settlement Class Members send in, compared to the amount of your claim, all as calculated under the Plan of Allocation discussed in the Notice.

  • To be eligible to receive a payment from the Settlement, you must submit a Proof of Claim form. Read the instructions carefully, fill out the Proof of Claim, include all the documents the form asks for, sign it, and mail or submit it online so that it is postmarked or received no later than December 13, 2019 (deadline has passed).

    The Court will hold a Settlement Hearing on February 7, 2020 at 9:30 a.m.. to decide whether to approve the Settlement. If the Court approves the Settlement, there might be appeals. It is always uncertain whether appeals can be resolved, and if so, how long it would take to resolve them. It also takes time for all the Proofs of Claim to be processed. Please be patient.

  • Unless you timely and validly exclude yourself, you are staying in the Settlement Class, and that means you cannot sue, continue to sue, or be part of any other lawsuit against Defendants or their Related Parties about the Released Claims (Defined in FAQ "What am I giving up to get a payment to stay in the settlement class?".) in this case. It also means that all of the Court’s orders will apply to you and legally bind you. If you remain a Settlement Class Member, and if the Settlement is approved, you will give up all “Released Claims” (as defined in FAQ "What am I giving up to get a payment to stay in the settlement class?"), including “Unknown Claims” (Defined in FAQ "What am I giving up to get a payment to stay in the settlement class?".), against the “Released Persons” (as defined as defined in FAQ "What am I giving up to get a payment to stay in the settlement class?"):

    • “Released Claims” means any and all claims, rights, duties, controversies, obligations, demands, actions, debts, sums of money, suits, contracts, agreements, promises, damages, losses, judgments, liabilities, allegations, arguments, and causes of action of every nature and description, whether known or unknown, whether arising under federal, state, local, common, statutory, administrative, or foreign law, or any other law, rule, or regulation, at law or in equity, whether class or individual in nature, whether fixed or contingent, whether accrued or unaccrued, whether liquidated or unliquidated, whether matured or unmatured, that were asserted or could have been asserted in the Litigation arising out of or relating to (i) the purchase, acquisition, or sale of shares of Lannett common stock during the Settlement Class Period and (ii) the acts, facts, matters, allegations, transactions, events, disclosures, occurrences, representations, statements, acts, or omissions or failures to act alleged in the Litigation. “Released Claims” does not include claims to enforce the Settlement. “Released Claims” includes “Unknown Claims” as defined in ¶ 1.30 hereof.
    • “Related Parties” means each of a Defendant’s respective former, present or future parents, subsidiaries, divisions, and affiliates and the respective present and former employees, members, partners, principals, officers, directors, controlling shareholders, attorneys, advisors, accountants, auditors, and insurers and reinsurers of each of them; and the predecessors, successors, estates, spouses, heirs, executors, trusts, trustees, administrators, agents, legal or personal representatives, assigns, and assignees of each of them, in their capacity as such.
    •  “Released Persons” means each and all of the Defendants and their Related Parties, and Defense Counsel.
    •  “Unknown Claims” means any and all Released Claims which any of the Settling Parties or Settlement Class Members do not know or suspect to exist in his, her, or its favor at the time of the release of the Released Persons, Lead Plaintiffs, Lead Plaintiffs’ Counsel, Defense Counsel, or Settlement Class Members which, if known by him, her, or it, might have affected his, her, or its settlement with and release, or might have affected his, her, or its decision(s) with respect to the Settlement, including, but not limited to, whether or not to object to this Settlement or to the release of the Released Persons, Lead Plaintiffs, Lead Plaintiffs’ Counsel, Defense Counsel, or Settlement Class Members. With respect to any and all Released Claims, the Settling Parties stipulated and agree that, upon the Effective Date, the Settling Parties shall expressly waive and each of the Settling Parties shall be deemed to have, and by operation of the Judgment shall have, expressly waived the provisions, rights, and benefits of California Civil Code § 1542, which provides,
       

    A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.

    The Settling Parties shall expressly waive and each of the Settlement Class Members shall be deemed to have, and by operation of the Judgment shall have, expressly waived any and all provisions, rights, and benefits conferred by any law of any state or territory of the United States, or principle of common law, which is similar, comparable or equivalent to California Civil Code § 1542. The Settling Parties acknowledge that they may hereafter discover facts in addition to or different from those which he, she, it or their counsel now knows or believes to be true with respect to the subject matter of the Released Claims, but the Settling Parties shall expressly settle and release, and each Settlement Class Member, upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall have, fully, finally, and forever settled and released any and all Released Claims, known or unknown, suspected or unsuspected, contingent or non-contingent, whether or not concealed or hidden, which now exist, or heretofore have existed, upon any theory of law or equity now existing or coming into existence in the future, including, but not limited to, conduct which is negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to the subsequent discovery or existence of such different or additional facts. The Settling Parties acknowledge, and the Settlement Class Members shall be deemed by operation of the Judgment to have acknowledged, that the foregoing waiver was separately bargained for and is a key element of the Settlement of which the release is a part.

  • To exclude yourself from the Settlement Class and the Settlement, you must send a letter by First-Class Mail stating that you “request exclusion from the Settlement Class in the Strougo v. Lannett Company, Inc., et al. Litigation.” You cannot exclude yourself by telephone or e-mail. Your letter must include your purchases, acquisitions, and sales of Lannett securities during the Settlement Class Period, including the dates, the number of shares of Lannett securities purchased, acquired, or sold, and price paid or received for each such purchase, acquisition, or sale. In addition, you must include your name, address, telephone number, and your signature. You must mail your letter with the exclusion request so that it is postmarked no later than December 16, 2019 to (deadline has passed):

    Lannett Company, Inc. Securities Litigation
    EXCLUSIONS
    c/ o JND Legal Administration
    PO Box 91153
    Seattle, WA 98111

     

    Your exclusion request must comply with these requirements to be valid. If you ask to be excluded, you will not get any payment from the Settlement, and you cannot object to the Settlement. You will not be legally bound by anything that happens in this lawsuit, and you may be able to sue the Defendants and the other Released Persons about the Released Claims in the future

  • No. Unless you exclude yourself, you give up any rights you may potentially have to sue the Defendants and the other Released Persons for any and all Released Claims. If you have a pending lawsuit against the Released Persons speak to your lawyer in that case immediately. You must exclude yourself from the Settlement Class in this Litigation to continue your own lawsuit. Remember, the exclusion deadline is December 16, 2019 (deadline has passed).

  • No. If you exclude yourself, you should not send in a Proof of Claim to ask for any money. But you may have the right to potentially sue or be part of a different lawsuit against the Defendants and the other Released Persons.

  • The Court ordered that the law firm of Levi & Korsinsky, LLP represents the Settlement Class Members, including you. These lawyers are called Lead Counsel. If you want to be represented by your own lawyer, you may hire one at your own expense.

    Lead Counsel will apply to the Court for an award of attorneys’ fees not to exceed $75,000 (18.75% of the Settlement Amount and Notice and Administration Expenses) plus expenses not to exceed $17,500, plus interest earned on both amounts at the same rate as earned by the Settlement Fund. The Court will decide how much is paid to Lead Plaintiffs’ Counsel after reviewing the Lead Plaintiffs’ motion for fees and expenses to be filed and placed on the website no later than January 3, 2020. Such sums as may be approved by the Court will be paid from the Settlement Fund.

  • If you are a Settlement Class Member, you can comment or object to the proposed Settlement, the proposed Plan of Allocation and/or Lead Counsel’s fee and expense application. You can write to the Court setting out your comment or objection. The Court will consider your views. To comment or object, you must send a signed letter saying that you wish to comment on or object to the proposed Settlement in the Strougo v. Lannett Company, Inc., et al. Litigation. Include your name, address, telephone number, and your signature, identify the date(s), price(s), and number(s) of shares of Lannett securities you purchased, acquired, and sold during the Settlement Class Period, and state your comments or the reasons why you object to the proposed Settlement. You must also include copies of documents demonstrating such purchase(s), acquisition(s) and/or sale(s). Your comments or objection must be filed with the Court no later than December 5, 2019 (deadline has passed).

    Any person who fails to comply with the requirements for objecting to the Settlement will be deemed to have waived all such objections and will be foreclosed from raising any objection to the proposed Settlement or to any part thereof

  • Objecting is simply telling the Court you do not like something about the Settlement, attorney’s fees or payment to Lead Plaintiffs. You can object only if you stay in the Settlement Class.

    Excluding yourself is telling the Court you do not want to be paid and do not want to release any claims you think you may have against Defendants and their Related Parties. If you exclude yourself, you cannot object to the Settlement because it does not affect you.

  • The Court will hold a Settlement Hearing at 9:30 a.m., on February 7, 2020, in the Courtroom of the Honorable Mark A. Kearney, at the United States District Court for the Eastern District of Pennsylvania, James A. Byrne U.S. Courthouse, 601 Market Street, Philadelphia, PA 19106. At the hearing the Court will consider whether the Settlement and the Plan of Allocation are fair, reasonable, and adequate. If there are objections, the Court will consider them, even if you do not ask to speak at the hearing. The Court may also decide how much to pay to Lead Counsel. After the Settlement Hearing, the Court will decide whether to approve the Settlement and the Plan of Allocation. We do not know how long these decisions will take. You should be aware that the Court may change the date and time of the Settlement Hearing without another notice being sent to Settlement Class Members. If you want to attend the hearing, you should check with Lead Counsel or the Key Dates tab of the Settlement website beforehand to be sure that the date and/or time has not changed.

    No. Lead Counsel will answer questions from the Court. But you are welcome to 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 mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.

    If you object to the Settlement, the Plan of Allocation, or the fee and expense application, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include with your objection (see question 16 of the Notice) a statement saying you intend to appear. Persons who intend to object to the Settlement, the Plan of Allocation, and/or any attorneys’ fees and expenses to be awarded to Lead Counsel or Lead Plaintiffs and desire to present evidence at the Settlement Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing. Your notice of intention to appear must be filed with your objection no later than December 5, 2019 (deadline has passed) with the Clerk of Court.

    You cannot speak at the hearing if you exclude yourself from the Settlement Class.

  • No. Lead Counsel will answer questions from the Court. But you are welcome to 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 mailed your written objection on time, the Court will consider it. You may also pay your own lawyer to attend, but it is not necessary. Settlement Class Members do not need to appear at the hearing or take any other action to indicate their approval.

  • If you object to the Settlement, the Plan of Allocation, or the fee and expense application, you may ask the Court for permission to speak at the Settlement Hearing. To do so, you must include with your objection (see question 16 of the Notice) a statement saying you intend to appear. Persons who intend to object to the Settlement, the Plan of Allocation, and/or any attorneys’ fees and expenses to be awarded to Lead Counsel or Lead Plaintiffs and desire to present evidence at the Settlement Hearing must include in their written objections the identity of any witnesses they may call to testify and exhibits they intend to introduce into evidence at the Settlement Hearing. Your notice of intention to appear must be filed with your objection no later than December 5, 2019 (deadline has passed) with the Clerk of Court.

  • If you do nothing, you will not receive any money from this Settlement. In addition, unless you exclude yourself, you will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Defendants and their Related Parties about the Released Claims in this case.

  • For even more detailed information concerning the matters involved in this Litigation, you can obtain answers to common questions regarding the proposed Settlement by contacting the Claims Administrator toll-free at 1-833-216-4462. Reference is also made to the Stipulation, to the pleadings in support of the Settlement, to the Orders entered by the Court and to the other settlement related papers filed in the Litigation, which are posted on the Important Documents tab of this website and which may be inspected at the Office of the Clerk of the United States District Court for the Eastern District of Pennsylvania, 601 Market Street, Philadelphia, PA 19106, during regular business hours. For a fee, all papers filed in this Litigation are available at www.pacer.gov.

For More Information

Visit this website often to get the most up-to-date information.

Mail

Lannett Company, Inc. Securities Litigation
c/o JND Legal Administration
PO Box 91153
Seatte, WA 98111