PHILADELPHIA--(BUSINESS WIRE)--RAIT Financial Trust (“RAIT”) today announced the issuance of the following summary notice of pendency and proposed settlement of shareholder derivative action:
ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF THE COMMON STOCK OF RAIT FINANCIAL TRUST AS OF MARCH 4, 2016, INCLUDING ANY AND ALL OF THEIR RESPECTIVE SUCCESSORS IN INTEREST, PREDECESSORS, REPRESENTATIVES, TRUSTEES, EXECUTORS, ADMINISTRATORS, HEIRS, ASSIGNS OR TRANSFEREES, IMMEDIATE AND REMOTE, AND ANY PERSON OR ENTITY ACTING FOR OR ON BEHALF OF, OR CLAIMING UNDER ANY OF THEM, AND EACH OF THEM.
This Summary Notice announces the proposed settlement (the “Settlement”) of the shareholder derivative action captioned Lobins v. Brown, et al., November 2015, No. 003347 (the “Action”) now pending in the Court of Common Pleas of Philadelphia County, Pennsylvania (the “Court”), involving certain current and former officers and trustees of RAIT, a nominal defendant. The existence of the Action, and the parties’ agreement in principle to settle it, were previously announced by RAIT in a Form 8-K filed with the U.S. Securities and Exchange Commission (“SEC”) on December 8, 2015.
The Action alleges that various current and former officers and trustees of RAIT breached their fiduciary duties in connection with certain restructuring fees paid to Taberna Capital Management, LLC (“TCM”), a subsidiary of RAIT. These restructuring fees were the subject of an investigation by the staff of the SEC, the settlement of which included, among other things, a payment by TCM without admitting or denying the SEC’s findings, as disclosed in a Form 8-K filed by RAIT with the SEC on September 16, 2014. Defendants have denied and continue to deny each and all of the allegations made by Plaintiff.
The Settlement consists of the adoption by RAIT of additions to its Trust Governance Guidelines and the creation of a Board-level Risk Management Committee. The Action is not a “class action” and no individual shareholder has the right to receive any direct recovery from the Settlement. The Settlement, if approved by the Court, will fully and finally resolve the issues raised in the Action.
If you have not already reviewed the full Notice of Pendency and Settlement of Shareholder Derivative Action (the “Notice”) and the Stipulation and Agreement of Settlement (the “Stipulation”) dated February 19, 2016 (along with its exhibits), those documents are available on RAIT’s website at http://www.rait.com and you are encouraged to review them. You may also inspect those documents at the office of the Prothonotary of the Court, City Hall, Philadelphia, PA 19107, during regular business hours of each business day. This Summary Notice should be read in conjunction with, and is qualified by reference to, the full Notice and the Stipulation.
If you are a record or beneficial shareholder of RAIT as of March 4, 2016, your rights will be affected by the Settlement described above. The Court will hold a hearing on June 7, 2016, at 11:00 a.m. at City Hall, Room 425, Philadelphia, Pennsylvania 19107, at which the Court will consider: (i) whether to approve the settlement as fair, reasonable, adequate and in the best interests of RAIT and its shareholders; (ii) whether to dismiss the Action and whether the releases set forth in the Stipulation should be made full and final; (iii) whether the Notice and this Summary Notice provided to RAIT shareholders conformed with Court rules and due process; and (iv) whether the Court should approve Plaintiff’s counsel’s request for attorneys’ fees and reimbursement of expenses in an aggregate amount no greater than $250,000 (the “Fee Award”), as well as such other matters as may properly come before the Court.
Any record or beneficial shareholder of RAIT as of March 4, 2016, who wishes to object to the Settlement, the Order and Final Judgment proposed to be entered, or Plaintiff’s counsel’s requested Fee Award, or who otherwise wishes to be heard must, on or before May 24, 2016, file with the Prothonotary of the Court of Common Pleas, City Hall, Philadelphia, PA 19107, and serve by overnight mail or hand delivery upon all of the counsel listed immediately below: (1) a written notice of intention to appear; (2) evidence proving current ownership of RAIT common stock, including the number of shares of RAIT common stock and the date of purchase; (3) a detailed statement of such shareholder’s objection to any matters before the Court; and (4) the grounds for such objections and/or the reasons that he, she or it wants to appear and be heard, as well as all documents and writings such person wants the Court to consider.
|Eric L. Zagar||Dana B. Klinges|
|Kessler Topaz Meltzer & Check, LLP||Duane Morris LLP|
|280 King of Prussia Road||30 South 17th Street|
|Radnor, PA 19087||Philadelphia, PA 19103-4196|
|Jay A. Dubow||William M. McSwain|
|Pepper Hamilton LLP||Drinker Biddle & Reath LLP|
|3000 Two Logan Square||One Logan Square, Ste. 2000|
|Eighteenth and Arch Streets||Philadelphia, PA 19103-6996|
|Philadelphia, PA 19103-2799|
|William P. Thornton|
|Stevens & Lee|
|1818 Market Street|
|Philadelphia, PA 19103|
Unless the Court otherwise directs, anyone who does not make an objection in the manner provided shall be deemed to have waived his, her or its objection and shall forever be barred from making any such objection or otherwise contesting the terms of the settlement.
Any inquiries regarding the Settlement or Fee Award may be directed to Plaintiff’s counsel:
Eric Zagar, Esq.
Kessler Topaz Meltzer & Check, LLP
280 King of Prussia Road
Radnor, PA 19087
DO NOT CALL OR WRITE THE COURT OR RAIT REGARDING THIS SUMMARY NOTICE. For general Court information, such as hours and accessibility, contact (215) 686-7000.