I am an attorney duly licensed to practice before the Courts of the Commonwealth o f

Transcription

1 BRUCE G. MURPHY, pro se 265 Llwyds Lane Vero Beach, FL UNITED STATES DISTRICT COURT NORTI-TERN DISTRICT OF CALIFORNI A OAKLAND DIVISION In re TUT SYSTEMS, INC. SECURITIES LITIGATION This Document Relates To: ) ALL ACTIONS ) Master File No. C CW CLASS ACTION DECLARATION OF BRUCE G. MURPHY IN SUPPORT OF (1) NOTICE OF MOTION AND MOTION OF CARLOS HORACCO YUSTY, ANDRES JARAMILLO AND RODRIGO JARAMILLO FOR PAYMENT OF DAMAGES BY, AND IMPOSITIO N OF SANCTIONS ON, LERACH COUGLIN ; AND, (2) MOTION OF BRUCE G. MURPHY TO COMPEL LERACH COUGHLIN TO ALLOCATE ATTORNEYS' FEES TO MURPHY DATE: June 21, 2007 TIME : 2 :00 p.m. COURTROOM : The Honorabl e Claudia Wilken I, BRUCE G. MURPHY, declare as follows : I am an attorney duly licensed to practice before the Courts of the Commonwealth o f Virginia. I have personal knowledge of the matters stated herein and, if called upon, I could an d would competently testify thereto. I. In early December 2000, 1 was contacted by Andres Jaramillo (Jaramillo) wh o stated that he and two of his friends had purchased shares of Tut Systems (Tut) during Augus t 2000 for prices ranging from around $80 per share to about $107 per share. On November 30, 2000, Tut had announced that it was going to miss fourth quarter revenue estimates due to

2 tightening of the capital markets, which had affected some of Tut's service provider customers. As a result, the stock dropped. 2. During early December, I initiated an investigation of Tut Systems for possibl e violation of federal securities laws. I reviewed the chart, SEC filings, company releases, evaluated liability, damages, possible class period and insider selling. I found substantial inside r selling in August kept in touch with my client, Jararnillo. 3. On December 12, I spoke to Dave Walton (Walton), one of the case-starters a t Milberg Weiss Bershad Hynes & Lerach LLP (Milberg). I brought this case to his attention and informed him that I had clients. Walton said he would the new case people, Darre n [Robbins] and Randall [Steinmeyer], and he doubted Bill [Lerach] had looked at it. 4. I continued to follow the case. On January 8, Tut announced it had receivable s problems after which disclosure, I conferred with Walton. 5. On January 31, 2000, Tut announced it had taken a $29.3 million charge fo r overvalued inventory and purchase commitments after which disclosure, I conferred wit h Walton. 6. I continued to follow the company and its chart, and to keep in touch with m y client and Walton. For example, on March 15, spoke with Walton about the case. On April 19, 2001, 1 received an from my client, Jaramillo, inquiring about the status of th e case. I replied that we were still investigating the case. 7. On July 3, 1 conferred again with Walton at which time we decided to bring a securities case against Tut. 8. On July 5,1 FedExed a draft complaint for violation of the federal securities law s to my client, Jaramillo, and his two co-purchasers of Tut stock during the class period, together with a Certification of Named Plaintiff pursuant to federal securities laws. 2

3 9. The draft complaint had the Milberg firm name and my firm name as attorneys fo r plaintiff, on the caption and signature pages of the complaint. 10. The next day, on July 12, the Milberg San Francisco office filed the complaint with my three clients as the plaintiffs and the Milberg firm and me as attorneys for plaintiffs. On July 11, faxed to Walton the Certificate executed by my clients, Carlos Horacco Yusty, Andres Jararnillo and Rodrigo Jaramillo. 11. Starting in 1998, on the basis of my referral of a client to Milberg, Milberg agree d I should receive 10% of the Court-approved fees received by Milberg. Over the years, I have referred dozens of my clients to Milberg. In addition to the agreed 10% referral fees, Milberg has established a pattern of paying me 10% referral fees. 1 have received 10% referral fees fro m Milberg in at least 16 cases. 12. Following the filing of the Tut complaint, I received copies of the pleadings file d until the entry of the lead plaintiff order. After the appointment of Milberg, as co-lead counsel, Milberg cut me off the service list. 13. In May 2004, William Lerach and other California partners of Milberg withdre w from Milberg and formed the law firm of Lerach Coughlin Stoia Robbins LLP. Thereafter, othe r lawyers joined the firm and the firm name now is Lerach Coughlin Stoia Geller Rudma n Robbins LLP (the Lerach firm). 14. On October 4, 2006, I received an from Jaramillo inquiring about the suit. On October 5, 1 forwarded this to Walton. From Walton, I learned for the first time that the case had been settled a couple of years earlier. 15. Thereafter, I looked at the court docket and learned that the Court approved a $1 0 million settlement on May 14, 2004 and awarded 25% attorneys' fees. The Lerach firm failed to pay me my 10% referral fee. 3

4 16. Paragraph 2, a. 21 of the Stipulation of Settlement dated January 28, 2004, provides if the agreed $10 million is not transferred on or before thirty (30) days following the execution of the Stipulation, any untransferred portions shall bear interest at 10% per annu m from the date due until such amount is transferred to the Escrow Agent. Paragraph IV defines the Escrow Agent as the Milberg firm. 17. The Order awarding attorneys ' fees was entered May 14, 2004, and provides in part : All of the capitalized terms used herein shall have the same meanings as set forth in the Stipulation dated as of November 4, 2003 (the "Stipulation" ) 2. This Court has jurisdiction over the subject matter of this application an d all matters relating thereto, including all Members of the Settlement Class who have not timel y and validly requested exclusion. 3. The Court hereby awards Plaintiffs' Settlement Counsel attorneys' fees o f twenty-five percent of the Settlement Fund and reimbursement of expenses in an aggregat e amount of $227, together with the interest earned for the same time period and at the sam e rate as that earned on the Settlement Fund until paid. Said fees and expenses shall be allocate d among Plaintiffs' Settlement Counsel in a manner which, in their good-faith judgment, reflect s each such counsel's contribution to the institution, prosecution and resolution of the Litigation. The Court finds that the amount of fees awarded is fair and reasonable under the "percentage-ofrecovery' method. 4. The awarded attorneys ' fees and expenses, and interest earned thereon, shall be paid to Plaintiffs' Settlement Counsel from the Settlement Fund immediately after th e date this Order is executed subject to the terms, conditions and obligations of the Stipulation an d in particular 6.2 thereof, which terms, conditions and obligations are incorporated therein. 4

5 18, The Lerach firm has failed to allocate my 10% referral fee, and interest, to one. Lerach has failed to advise me of the amount of its fee. I believe its fee is in excess of $ 2 million. 19. Because Lerach Coughlin refused to allocate and pay my 10% referral fee to me, I performed additional services to recover my fee. Those services include, but are not limited to, efforts to resolve this dispute with Lerach Coughlin, PACER research, legal research an d preparation of the pleadings seeking damages and sanctions for Carlos Horacco Yusty, Andre s Jaramillo and Rodrigo Jaramillo and seeking my referral fee. I spent a minimum of 40 hours at $ per hour, totaling $19, I have used my best efforts to resolve this dispute. I have exchanged s and phone calls with Walton. I have exchanged s, letters and telephone calls with Jeff Lawrence. I have made several unanswered calls to Keith Park and sent an unanswered t o him. I have sent an unanswered to Darren Robbins. I have made two unanswered telephone calls to Bill Lerach. I have sent two unanswered s to Bill Lerach brought both the idea for this case and the clients to the Milberg/Lerach firm. This was done with the expectation that I would receive my usual and customary 10% referra l fee. Because the Lerach firm has failed to pay me my referral fee, and interest, it has been unjustly enriched. I declare under penalty of perjury under the laws of the State of California that th e foregoing is true and correct. Executed this 4th day of May, 2007, in Vero Beach, FL. /s/ Bruce G. Mu ph~ Bruce G. Murphy 5