Class Action Settlement Agreement

Transcription

1 Class Action Settlement Agreement 1. Parties This Class Action Settlement Agreement (this Class Action Agreement ) is entered into by and between the following Parties: Charlene Sue Cox, Trustee of Charlene Sue Cox Revocable Trust, dated ; Rose E. Hutchinson; Timothy A. Hutchinson; Leslie Hutchinson; Nicolas Hutchinson; George Burton Rex; Melissa Rae Rex; Robert Shelton; Edith Shelton; Edith Shelton as Custodian for Amy Shelton; and Wildish Standard Paving Co., an Oregon corporation ( Plaintiffs ), on the one hand, and Umpqua Bank, a state chartered commercial bank, for itself and as successor to Centennial Bank ( Umpqua Bank ), on the other hand. For purposes of this Class Action Agreement, Plaintiffs and Umpqua Bank may be referred to collectively as the "Parties" and each separately as a "Party". 2. Recitals 2.1 Plaintiffs have filed a putative class action against Umpqua Bank and others entitled Charlene Sue Cox et al. v. Holcomb Family L.P. et al., which is pending in the Circuit Court of the State of Oregon for the County of Multnomah (the State Court ) as Case No (the State Class Action ). In the State Class Action, Plaintiffs, acting for themselves and on behalf of similarly-situated putative class members, allege, among other things, that via its provision of banking products and services Umpqua Bank materially aided in the sales of securities to Plaintiffs by Berjac of Oregon and Berjac of Portland in violation of the Oregon Securities Law. Umpqua Bank denies those allegations. For purposes of this Class Action Agreement, Plaintiffs and all similarly-situated putative class members are referred to collectively as the Settlement Class. The Parties believe that almost all of the members of the Settlement Class are also unsecured creditors in the Berjac Bankruptcy (defined below); and that almost all of the unsecured creditors in the Berjac Bankruptcy are also members of the Settlement Class. 2.2 In connection with the bankruptcy case entitled In re Berjac of Oregon, pending in the United States Bankruptcy Court for the District of Oregon (the Bankruptcy Court ) as Case No tmr7 (the Berjac Bankruptcy ), Thomas A. Class Action Settlement Agreement Page 1 of 10

2 Huntsberger acting in his capacity as trustee of the Berjac Bankruptcy Estate ( Trustee ), has commenced against Umpqua Bank and its parent bank holding company, Umpqua Holdings Corporation, the adversary proceeding entitled Huntsberger v. Umpqua Holdings Corp., et al., pending in the United States District Court for the District of Oregon (the District Court ) as Case No. 6:14-cv AA (collectively, the Adversary Proceeding ). 2.3 Plaintiffs, Trustee, Umpqua Bank, and Umpqua Holdings Corporation each participated in mediation before the Honorable Thomas M. Coffin, United States Magistrate Judge, on February 18, 2016, April 20, 2016 and May 31, Following good-faith, adversarial, and arm s-length negotiations, Plaintiffs reached a compromise with Umpqua Bank with respect to the State Class Action that was confirmed with Judge Coffin on June 13, In the same mediation, and at the same time as Plaintiffs and Umpqua Bank reached a compromise, Trustee reached a compromise with Umpqua Bank and Umpqua Holdings Corporation with respect to the Adversary Proceeding and the proofs of claim filed by Umpqua Bank in the Berjac Bankruptcy. Those parties are contemporaneously executing a settlement agreement (the Bankruptcy Agreement ). 2.5 Based on their investigation, lawyers representing the Plaintiffs have concluded that this Class Action Agreement, separately, and in combination with the Bankruptcy Agreement, is fundamentally fair, adequate and reasonable, and in the best interests of all members of the Settlement Class. The Class Action Agreement and the Bankruptcy Agreement each provide the Agreement will be null and void if the other Agreement becomes null and void. 2.6 Plaintiffs and Umpqua Bank now desire that this Class Action Agreement permanently resolve and settle all claims that Plaintiffs and the other members of the Settlement Class may have against Umpqua Bank with respect to the facts alleged in the State Class Action. 3. Compromise of Disputed Claims The purpose of this Class Action Agreement is to compromise disputed claims in which liability is expressly denied by Umpqua Bank. This Class Action Agreement shall not be deemed to constitute an admission of liability or of the validity of any claim or defense, or of the truth of any allegation. Class Action Settlement Agreement Page 2 of 10

3 4. Consideration and Settlement Fund 4.1 In exchange for the promises in this Class Action Agreement, Umpqua Bank shall pay, or cause to be paid, into a settlement fund (the Settlement Fund ) the amount of $6,600,000 (the Class Action Settlement Payment ), subject to the provisions of Paragraph 4.5 of this Class Action Agreement. The Class Action Settlement Payment shall be deposited into the Settlement Fund by wire transfer of immediately available funds. 4.2 The Class Action Settlement Payment shall be deposited into the Settlement Fund within 30 days after the last to occur of the following events: (i) the State Court has entered the final judgment and claims bar injunction referred to in Paragraph 5.4 of this Class Action Agreement; (ii) the rights of any person to appeal such decisions of the State Court have been fully exhausted, either through the lapse of time or through the completion of all available appellate review; (iii) the Bankruptcy Court has entered an order approving the Bankruptcy Agreement; and (iv) final judgment has been entered dismissing with prejudice the claims asserted against Umpqua Bank and Umpqua Holdings Corporation in the Adversary Proceeding. 4.3 Unless all of the events described in Paragraph 4.2(i)-(iv) of this Class Action Agreement have occurred, Umpqua Bank shall have no obligation to pay, or to cause to be paid, any amount into the Settlement Fund. 4.4 Any payment or distribution made from the Settlement Fund to a plaintiff or any other member of the Settlement Class shall reduce, on a dollar-for-dollar basis, the amount of that class member s claims against any non-party to this Class Action Agreement that arises from or relates to the Berjac Securities. 4.5 This Class Action Agreement and all of the provisions hereof, including Paragraph 4.1 hereof, are subject to the provisions of a separate agreement entered into contemporaneously herewith by and between Plaintiffs and Umpqua Bank (the contemporaneous agreement ). 5. State Settlement Class Action 5.1 Plaintiffs shall seek class certification and approval of this Class Action Agreement in the State Class Action in compliance with ORCP 32 and with other applicable law. Umpqua Bank shall not oppose Plaintiffs good faith efforts to obtain class certification and approval of this Class Action Agreement. Class Action Settlement Agreement Page 3 of 10

4 5.2 Plaintiffs lawyers shall submit for approval by the State Court a plan for the just and orderly administration of claims and distribution of proceeds from the Settlement Fund to members of the Settlement Class. The Parties shall submit to the continuing jurisdiction of the State Court or its designee as necessary to enforce this Class Action Agreement, or to enforce any order or judgment issued by the State Court. 5.3 Attorney fees to lawyers for Plaintiffs and the other members of the Settlement Class, costs incurred in the representation, and costs associated with the State Class Action shall be paid from the Settlement Fund, as approved or determined by the State Court. 5.4 The Parties shall submit to the State Court for approval a proposed final judgment and claims bar injunction that certifies the Settlement Class, approves this Class Action Agreement, and protects (to the greatest extent permitted by law) Umpqua Bank from future claims arising from or relating to the subject matter of the State Class Action and this Class Action Agreement, including claims by members of the Settlement Class, claims involving disputes between members of the Settlement Class, and claims by any persons who may hold indemnity, contribution, or similar claims. The proposed final judgment shall be a judgment of dismissal with prejudice, and without costs or fees to any party, but it shall provide the State Court with continuing jurisdiction to enforce the provisions of this Class Action Agreement, including the obligation of Umpqua Bank to pay, or cause to be paid, the Class Action Settlement Payment in accordance with Section 4 of this Class Action Agreement. The proposed final judgment shall contain provisions that will make the final judgment immediately appealable under ORS or ORS The Parties agree to negotiate additional agreements and shall seek State Court approval as necessary to promptly effectuate the terms of this Class Action Agreement, including agreements on the following aspects of the State Class Action: class definition, notice to class members or other interested parties, procedure for handling opt-outs and objections, claim administration procedures, appointment of a claims administrator, the timing and scope of the final judgment, the scope and form of a claims bar injunction, and other agreements. 5.6 Unless the Parties otherwise agree in writing, if any person raises an objection that could form a basis for an appeal of any order or judgment of the State Court certifying the Settlement Class or approving this Class Action Agreement, then the Parties agree to cooperate in good faith in an attempt either to resolve the objection or to expedite any appeal through the use of the interlocutory procedure in ORS Class Action Settlement Agreement Page 4 of 10

5 5.7 In the event the State Court does not certify the Settlement Class or does not approve this Class Action Agreement, or in the event an appellate court reverses a judgment or order of the State Court certifying the Settlement Class or approving this Class Action Agreement, the Parties agree to act in good faith to attempt to reach agreement as to whether to seek further appellate review following a reversal, to negotiate a modified version of this Class Action Agreement, or to negotiate a new settlement agreement. If the Parties do not come to an agreement within 30 days of such an event, then this Class Action Agreement will be null and void. In addition, if for any reason the Bankruptcy Agreement becomes null and void, the Class Action Agreement will be null and void. If the Class Action Agreement becomes null and void under this Section and the State Class Action proceeds forward in litigation, the Parties agree that the Class Action Plaintiffs will need to seek certification of the class with respect to the claims in dispute, and nothing herein shall waive or estop Umpqua Bank from challenging such class certification. 6. Release of Umpqua Bank and Umpqua Holdings Corporation 6.1 Upon delivery of the Class Action Settlement Payment in accordance with Section 4 of this Class Action Agreement, Plaintiffs and the other members of the Settlement Class, and each of them (including their respective representatives, attorneys, agents, assigns, heirs, or successors), release and forever discharge Umpqua Bank (for itself and as successor to Centennial Bank), Umpqua Holdings Corporation, their respective parent corporations, and their respective subsidiary corporations (including their respective current or former directors, officers, employees, representatives, attorneys, insurers, assigns, heirs, and successors) (collectively, the Umpqua Released Persons ) from any and all claims, actions, suits, demands, liens, judgments and liability whatsoever, whether known or unknown or discovered or undiscovered, arising from or relating to (i) any claim, cause of action, demand, or allegation asserted or attempted to be asserted by Plaintiffs, or any of them, in connection with the State Class Action; (ii) the Berjac of Oregon and/or Berjac of Portland banking relationships with Umpqua Released Persons; or (iii) any conduct, actions, transactions, or occurrences set forth or attempted to be set forth in any complaint filed by Plaintiffs in the State Class Action. 6.2 Upon delivery of the Class Action Settlement Payment in accordance with Section 4 of this Class Action Agreement, and to the extent permitted by law, Plaintiffs and the other members of the Settlement Class, and each of them, expressly waive, release, and forever discharge any and all defenses, rights and benefits provided under Section 1542 of the California Civil Code or under any similar, comparable or equivalent statute, law, rule or common law decision of any other jurisdiction. Section 1542 of California Civil Code provides: Class Action Settlement Agreement Page 5 of 10

6 A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor. 6.3 Notwithstanding any other provision of this Class Action Agreement, Plaintiffs and the other members of the Settlement Class do not release or discharge Holcomb Family Limited Partnership, Fred W. Holcomb, Jones & Roth, PC, Berjac of Oregon, Berjac of Portland, Wagon Wheel Properties, LLC, Michael Holcomb (including his trustee in bankruptcy), Gary Holcomb (including his trustee in bankruptcy), or Trustee, from any claims, actions, suits, demands, liens, judgments, or liability. 6.4 Following the delivery of the Class Action Settlement Payment in accordance with Section 4 of this Class Action Agreement, if (i) Plaintiffs and any person other than Umpqua Bank enter into a settlement agreement or otherwise agree to settle or resolve any claim, action, suit, demand, lien, judgment, or other liability arising from or relating to (a) any claim, cause of action, demand, or allegation asserted or attempted to be asserted by Plaintiffs, or any of them, in connection with the State Class Action; or (b) any conduct, actions, transactions, or occurrences set forth or attempted to be set forth in any complaint filed by Plaintiffs in the State Class Action, then (ii) Plaintiffs shall obtain from such person the release of any contribution, indemnity or similar claims such person may have against Umpqua Bank arising from or relating to the subject matter of the State Class Action and such settlement or other resolution, and Umpqua Bank shall contemporaneously release any contribution, indemnity or similar claims Umpqua Bank may have against such person arising from or relating to the subject matter of the State Class Action and this Class Action Settlement Agreement. 7. Post-Payment Matters 7.1 Upon delivery of the Class Action Settlement Payment in accordance with Section 4 of this Class Action Agreement, Umpqua Bank shall have no further financial responsibility to Plaintiffs, the other members of the Settlement Class, or their lawyers; provided, however, that with respect to any Plaintiff or member of the Settlement Class who is a banking customer of Umpqua Bank (any such person being referred to as a Banking Customer ), this Class Action Agreement shall have no effect upon (i) the financial responsibility that Umpqua Bank separately owes to any Banking Customer as a banking customer of Umpqua Bank, or (ii) the financial responsibility separately owed to Umpqua Bank by any Banking Customer as a banking customer of Umpqua Bank. Class Action Settlement Agreement Page 6 of 10

7 7.2 The amount of any payment, allocation, distribution, or disbursement from the Settlement Fund to members of the Settlement Class shall be determined by a Claims Administrator acting pursuant to the orders of the State Court. 8. Not used 9. Representations and Warranties Each Party makes the following representations and warranties: 9.1 This Class Action Agreement is freely, voluntarily, and validly executed and each Party has entered into the Class Action Agreement with the advice of counsel. 9.2 Each Party is relying solely upon that Party s own judgment and the judgment of that Party's lawyers in making this Class Action Agreement and has not been influenced by any representations or statements made by any other person. 9.3 Each Party has the legal capacity and authority to enter into this Class Action Agreement. 10. Nondisparagement and Confidentiality The Parties and their lawyers shall not disparage or make derogatory remarks about another Party publicly, in the news media, Internet media, social media or any communication medium likely to receive public dissemination. This provision does not prevent a Party s lawyer, as may be appropriate to obtain the court s approval of the Class Action Agreement, from describing only to the State Class Action Court and/or the Berjac Bankruptcy Court and/or the court presiding over the Jones & Roth insurance dispute the claims and the evidence supporting the claims against another Party. Except as required by the approval process set forth herein, the Parties and their lawyers shall keep the terms hereof confidential and shall not voluntarily disclose such terms. 11. Interpretation 11.1 This Class Action Agreement, together with the contemporaneous agreement, supersedes the compromise reached by the Parties following the final mediation session on May 31, 2016, and as confirmed with Judge Coffin on June 16, Class Action Settlement Agreement Page 7 of 10

8 11.2 This Class Action Agreement, together with the contemporaneous agreement, constitutes the fully integrated and complete expression of the Parties settlement agreement and supersedes all previous agreements and negotiations. However, nothing in this Paragraph 11.2 shall preclude enforcement of any agreements made by the Parties or their representatives contemporaneously with or subsequent to this Class Action Agreement, including agreements such as those contemplated in Paragraphs 5.5 and 5.7, of this Class Action Agreement This Class Action Agreement is the product of good-faith, adversarial, and arm s-length negotiations between the Parties, and enforcement shall be interpreted in a neutral manner and not more strongly for or against any Party based upon the source of draftsmanship Any form of the word include shall not be exclusive in this Class Action Agreement. Unless context requires otherwise, the word or shall not be exclusive. The word person shall include natural persons or any legal entity. 12. Enforcement and Governing Law 12.1 After this Class Action Agreement has been approved, the State Court shall have continuing jurisdiction to enforce this Class Action Agreement This Class Action Agreement shall be construed and interpreted in accordance with the laws of the state of Oregon This Class Action Agreement is effective when executed by all Parties, whether personally or by authorized representatives (the Effective Date ). 13. Counterparts This Class Action Agreement shall be fully effective if signed in one or more counterparts by a Party or by a Party s representative. A duplicated, scanned or faxed signature on the signature page below shall have the same effect as an original signature. [Signatures on the following pages.] Class Action Settlement Agreement Page 8 of 10