Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 1 of 5 UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT : : : : : : : : : :
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1 Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 1 of 5 UNITED STATES DISTRICT COURT DISTRICT OF CONNECTICUT JEFFREY OFFUTT, AS A TRUSTEE OF THE SUBWAY FRANCHISEE ADVERTISING FUND TRUST, v. Plaintiff, DOCTOR S ASSOCIATES, INC., v. Defendant. DOCTOR S ASSOCIATES, INC., Counterclaim Plaintiff, JEFFREY OFFUTT, RAY BURROWS, MIKE ZWALLY, GARY DAVIS, GEORGE ESTEP, PATTI SWIERBUT, SCOTT SIIMPSON, MIKE MCCOY, DEBRA ODOM, KAREN MILLER, RICK ORWICK, CHUCK ROY, ANDREW JOHNSTON, and BEN OLD, Counterclaim Defendants. : : : : : Case No.: 3:07-CV (AWT) : : : : : : : : : : : : : : : : : : : : : May 3, 2010 JOINT MOTION FOR APPROVAL OF SETTLEMENT AGREEMENT AND TO DISMISS ALL CLAIMS All parties to this action, through their respective counsel, hereby respectfully move this Court to approve a settlement agreement reached between the parties and to dismiss the claims of Plaintiff Offutt in total and with prejudice as well as the counterclaims of Counterclaim Plaintiff Doctor s Associates, Inc. in total and with prejudice. In support of this motion, the Parties state as follows: 1. Following a five-day bench trial during the week of November 16, 2009 and closing arguments on December 8, 2009, on December 21, 2009, this Court issued an oral ruling
2 Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 2 of 5 to the parties in which the Court found that the SFAFT Trust Agreement at issue in this case did not prohibit DAI from changing its franchise agreements in a manner that enables DAI to divert funds from the Trust. 2. Following this Court s December 21, 2009 oral ruling, DAI informed the SFAFT Trustees that, after the Court issues its written opinion and enters judgment, advertising contributions from Subway franchisees in the United States, Australia and Canada would be directed to a new advertising fund, pursuant to the provisions of the franchise agreements that the Court has now declined to enjoin from enforcement. 3. In light of the Court s December 21, 2009 oral ruling, and DAI s expressed intention to divert advertising contributions from Subway franchisees in the United States, Australia and Canada to a new advertising fund after this Court issues its written opinion ( a step that DAI no longer has any present intention to take, if the proposed settlement takes effect), the SFAFT Trustees, after consultation with counsel and careful consideration, in an exercise of their business judgment and the responsibility expressly vested in them by Section 9 of the SFAFT Trust Agreement, have determined that it would not be in the best interests of the Subway franchisees who are the Trust s beneficiaries to appeal the Court s judgment in the action brought by Plaintiff Offutt. Among other reasons, the SFAFT Trustees determined that an appeal of this Court s ruling may create a substantial risk of an extended period of confusion, chaos and turmoil in the Subway franchise system, with franchisee advertising contributions being divided between multiple funds, trusts or entities that may spend those contributions in inefficient and perhaps conflicting ways, which would likely cause a decrease in the revenues and profits of the Subway stores operated by the Subway franchisees who are the Trust s beneficiaries. 2
3 Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 3 of 5 4. In light of the foregoing considerations, the Parties have been engaged in extensive discussions, with the assistance of counsel, which have culminated in a Settlement Agreement, a copy of which is attached hereto as Exhibit 1. The settlement calls for, among other provisions, resolution of all disputes between and among the Parties and a transition of the operation, management and administration of SFAFT and its affiliated entities to new trustees and directors who will be appointed by DAI. The Settlement Agreement also provides that the Parties will jointly move this Court to dismiss with prejudice each of Plaintiff s claims and each of DAI s counterclaims in total and with prejudice. The Parties also respectfully seek this Court s determination upon review of the Settlement Agreement and related documents and hearing from the Parties, that the resolution reached among the Parties is fair, just and reasonable under the facts, relevant law and other circumstances of the case. 5. To facilitate the dismissal with prejudice, and to reflect any approval by this Court of the Settlement Agreement and related documents, the Parties hereby respectfully tender for this Court s consideration the proposed dismissal order, attached hereto as Exhibit DAI, through its counsel, has been consulted about this motion and draft order, agrees to the content of both the motion and order as well as the submittal of both to this Court for the dismissal of all claims with prejudice as described herein. WHEREFORE, the parties hereby respectfully request that this Court enter an order approving the proposed settlement and dismissing with prejudice all of the claims brought by Plaintiff Offutt against all defendants and similarly dismiss with prejudice all of the claims brought by Counterclaim Plaintiff Doctor s Associates, Inc. against all Counterclaim Defendants. Date: May 3,
4 Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 4 of 5 Respectfully Submitted, THE SUBWAY FRANCHISEE ADVERTISING TRUST By:_/s/ Lee Abrams Jonathan Orleans Pullman & Comley, LLC 850 Main Street P.O. Box 7006 Bridgeport, CT P: (203) F: (203) E: jborleans@pullcom.com Lee N. Abrams (pro hac vice) Lori E. Lightfoot Mayer Brown LLP 71 South Wacker Drive Chicago, IL P: (312) F: (312) E: labrams@mayerbrown.com llightfoot@mayerbrown.com DOCTOR S ASSOCIATES INC., By: /s/edward Wood Dunham Edward Wood Dunham (ct05429) Erika L. Amarante (ct22393) WIGGIN AND DANA LLP One Century Tower P.O. Box 1832 New Haven, CT (203) (203) fax edunham@wiggin.com eamarante@wiggin.com 4
5 Case 3:07-cv AWT Document 208 Filed 05/03/10 Page 5 of 5 CERTIFICATE OF SERVICE I hereby certify that on May 3, 2010, a copy of the foregoing was filed electronically. Notice of this filing will be sent by to all parties by operation of the Court s electronic filing system. Parties may access this filing through the Court s CM/ECF system. /s/ Edward Wood Dunham Edward Wood Dunham 5
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