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J.N. Feuer, Derivatively On Behalf of Wells Fargo & Company and Its Shareholders and "Double Derivatively" On v. G. Kennedy Thompson

UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF CALIFORNIA OAKLAND DIVISION


March 29, 2013

J.N. FEUER, DERIVATIVELY ON BEHALF OF WELLS FARGO & COMPANY AND ITS SHAREHOLDERS AND "DOUBLE DERIVATIVELY" ON
BEHALF OF WACHOVIA CORPORATION,
PLAINTIFF,
v.
G. KENNEDY THOMPSON;
THOMAS J. WURTZ; HERBERT SANDLER; MARION SANDLER; JOHN T. CASTEEN, III; JOSEPH NEUBAUER; MARYELLEN C. HERRINGER; TIMOTHY D. PROCTOR; VAN L. RICHEY; DONA DAVIS YOUNG; ERNEST S. RADY; JERRY GITT; JOHN D. BAKER, II; PETER C. BROWNING; DONALD M. JAMES; JOHN C. WHITTAKER, JR.; WILLIAM H. GOODWIN, JR.; ROBERT A. INGRAM; MACKEY J. MCDONALD; RUTH G. SHAW; LANTY L. SMITH; JOHN S. CHEN; LLOYD H. DEAN; SUSAN E. ENGEL; ENRIQUE HERNANDEZ, JR.; RICHARD D. MCCORMICK; CYNTHIA H.
MULLIGAN; NICHOLAS G. MOORE; PHILIP J. QUIGLEY; DONALD B. RICE; JUDITH M. RUNSTAD; STEPHEN W. SANGER; ROBERT K. STEEL; JOHN G. STUMPF; AND SUSAN G. SWENSEN,
DEFENDANTS, AND WELLS FARGO & COMPANY, NOMINAL DEFENDANT.
W. M. ROGERS, DERIVATIVELY ON BEHALF OF WELLS FARGO & COMPANY AND ITS SHAREHOLDERS, PLAINTIFF,
v.
G. KENNEDY THOMPSON; THOMAS J. WURTZ; JOHN T. CASTEEN, III; JOSEPH NEUBAUER; MARYELLEN C. HERRINGER; TIMOTHY D. PROCTOR; VAN L. RICHEY; DONA DAVIS YOUNG; ERNEST S. RADY; JERRY GITT; JOHN D. BAKER II; PETER C. BROWNING; DONALD M. JAMES; JOHN C. WHITTAKER, JR.; WILLIAM H. GOODWIN, JR.; ROBERT A. INGRAM; MACKEY J. MCDONALD; RUTH G. SHAW; LANTY L. SMITH; JOHN S. CHEN; LLOYD H. DEAN; SUSAN E. ENGEL; ENRIQUE HERNANDEZ, JR.; RICHARD D. MCCORMICK; CYNTHIA H. MILLIGAN; NICHOLAS G. MOORE; PHILIP J. QUIGLEY; DONALD B. RICE; JUDITH M. RUNSTAD; STEPHEN W. SANGER, ROBERT K. STEEL; JOHN G. STUMPF; SUSAN G. SWENSON; ROBERT L. JOSS; RICHARD M. KOVACEVICH; MICHAEL W. WRIGHT; ELAINE L. CHAO, FREDERICO F. PENA, DEFENDANTS.
AND WELLS FARGO & COMPANY,

The opinion of the court was delivered by: Judge: Hon. Yvonne Gonzalez Rogers

(PROPOSED) ORDER AND FINAL JUDGMENT

Action Filed: January 20, 2010 (PROPOSED) ORDER AND FINAL JUDGMENT NO. 10-CV-00279 YGR NO. 12-CV-00203 YGR

Nominal Defendant. 3 4 5 6 The motion to approve the proposed settlement of the above-captioned Derivative 7 Actions (the "Settlement"), came before this Court for hearing, as noticed, on March 5, 8 2013, pursuant to this Court's Preliminary Approval Order, dated December 13, 2012 (Dkt. 9 No. 129 in Case No.: 10-CV-279; Dkt. No. 27 in Case No.: 12-CV-203) (the "Preliminary 10 Approval Order"); 11 The Court having heard and considered the matter, including all papers filed in 12 connection therewith, and the attorneys for the Parties having been heard in support of the 13 Settlement, and an opportunity to be heard having been given to all other persons desiring to 14 be heard, as provided in the Notice to Shareholders, and good cause appearing therefor; 15 THE COURT HEREBY FINDS, DETERMINES AND ORDERS AS FOLLOWS: 16 Approval of the Stipulation of Settlement 17 1. This Order and Final Judgment incorporates by reference the definitions in the 18 Stipulation of Settlement (Dkt No. 128-2 in Case No.: 10-CV-279; Dkt. No. 16-2 in Case 19 No.: 12-CV-203), and all terms used herein shall have the same meanings as set forth in the 20 Stipulation, unless otherwise set forth herein. 21 2. This Court has jurisdiction over the subject matter of the Derivative Actions and 22 over all Parties to the Stipulation for the purpose of approving the Settlement of the 23 Derivative Actions. 24 3. Based on evidence submitted, the Court finds that notice was published and 25 disseminated in accordance with this Court's Preliminary Approval Order. This Court 26 further finds that the forms and contents of the Notice to Shareholders, as previously 27 preliminary approved by the Court, complied with the requirements of Federal Rule of Civil 28 Procedure 23.1, satisfied the requirements of due process of the United States Constitution, and constituted due and sufficient notice of the matters set forth therein. 2 4. A full and fair opportunity has been offered to Current Wells Fargo Shareholders 3 to object to the Settlement and to participate in the hearing thereon, and, as such, all Current 4 Wells Fargo Shareholders are bound by this Order and Final Judgment. 5 5. The Settlement is found to be fair, reasonable and adequate. 6 6. The Court finds, for settlement purposes, that the Derivative Actions were 7 properly brought as derivative actions pursuant to Federal Rule of Civil Procedure 23.1. 8 7. The Motions for Final Approval of Proposed Settlement (Dkt. No. 129 in Case 9 No.: 10-CV-279; Dkt. No. 27 in Case No.: 12-CV-203) are GRANTED. The Stipulation of 10 the Settlement and the terms set forth therein, including the Releases of Released Claims, 11 are, in all respects, hereby finally APPROVED. The parties to the Stipulation are directed to 12 consummate the Settlement in accordance with the terms and provisions of the Stipulation, 13 including the payment of attorney's fees and expenses to Plaintiff's Counsel in the 14 Derivative Actions in the amount to be determined by separate Order on Plaintiffs' Motion 15 for Award of Fees and Expenses. 16 Dismissal With Prejudice and Release of Claims 17 8. Definitions. As used below, the following definitions apply: 18 a. "Released Claims" means any and all claims, demands, rights, remedies, 19 causes of action or liabilities, whether based on federal, state, local, statutory, 20 common or foreign law or any other law, rule, regulation, or principle of equity, 21 including all Settled Claims, whether known or unknown, including without 22 limitation Unknown Claims (defined in ¶ 1.25 of the Stipulation), whether 23 suspected or unsuspected, whether contingent or non-contingent, whether accrued 24 or unaccrued, whether concealed or hidden, whether factual or legal, and for any 25 remedy whether at equity or law, that were or that could have been asserted 26 against the Settling Defendants or the Released Parties in any of the Settled 27 Claims, or by any Wells Fargo and/or Wachovia Shareholder claiming in the right of, or on behalf of Wells Fargo and/or Wachovia, arising out of, relating to 2 or based upon, directly or indirectly, in any way, any of the facts, allegations, 3 transactions, events, occurrences, acts, disclosures, statements, omissions, failures 4 to act, or matters set forth, referred to, or alleged in any of the Settled Claims; 5 specifically including, but not limited to, all claims for the benefit of Wells Fargo 6 that arise out of the merger of Wells Fargo and Wachovia, Wachovia's 7 acquisition and operation of Golden West, risk management by Wachovia's 8 officers and directors, telemarketing practices at Wachovia, alleged municipal 9 bid-rigging, money laundering, mutual fund disclosures, issuance of auction rates 10 securities, and settlement of the Arace Action. By operation of the Judgment, the 11 Releasing Parties shall have waived any and all provisions, rights, and benefits 12 conferred by California Civil Code § 1542 and by any law of any state or territory 13 of the United States, or principle of common law, which is similar, comparable, 14 or equivalent to California Civil Code § 1542 (see ¶ 1.25 of the Stipulation). 15 b. "Released Parties" means all Settling Defendants, all other current or 16 former directors and officers of Wells Fargo and Wachovia, and each and all 17 members of their families, parent entities, affiliates, or subsidiaries, and each and 18 all of their respective past, present, or future officers, directors, employees, 19 attorneys, accountants, insurers, auditors, heirs, executors, personal 20 representatives, estates, administrators, predecessors, successors, custodians, 21 agents, representatives, trusts, trustees, trust beneficiaries, heirs and assigns. 22 c. "Settling Defendants" means, collectively, the Individual Defendants and 23 Nominal Defendant Wells Fargo. 24 9. The Derivative Actions and all claims contained therein are hereby dismissed 25 with prejudice in their entirety, on the merits. Each party shall bear its own fees and costs, 26 except as set forth in the Court's Order as to the Motion for Award of Fees and Expenses. 27 10. Upon the date of this Order and Final Judgment, Plaintiffs, Wells Fargo, and all 28 Current Wells Fargo Shareholders, derivatively and on behalf of themselves, and their 2 respective current, future and former heirs, executors, administrators, personal 3 representatives, attorneys, agents, partners, successors and assigns, and any other person or 4 entity claiming (now or in the future) to have acted through or on behalf of them, shall 5 hereby be deemed to have, and by operation of this Order and Final Judgment shall: (i) have 6 fully, finally, and forever released, relinquished, settled and discharged each of the Settling 7 Defendants and the Released Parties from all the Settled Claims and Released Claims; and 8 (ii) be forever barred and enjoined from commencing, instituting, prosecuting, continuing, or 9 in any way participating in the commencement or prosecution of any action asserting any of 10 the Settled Claims and Released Claims against any of the Settled Defendants or Released 11 Parties. 12 11. Except as set forth in paragraph 12 below, upon the Effective Date of the 13 Stipulation (as defined therein), each of the Settling Defendants, on behalf of himself, 14 herself, and/or itself and each and all members of his, her and/or its families, parent entities, 15 affiliates, or subsidiaries, and each and all of his, her and/or its respective past, present, or 16 future officers, directors, employees, attorneys, accountants, insurers, auditors, heirs, 17 executors, personal representatives, estates, administrators, predecessors, successors, 18 custodians, agents, representatives, trusts, trustees, trust beneficiaries and assigns shall be 19 deemed to have, and by operation of the Judgment shall have, fully, finally, and forever 20 released, relinquished, and discharged the Releasing Parties and Plaintiffs' Counsel from all 21 claims or demands relating to, arising out of, or connected with the institution, prosecution, 22 assertion, settlement, or resolution of the Settled Claims or the Released Claims. 23 12. Nothing contained herein is intended to or shall be construed to limit, restrict or 24 otherwise affect any obligation of Wells Fargo or any of its insurers to defend and indemnify 25 former officers and directors of Wachovia, or impair any rights of any of the former 26 directors and officers of Wachovia under any contract of insurance, under the terms of the 27 merger agreement between Wells Fargo and Wachovia, or under any articles of incorporation or bylaws of Wells Fargo or Wachovia. 2 13. Without in any way affecting the finality of this Order and Final Judgment, this 3 Court shall retain jurisdiction over Plaintiffs, the Settling Defendants, and Wells Fargo with 4 respect to all matters related to the Derivative Actions and over all proceedings related to the 5 implementation and enforcement of the terms of the Stipulation, and to rule on Plaintiffs' 6 Motion for Award of Fees and Expenses. 7 14. Neither the Settlement, nor this Order and Final Judgment, nor the Stipulation, 8 nor its exhibits, nor any other papers relating to the Settlement, nor any negotiations, 9 discussions or proceedings in connection therewith shall be: 10 a. offered or received against any of the Settling Defendants or the Released 11 Parties as evidence of, or construed as, or deemed to be, evidence of any 12 presumption, concession, or admission by any of the Settling Defendants or 13 Released Parties of the truth of any fact alleged by Plaintiffs or the validity of any 14 claim that has been or could have been asserted in the Derivative Actions or in 15 any other proceeding, or the deficiency of any defense that could have been 16 asserted in the Derivative Actions or in any other proceeding, or of any alleged 17 liability, negligence, fault, or wrongdoing any of the Settling Defendants or the 18 Released Parties; 19 b. in any way be construed as, offered as, received as, used as or deemed to be 20 evidence of any kind in the Derivative Actions, any other action, or any judicial, 21 administrative, regulatory or other proceeding, except a proceeding to enforce the 22 Stipulation, and except that the Settling Defendants or any of the Released Parties 23 may file the Stipulation and/or this Order and Final Judgment in any action that 24 may be brought against any of them in order to support a defense or counterclaim 25 based on principles of res judicata, collateral estoppel, release, good faith 26 settlement, judgment bar or reduction or any other theory of claim preclusion or 27 issue preclusion or similar defense or counterclaim;

c. construed against any of the Settling Defendants, the Released Parties or 2 Plaintiffs as an admission or concession that the consideration to be given 3 hereunder represents the amount which could be or would have been recovered 4 after trial; or 5 d. construed as or received in evidence as an admission, concession or 6 presumption against Plaintiffs or their counsel or any of them that any of the 7 claims asserted in the Derivative Actions are without merit or that any infirmity 8 exists as to those claims. 9 e. Nothing herein shall be construed to limit the parties from referring to 10 and/or relying upon the Stipulation, its exhibits, any documents filed with the 11 Court relating to the Settlement, or this Order and Final Judgment in connection 12 with any appeal of any Order of this Court in the Derivative Actions and/or 13 before this Court or before the Court of Appeals in connection with Plaintiffs' 14 Motion for Award of Fees and Expenses. 15 15. The Settlement shall be a final and complete resolution of all disputes among the 16 Parties. 17 16. Entry of the Order and Final Judgment fully and finally settles and disposes of 18 and discharges all of the Released Claims. If for any reason the Settlement does not become 19 effective in accordance with the terms of the Stipulation, this Order and Final Judgment, and 20 any related orders, shall be rendered null and void, of no further force or effect, and shall be 21 vacated nunc pro tunc. The parties shall then each be deemed to have reverted to their 22 respective status in the Derivative Actions as of the date of the Stipulation, and they shall 23 proceed in all respects as if the Stipulation had not been executed and this Order and Final 24 Judgment, and any related orders, had not been entered, preserving in that event all of the 25 parties' claims and defenses in the Derivative Actions. 26 17. Without further order of the Court, the Parties to the Stipulation may agree to 27 reasonable extensions of time to carry out any of the provisions of the Stipulation.

18. The provisions of this Order and Final Judgment constitute a full and complete 2 adjudication of the matters considered and adjudged herein, and the Court determines that 3 there is no just reason for delay in the entry of judgment pursuant to Rule 54(b) of the 4 Federal Rules of Civil Procedure. The Clerk is hereby directed to enter judgment in 5 accordance with this Order and Final Judgment as a final judgment with respect to all 6 matters ordered, judged and decreed. 7 This Order Terminates Dkt. No. 129 in Case No.: 10-CV-279 and Dkt. No. 27 in Case 8 No.: 12-CV-203.

IT IS SO ORDERED

YVONNE GONZALEZ ROGERS UNITED STATES DISTRICT COURT JUDGE

20130329

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