United States District Court, N.D. California
IN RE LEAPFROG ENTERPRISE, INC. SECURITIES LITIGATION This Document Relates to: All Actions.
ORDER RE SUPPLEMENTAL BRIEFING AND/OR EVIDENCE DOCKET
M. CHEN, UNITED STATES DISTRICT JUDGE
Court has reviewed Lead Plaintiff's motion for
preliminary approval and accompanying submissions. Having
done so, the Court hereby orders the parties to file
supplemental briefing and/or evidence as follows. (A joint
filing is preferred. This does not preclude the parties from
providing their separate positions within the joint filing.)
The parties' filing shall be made within one week
of the date of this order.
Maximum Value of the Case
Plaintiff states that its expert “estimates that the
maximum recoverable damages under the alleged Class Period of
May 5, 2014, through June 11, 2015, are $89 million.”
Mot. at 10 n.4. Lead Plaintiff shall explain whether this
estimate includes all of the claims it has ever
asserted in this case or just the two accounting claims
(i.e., the goodwill and long-lived asset claims).
See, e.g., Docket No. 88 (order) (dismissing claims
based on allegedly false and misleading statements about
LeapFrog's inventory, the rollout of LeapTV, and
LeapFrog's financial guidance).
Risks of Litigation
motion, Lead Plaintiff states that one risk of litigation
with respect to the long-lived asset claim is the difficulty
in proving that Lead Plaintiff or other putative class
members' losses were due to the disclosure about the
long-lived asset impairment as opposed to some other reason.
See Mot. at 11 (“[B]ecause LeapFrog's
stock price declined in the wake of the Company's
announcement of its disappointing fiscal year 2015 financial
results, an announcement that also contained substantial
commentary on issues not directly related to taking a charge
for LeapFrog's long-lived asset impairment, Defendants
would have argued that facts other than the announcement of
the impairment were the proximate cause of Lead Plaintiffs
losses.”). The parties shall address what possible
“other” reasons for the losses there could have
Net Settlement Fund
the Settlement Agreement, “Net Settlement Fund”
is defined as “the Settlement Fund less: (i)
Court-awarded attorneys' fees and expenses; (ii) Notice
and Administration Expenses; (iii) Taxes; and (iv) any other
fees or expenses approved by the Court.” Sett. Agmt.
§ III, ¶ 1.18. How much in taxes do the parties
anticipate will be deducted from the gross settlement fund?
Plaintiff indicates that the average recovery per share is
estimated to be $0.125 before deduction of attorney's
fees and expenses and $0.083 after such deduction. What is
the average recovery when not only attorney's fees and
expenses are deducted but also claim administration fees and
expenses (the full $350, 000 contemplated by the Settlement
Agreement) and taxes?
Attorney's Fees and Expenses
the Court is not requiring Lead Plaintiff, at this time, to
file a motion for attorney's fees and expenses, more
information about the fees and expenses is needed than that
contained within the pending motion. For example:
• What is the asserted lodestar? (An estimate is
• What is the range of hourly rates?
• What is the number of hours on which the lodestar is
• What were the major litigation tasks and how much time
was spent on each? (Estimates are acceptable.)
• What and how much were the major expenses?