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In re Yahoo! Inc. Securities Litigation

United States District Court, N.D. California, San Jose Division

May 9, 2018

IN RE YAHOO! INC. SECURITIES LITIGATION

          ORDER GRANTING MOTION FOR PRELIMINARY APPROVAL OF SETTLEMENT Re: Dkt. No. 73

          LUCY H. KOH, United States District Judge

         On March 2, 2018, Plaintiffs Sutton View Partners LP and Nafiz Talukder filed a motion for preliminary approval of class action settlement with Defendants Altaba Inc., formerly known as Yahoo! Inc.; Marissa Mayer; Ronald Bell; and Alexander Stamos. ECF No. 73. Plaintiff Ben Maher joined the motion on April 13, 2018. ECF No. 82. The Court held a Preliminary Approval Hearing on May 3, 2018. ECF No. 91. During the Preliminary Approval Hearing, the Court proposed a number of suggested changes to the parties' proposed Notice, Publication Notice, and Proof of Claim Form. ECF Nos. 74-3, 74-4, 86. The parties have submitted updated versions of the proposed Notice, Publication Notice, and Proof of Claim Form that incorporate the suggested changes. ECF Nos. 97, 98, 99.

         The Court suggests further changes to questions 18, 20, and 21 in the proposed Notice, ECF No. 97. These changes have been incorporated into an Amended Notice included as an exhibit to this Order. ECF No. 105-1 (red-lined copy of Amended Notice); ECF No. 105-2 (clean copy of Amended Notice).

         With these changes, and having reviewed the briefs and arguments of the parties, the relevant law, and the record in this case, the Court GRANTS the motion for preliminary approval.

         WHEREAS:

         (A) On April 24, 2017, the Court consolidated civil actions 5:17-CV-00373-LHK and 5:17-CV-01525-LHK under the caption In re Yahoo! Inc. Securities Litigation, Lead Case No. 17-CV-00373-LHK, appointed Ben Maher and Sutton View Partners LP as Lead Plaintiffs, and appointed Pomerantz LLP and Glancy Prongay & Murray LLP as Co-Lead Counsel (ECF No. 19);

         (B) The First Amended Complaint for Violations of the Federal Securities Laws (ECF No. 28) was filed on June 7, 2017, asserting claims against Yahoo! Inc. (“Yahoo”); Marissa Mayer, Ronald Bell, and Alexander Stamos (the “Individual Defendants, ”);

         (C) On November 22, 2017, the Court entered the Order Denying Defendants' Motion to Dismiss and Motion For Joinder as Moot and granted Plaintiffs leave to file a second amended class action complaint by February 2, 2018 (ECF No. 65);

         (D) On February 2, 2018, Plaintiffs filed the operative Second Amended Class Action Complaint for Violations of the Federal Securities Laws (ECF No. 70), asserting claims against Defendants Yahoo! Inc. (“Yahoo” or the “Company”) and the Individual Defendants (together with Yahoo, the “Defendants”);

         (E) Plaintiffs, on behalf of themselves and the Settlement Class, and Defendants (together, the “Parties”) have agreed to a settlement of all claims asserted in the Action against all Defendants and have entered into a Stipulation and Agreement of Settlement dated March 2, 2018 (the “Stipulation”) setting forth the terms and conditions for the proposed Settlement;

         (F) Plaintiffs have applied to the Court under Fed.R.Civ.P. 23(e) for an order approving the Settlement in accordance with the terms of the Stipulation and for complete dismissal of this Action as to the Defendants;

         (G) The Court having reviewed and considered Plaintiffs' Motion for Preliminary Approval of Settlement and all papers submitted in support thereof, the Stipulation and the attached exhibits, and finding that substantial and sufficient grounds exist for entering this Preliminary Approval Order:

         NOW, THEREFORE, IT IS HEREBY ORDERED:

         1. All capitalized terms used herein shall have the same meaning as in the Stipulation.

         2. This Court has jurisdiction over the subject matter of this Action and over all parties to this Action, including Settlement Class Members.

         3. The Court preliminarily approves the Settlement and the proposed Plan of Allocation described in the Amended Notice as fair, reasonable and adequate, pending a final settlement and fairness hearing, as described below. The Court preliminarily finds that the proposed Settlement should be approved as: (i) the result of serious, extensive arm's-length and non-collusive negotiations conducted with the assistance of former California Superior Court Judge Daniel Weinstein; (ii) falling within a range of reasonableness warranting final approval; (iii) having no obvious deficiencies; (iv) not improperly granting preferential treatment to the Plaintiffs or segments of the Settlement Class; and (v) warranting notice of the proposed Settlement at the Settlement Hearing described below.

         I. CLASS CERTIFICATION

         4. Pursuant to Fed.R.Civ.P. 23(a) and (b)(3) and for the purposes of the Settlement only, the Court hereby preliminarily certifies the following class (the “Settlement Class”):

All persons who purchased or otherwise acquired Yahoo securities on the open market between April 30, 2013, and December 14, 2016, both dates inclusive (the “Settlement Class Period”). Excluded from the Settlement Class are (i) Defendants and the Individual Defendants' family members, heirs, successors, or assigns; (ii) directors and officers of Altaba, Inc. (“Altaba”) and their families; (iii) any entity in which Defendants have a controlling interest; and (iv) any Person who submits a request for exclusion from the Settlement Class that is accepted by the Court.

         5. Pursuant to Fed.R.Civ.P. 23(a) and (b)(3) and for the purposes of the Settlement only, the Court appoints Plaintiffs Ben Maher, Sutton View Partners LP and Nafiz Talukder as class representatives for the Settlement Class, and Lead Counsel Glancy Prongay & Murray LLP and Pomerantz LLP as class counsel for the Settlement Class.

         6. For the purposes of the Settlement only, the Court finds that the prerequisites for a class action under Fed.R.Civ.P. 23(a) and (b)(3) have been satisfied in that: (a) the number of Settlement Class Members is so numerous that joinder of all members thereof is impracticable; (b) there are questions of law and fact common to the Settlement Class; (c) the claims of the Plaintiffs are typical of the claims of the Settlement Class they seek to represent; (d) Plaintiffs fairly and adequately represent the interests of the Settlement Class; (e) questions of law and fact common to the members of the Settlement Class predominate over any questions affecting only individual members of the Settlement Class; and (f) a class action is superior to other available methods for the fair and efficient adjudication of this action.

         7. If the Stipulation is terminated or is not consummated for any reason, the foregoing certification of the Settlement Class shall be void and of no further effect, and the parties to the Stipulation shall be returned to the status each occupied before entry of this Order and before execution of the MOU and the Stipulation without prejudice to any legal argument that any of the parties to the Stipulation might have asserted in the Action.

         8. The Court approves the appointment of Huntington National Bank as the Escrow Agent to manage the Settlement Fund for the benefit of the Settlement Class.

         9. The Court approves the appointment of JND Legal Administration as the Settlement Administrator to supervise and administer the notice procedure and the processing of claims, and approves the payment of reasonable administration costs to the Settlement Administrator from ...


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