UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF FLORIDA RICHARD THORPE and DARREL WEISHEIT, Individually and on Behalf of All Others Similarly Situated, Plaintiffs, v. WALTER INVESTMENT MANAGEMENT CORP., MARK J. O’BRIEN, DENMAR DIXON, KEITH A. ANDERSON, BRIAN COREY, CHARLES E. CAUTHEN and C. MARC HELM, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) Case No. 1:14-cv-20880-UU STIPULATION OF SETTLEMENT This Stipulation of Settlement (together with all Exhibits thereto, the “Stipulation”), dated as of May 20, 2016, which is entered into by and among (i) the Lead Plaintiff Richard Thorpe and Named Plaintiff Darrel Weisheit (“Plaintiffs”), on behalf of themselves and on behalf of the Settlement Class (as defined herein), and (ii) the Defendants (as defined herein), by and through their undersigned attorneys, states all of the terms of the settlement and resolution of this matter by the Settling Parties (as defined herein) and is intended by the Settling Parties to fully and finally release, resolve, remise and discharge the Released Claims (as defined herein) against the Released Parties (as defined herein), subject to the approval of the United States District Court for the Southern District of Florida (the “Court”). Throughout this Stipulation, all terms used with initial capitalization, but not immediately defined, shall have the meanings ascribed to them in Section 1 below. WHEREAS: Case 1:14-cv-20880-UU Document 140 Entered on FLSD Docket 05/20/2016 Page 1 of 33
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UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF … · Unknown Claims. 1.7. “Claims Administrator” means Strategic Claims Services, which shall administer the Settlement. 1.8.
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UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
RICHARD THORPE and DARREL WEISHEIT,
Individually and on Behalf of All Others
Similarly Situated,
Plaintiffs,
v.
WALTER INVESTMENT MANAGEMENT
CORP., MARK J. O’BRIEN, DENMAR
DIXON, KEITH A. ANDERSON, BRIAN
COREY, CHARLES E. CAUTHEN and
C. MARC HELM,
Defendants.
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Case No. 1:14-cv-20880-UU
STIPULATION OF SETTLEMENT
This Stipulation of Settlement (together with all Exhibits thereto, the “Stipulation”),
dated as of May 20, 2016, which is entered into by and among (i) the Lead Plaintiff Richard
Thorpe and Named Plaintiff Darrel Weisheit (“Plaintiffs”), on behalf of themselves and on
behalf of the Settlement Class (as defined herein), and (ii) the Defendants (as defined herein), by
and through their undersigned attorneys, states all of the terms of the settlement and resolution of
this matter by the Settling Parties (as defined herein) and is intended by the Settling Parties to
fully and finally release, resolve, remise and discharge the Released Claims (as defined herein)
against the Released Parties (as defined herein), subject to the approval of the United States
District Court for the Southern District of Florida (the “Court”).
Throughout this Stipulation, all terms used with initial capitalization, but not immediately
defined, shall have the meanings ascribed to them in Section 1 below.
WHEREAS:
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A. The Action
On March 7, 2014, Steven Beck, individually and on behalf of all others similarly
situated, filed a putative class action lawsuit in the Court (the “Action”) alleging violations of the
Securities Exchange Act of 1934 as against Walter Investment Management Corp. (“Walter
Investment” or the “Company”), Mark J. O’Brien, Denmar Dixon, Robert Yeary, H. Marc Helm,
and Charles E. Cauthen.
On May 8, 2014, the Court appointed Steven Beck and Richard Thorpe as Lead Plaintiffs and
appointed Lead Plaintiffs’ chosen counsel, The Rosen Law Firm, P.A. and Pomerantz LLP as Co-
Lead Plaintiffs’ Counsel pursuant to the Private Securities Litigation Reform Act, as amended.
On July 7, 2014, Stephen Beck voluntarily dismissed his claims, and Lead Plaintiff
Richard Thorpe and Named Plaintiff Darrel Weisheit, individually and on behalf of all others
similarly situated, filed a First Amended Class Action Complaint (“FAC”) against Walter
Investment, Mark J. O’Brien, Denmar Dixon, Keith A. Anderson, Brian Corey, Charles E.
Cauthen and H. Marc Helm.
On August 11, 2014 the then-named defendants to the Action filed motions to dismiss the
FAC, which the Court granted on December 23, 2014 with leave to amend.
On January 6, 2015, Plaintiffs filed a Second Amended Class Action Complaint (“SAC”),
which the then-named defendants moved to dismiss on January 23, 2015.
On June 30, 2015, the Court granted in part and denied in part the defendants’ motions to
dismiss. Among other things, the Court dismissed defendants Mark J. O’Brien, Denmar Dixon,
Charles E. Cauthen and H. Marc Helm from the Action, and ordered Plaintiffs to file a further
amended complaint that incorporated the Court’s rulings on or before July 10, 2015.
On July 10, 2015, Plaintiffs filed a Third Amended Class Action Complaint (“TAC”).
The TAC asserts claims on behalf of a putative class of persons who acquired Walter Investment
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securities between May 9, 2012 and August 11, 2014, inclusive. The TAC alleges that Walter
Investment, Keith A. Anderson and Brian Corey violated federal securities law, specifically
Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and SEC Rule 10b-5.
On July 24, 2015, defendants Walter Investment, Keith A. Anderson and Brian Corey
filed their Answer, Defenses and Affirmative Defenses to the TAC.
On August 31, 2015, Plaintiffs filed with the Court a motion for class certification.
On October 27, 2015, the parties to the Action held a Court-mandated mediation
conference with former United States District Judge Layn Phillips serving as the mediator. A
settlement was not reached at the October 27, 2015 mediation conference. Thereafter, the parties
continued to engage in arm’s-length negotiations through the mediator in an attempt to resolve
the Action.
On March 16, 2016, the Court issued an order certifying a class consisting of all persons
or entities that purchased Walter Investment common stock during the period of May 9, 2012
through August 11, 2014, inclusive, and excluding the named defendants, the present and former
officers and directors of Walter Investment and any subsidiary thereof, members of such
excluded persons immediate families and their legal representatives, heirs, successors or assigns
and any entity in which any excluded person has or had a controlling interest. The Court also
appointed Lead Plaintiff Richard Thorpe and Named Plaintiff Darrel Weisheit as Class
Representatives and Pomerantz LLP and The Rosen Law Firm, P.A. as Co-Class Counsel.
On March 30, 2016, the named defendants filed a petition with the United States Court of
Appeals for the Eleventh Circuit for permission to appeal the Court’s March 16, 2016 order
certifying the class action.
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B. The Settlement
On April 11, 2016, the parties to the Action held an informal mediation conference with
the assistance of the mediator. During this mediation conference, Plaintiffs and Defendants
reached an agreement in principle to settle the Action.
This Stipulation memorializes the agreement between the parties to fully and finally settle
the Action and to fully release all Released Claims against the Defendants and the Released
Parties with prejudice in return for specified consideration.
C. The Defendants’ Denial Of Wrongdoing And Liability
Throughout the course of the Action, Defendants have denied and continue to deny each,
any and all allegations of wrongdoing, fault, liability or damage whatsoever asserted in the
Action, including asserted in the TAC. Defendants have also denied, inter alia, the allegations
that Plaintiffs or the Settlement Class have suffered damages or that Plaintiffs or the Settlement
Class were harmed by the conduct alleged in the Action.
Defendants enter into this Stipulation to eliminate the uncertainties, burden and expense
of further litigation. Nothing in this Stipulation shall be construed as an admission by either
Defendants or any of the Released Parties of any wrongdoing, fault, liability, or damages
whatsoever.
D. Claims of Plaintiffs And Benefits Of Settlement
Plaintiffs believe that the claims asserted in the Action have merit. Plaintiffs, however,
recognize and acknowledge the expense and length of continued proceedings necessary to
prosecute the Action against Defendants through trial and appeals. Plaintiffs have also taken into
account the uncertain outcome and the risk of any litigation. In particular, Plaintiffs have
considered the pendency of the petition to appeal the certification of the class and the inherent
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problems of proof and possible defenses to the federal securities law violations asserted in the
Action, including the defenses asserted by Defendants during the litigation, in motions on the
pleadings, settlement negotiations and mediation proceedings. Plaintiffs have therefore
determined that the Settlement set forth in this Stipulation is fair, adequate, reasonable, and in the
best interests of the Settlement Class.
NOW, THEREFORE, IT IS HEREBY STIPULATED AND AGREED, by and
among the Plaintiffs, on behalf of themselves and on behalf of the Settlement Class, and
Defendants, by and through their respective undersigned counsel that, subject to the approval of
the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, in consideration of the
benefits flowing to the Settling Parties from the Settlement set forth herein, the Action and the
Released Claims as against the Released Parties shall be finally and fully compromised, settled
and released, the Action shall be dismissed with prejudice and the Released Claims shall be
finally and fully released as against the Released Parties, upon and subject to the terms and
conditions of this Stipulation, as follows.
1. Definitions
In addition to the terms defined above, the following capitalized terms, used in this
Stipulation, shall have the meanings specified below:
1.1. “Action” means the putative class action captioned Thorpe, et al. v.
Walter Investment Management Corp., et al., Case No. 1:14-cv-20880-UU (S.D. Fla.).
1.2. “Administrative Costs” means all costs and expenses associated with
providing notice of the Settlement to the Settlement Class and otherwise administering or
carrying out the terms of the Settlement. Such costs may include, without limitation: escrow
agent costs, the costs of publishing the summary notice, the costs of printing and mailing the
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Notice and Proof of Claim, as directed by the Court, and the costs of allocating and distributing
the Net Settlement Fund to the Authorized Claimants. Such costs do not include legal fees.
1.3. “Authorized Claimant” means any Settlement Class Member who is a
Claimant and whose claim for recovery has been allowed pursuant to the terms of this
Stipulation, the exhibits hereto, and any order of the Court.
1.4. “Business Day” means any day except Saturday or Sunday or any
other day on which national banks are authorized by law or executive order to close in the State
of New York.
1.5. “Claimant” means any Settlement Class Member who files a Proof of
Claim in such form and manner, and within such time, as the Court shall prescribe.
1.6. “Claims” means any and all manner of claims, demands, rights,
causes of action and liabilities, of every nature and description whatsoever, which may be
asserted in any capacity, whether based in law or equity, arising under federal, state, local,
statutory or common law, or any other law, rule or regulation, including both known and
Unknown Claims.
1.7. “Claims Administrator” means Strategic Claims Services, which shall
administer the Settlement.
1.8. “Common Stock” means the shares of common stock of Walter
Investment.
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1.9. “Defendants” means Walter Investment Management Corp., Mark J.
O’Brien, Denmar Dixon, Keith A. Anderson, Brian Corey, Charles E. Cauthen, Robert Yeary1
and H. Marc Helm.
1.10. “Escrow Account” means an interest-bearing escrow account
established by the Escrow Co-Agents at the Huntington National Bank.The Escrow Account
shall be managed by the Escrow Co-Agents, subject to the Court’s supervisory authority, for the
benefit of Plaintiffs and the Settlement Class in accordance with the terms of the Stipulation and
any order of the Court.
1.11. The “Escrow Co-Agents” are Pomerantz LLP and The Rosen Law
Firm, P.A. The Escrow Co-Agents shall perform the duties as set forth in this Stipulation and
any order of the Court.
1.12. “Effective Date” means the first date by which all of the events and
conditions specified in ¶ 10.3 of this Stipulation have been met and have occurred.
1.13. “Final” when referring to the Final Judgment means exhaustion of all
possible appeals, meaning (i) if no appeal or request for review is filed, the day after the date of
expiration of any time for appeal or review of the Final Judgment, and (ii) if an appeal or request
for review is filed, the day after the date the appeal or request for review is dismissed, or the
Final Judgment is upheld on appeal or review in all material respects, and is not subject to further
review on appeal or by certiorari or otherwise; provided, however, that any dispute or appeal
relating solely to the amount, payment or allocation of attorneys’ fees and expenses, the Plan of
1 In light of Robert Yeary’s death during the pendency of this Action, all references to
Robert Yeary in this Stipulation shall include the Estate of Robert Yeary and his executors and
heirs.
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Allocation or the provisions of ¶ 6.2 shall have no effect on finality for purposes of determining
the date on which the Final Judgment becomes Final.
1.14. “Final Judgment” means the order and judgment to be entered by the
Court finally approving the Settlement and dismissing the Action, materially in the form attached
hereto as Exhibit B.
1.15. “Individual Defendants” means Mark J. O’Brien, Denmar Dixon,
Keith A. Anderson, Brian Corey, Charles E. Cauthen, Robert Yeary and H. Marc Helm.