Tharaldson Motels, Inc. ERISA Litigation
This website advises you of a proposed settlement (the “Settlement”) of a lawsuit (referred to herein as the “Action”) brought by Plaintiffs Carlos Gonzales, Jolene Matheson-Godshalk, and Sidney Lien on behalf of themselves individually and on behalf of all others similarly situated in the Current Employee Class, and Raymond Hans, Gayle Herbert, Larry Richman, Donna Walker, Michael Webster, Bernard McKay and Tammy Blake on behalf of themselves, individually and on behalf of all others similarly situated in the Former Employee Class (collectively “Plaintiffs”). In this Action, Plaintiffs seek to recover losses which they allege were suffered by the Tharaldson Motels, Inc. Employee Stock Ownership Plan (the “ESOP”) as a result of breaches of fiduciary duty under the Employee Retirement Income Security Act of 1974 (“ERISA”) by Defendants. The parties reached a proposed settlement to resolve this Action on or around October 10, 2012.
The United States District Court for the District of North Dakota (the “Court”) preliminary approved the Settlement on October 23, 2012. The Court has scheduled a hearing (the “Fairness Hearing”) to evaluate the fairness and adequacy of the Settlement. At the Fairness Hearing, the Court will consider, among other things, (i) whether to approve the Settlement as fair, reasonable and adequate; (ii) whether to approve the Plan of Allocation to the participants and beneficiaries of the ESOP; and (iii) whether to award attorneys’ fees and reimbursement of out-of-pocket expenses to Plaintiffs’ Counsel. The Fairness Hearing, before the Honorable Ralph R. Erickson, Chief District Judge, has been scheduled for Monday, February 25, 2013, at 9:00 am at the United States District Court for the District of North Dakota, 655 First Avenue North, Fargo, ND 58102.
The terms of the Settlement are contained in a Settlement Agreement (the “Settlement Agreement”), a copy of which is available on this website. Capitalized and italicized terms used in this Notice and not defined herein have the meanings assigned to them in the Settlement Agreement.
If you are a member of the Current Employee Class (i.e. you are currently employed by TMI), and you have any questions regarding the Settlement, please direct all inquiries to: Gary Greenwald or Gary Gotto, Keller Rohrback P.L.C., 3101 N. Central Avenue, Suite 1400, Phoenix, Arizona 85012, tel: 602-248-0088; and David Ko, Keller Rohrback L.L.P., 1201 Third Avenue, Suite 3200, Seattle, WA 98109, tel: 206-623-1900, or toll-free at 1-800-776-6044. Plaintiffs’ Counsel for the Current Employee Class may also be contacted via email at.
If you area a member of the Former Employee Class (i.e. you are no longer employed by TMI), and you have any questions regarding the Settlement, please direct all inquiries to: R. Joseph Barton or Bruce F. Rinaldi, Cohen Milstein Sellers & Toll P.L.L.C., 1100 New York Avenue, N.W. West Tower, Suite 500, Washington, D.C. 2005-3934, tel: (202) 408-4600 or toll free: 1-888-240-0775. Plaintiffs’ Counsel for the Former Employee Class may also be contacted via email at .
Please do not contact the Court, as Court personnel will not be able to answer your questions.
Summary of Settlement
The Hans Settlement provides a $4 million cash payment by Tharaldson Motels, Inc. (“TMI”) (the “Settlement Fund Cash Component”), and $11 million which shall be credited against principal owing under the ESOP Notes (the “Settlement Fund Principal Reduction”). Collectively, the Settlement Fund Cash Component and the Settlement Fund Principal Reduction comprise the entire “Hans Settlement Fund.”
Disbursements or allocations will be made as promptly as practicable after the Court’s approval of the Settlement becomes final and after the Settlement Fund Cash Component and each Settlement Fund Principal Reduction installment is disbursed to the ESOP.
Under the terms of Settlement, Plaintiffs’ Counsel’s application for attorneys’ fees and expenses to the Court will not exceed one-third (1/3) of the Hans Settlement Fund. A copy of the application when filed will be available on this site or by a requesting a copy from Plaintiffs’ Counsel. To date, Plaintiffs’ Counsel have received no payment for their services in prosecuting the Action, nor have Plaintiffs’ Counsel been reimbursed for any out-of-pocket expenses.
The Plan of Allocation
As set forth in the Settlement Agreement, any sums approved by the Court for attorneys’ fees (the “Fee Award”), incentive awards for Class Representatives (“Incentive Awards”) and reimbursement of litigation and settlement administration costs and expenses (the “Expense Award”) shall be paid first out of the Settlement Fund Cash Component and any balance remaining thereafter, if any, shall be paid to the TMI ESOP for distribution in accordance with the Plan of Allocation. Pursuant to the Plan of Allocation, any balance remaining, if any, shall be allocated to each Settlement Participants Other Investment Account in an amount equal to the product of (i) the total amount of cash to be allocated on the Allocation Date, and (ii) the Settlement Participant’s Settlement Multiplier.
The $11 million in principal payments that will be credited against principal owing under the ESOP Notes under the Settlement Fund Principal Reduction portion of the Hans Settlement will occur in four annual installments. Each year as the principal on the ESOP Notes is reduced as provided in the Settlement Agreement additional shares of TMI stock will be released from the ESOP’s unallocated share account. A portion of these released shares will be converted to cash to pay a portion of any Deferred Fee Award, as described in Section V.6-7 of the Settlement Agreement. After payment of any Deferred Fee Award, the balance of the shares released as a result of each annual installment of the Settlement Fund Principal Reduction shall be allocated to each Settlement Participant’s Company Stock Account pursuant to the Plan of Allocation in an amount equal to the product of (i) the total number of shares to be allocated on the Allocation Date resulting from the Settlement Fund Principal Reduction and (ii) the Settlement Participant’s Settlement Multiplier.
The Settlement Multiplier represents a Settlement Participant’s current or former balance in his or her TMI ESOP account divided by the sum of all outstanding current and former balances of TMI company stock.
A detailed Plan of Allocation has been filed and approved by the Court, and is posted on this website.
For additional information about the proposed settlement, your legal rights, and all the deadlines concerning it, please review the documents available under the “Document Links” section of this website.