By: WISCONSIN LAW JOURNAL STAFF//December 16, 2014//
U.S. Court of Appeals For the Seventh Circuit
Civil
Civil Procedure – Class actions; securities
Where only shareholders who could show loss causation received proceeds in a class action settlement, it was not an abuse of discretion for the district court to approve the settlement.
“Hayes’s position is that the district court abused its discretion by approving a plan of distribution that provides for those who cannot show damages, i.e., loss causation, even
though it defined the class for purposes of settlement as those individuals who purchased Accretive common stock during the class period “and who were damaged by Defendants’ alleged violations.” (Emphasis added.) Yet, he is mistaken. The plan of distribution, in fact, does not provide for those who cannot show loss causation. An examination of the formula used to calculate settlement distributions reveals that only those who can show loss causation, i.e., those that held their stock until March 29, 2012, will receive a distribution. The
claim per share for those who sold before March 29, 2012 will always be zero. Thus, the district court did not abuse its discretion by approving the plan of distribution.”
Affirmed.
14-2191 Wong v. Accretive Health, Inc.