NEW YORK, May 11, 2016 /PRNewswire/ -- The purpose of this notice is to inform you about developments with respect to the litigation in the Court of Chancery of the State of Delaware (the "Court") captioned In re Rite Aid Corp. Stockholders Litigation, Consol. C.A. No. 11663-CB (the "Consolidated Action"), previously described in the proxy statements referenced herein, including the dismissal of the Consolidated Action and an agreement to pay a total of $75,000 in full satisfaction of plaintiffs' counsels' attorneys' fees and expenses in the Consolidated Action ("Plaintiffs").
Plaintiffs commenced the Consolidated Action on behalf of themselves and a putative class of Rite Aid stockholders to challenge the transactions contemplated by the merger agreement between Rite Aid and Walgreens Boots Alliance, Inc. ("WBA"), pursuant to which Rite Aid stockholders will receive $9.00 in cash for each share of Rite Aid stock they own upon consummation of the merger (the "Merger" or the "Transaction").
On November 24, 2015, Rite Aid filed a preliminary proxy statement with the United States Securities and Exchange Commission (the "SEC") on Schedule 14A (the "Preliminary Proxy Statement") that, among other things, described the background of the Transaction, the fairness opinion issued in connection with the Transaction, and certain financial information generated by Rite Aid's management.
Plaintiffs' complaint identified items that Plaintiffs alleged should have been disclosed to Rite Aid's stockholders, the purported absence of which they alleged deprived Rite Aid's stockholders of the ability to make a fully informed decision whether to vote their shares in support of the Transaction.
On December 21, 2015, Rite Aid filed a definitive proxy statement with the SEC (the "Definitive Proxy Statement"). The Definitive Proxy Statement supplemented the original Proxy Statement to include certain additional information, which Plaintiffs allege had the effect of mooting certain of Plaintiffs' disclosure claims. The Definitive Proxy Statement is accessible on the SEC's website at:
On December 28, 2015, Plaintiffs filed a Motion for Expedited Proceedings, seeking to have the Court schedule a preliminary injunction hearing with respect to their claims prior to the stockholder vote on the Merger. Defendants opposed the motion. On January 5, 2016, the Court denied Plaintiffs' motion, finding that Plaintiffs had failed to state a colorable claim.
On February 4, 2016, Rite Aid stockholders voted to approve the Merger. The Merger, which is expected to be completed in the second half of calendar 2016, is subject to the satisfaction of certain remaining customary closing conditions as set forth in the Merger Agreement and discussed in detail in the Definitive Proxy Statement.
Thereafter, Plaintiffs filed with the Court a Notice and Proposed Order Voluntarily Dismissing the Action as Moot and Retaining Jurisdiction to Determine Plaintiffs' Counsel's Application for an Award of Attorneys' Fees & Reimbursement of Expenses, which the Court granted.
As a result of negotiations that occurred after the dismissal of the Consolidated Action, Rite Aid has agreed to pay Plaintiffs' counsel a fee of $75,000 in full satisfaction of Plaintiffs' counsel's claim for attorneys' fees and expenses in the Consolidated Action. The parties to the litigation have agreed that payment will be made within ten (10) days of final dismissal and closure of the Consolidated Action. The Court has not been asked to review, and will pass no judgment on, the payment or amount of the $75,000 agreed-upon fee or its reasonableness.
Plaintiffs' counsel are Kahn Swick & Foti, LLC and Robbins Arroyo LLP.
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SOURCE Kahn Swick & Foti, LLC