NEW YORK, Sept. 9, 2016 /PRNewswire/ -- This notice relates to a proposed voluntary dismissal of a shareholder derivative action and is being given pursuant to an order of The United States District Court for the Southern District of California. The purpose of the notice is to advise shareholders of Bridgepoint Education, Inc. (NYSE: BPI) ("Bridgepoint" or the "Company") that the plaintiff James Cannon ("Plaintiff") in the action James Cannon v. Andrew S. Clark, et al., Case No. 13-CV-2645 JM (NLS) (S.D. Cal.) (the "Action") wishes to voluntarily dismiss the case. Additional information on the action and right to intervene can be found below.
THE SHAREHOLDER DERIVATIVE ACTION
On November 1, 2013, after making a books and records demand pursuant to 8 Del. C. §220 (the "Inspection Demand") and receiving documents pursuant thereto, Plaintiff filed a shareholder derivative action against defendants Andrew S. Clark, Daniel J. Devine, Jane McAuliffe, Rodney T. Sheng, Patrick Hackett, Ryan Craig, Robert Hartman, Adarsh Sarma, Dale Crandall, Dr. Marye Anne Fox, and Andrew M. Miller (collectively, the "Individual Defendants") on behalf of nominal defendant Bridgepoint. On November 18, 2013, and in light of Plaintiff's use of confidential information derived from the Inspection Demand, the Court granted Plaintiff's Motion to File Verified Shareholder Derivative Complaint Under Seal and ordered Plaintiff to file a complaint in the public record redacting any information covered by the parties' Confidentiality Agreement. Thereafter, the Action was stayed by joint motion and order of the Court dated January 6, 2014, pending the completion of discovery in a related federal securities action entitled In re Bridgepoint Education, Inc. Securities Litigation, 3:12-cv-01737 JM (WMC) (S.D. Cal.). No responsive pleadings have been filed in the Action by Defendants. A related shareholder derivative action was also filed in the Superior Court of the State of California, San Diego County, entitled In re Bridgepoint Education Inc. Shareholder Derivative Litigation, Lead Case No.: 37-2012-00101167-CU-BT-CTL, remains pending and will not be effected by the proposed dismissal of the Action.
The Action arises from alleged breaches of fiduciary duties by the Individual Defendants in connection with the alleged issuance of materially false and misleading statements about Bridgepoint's accreditation prospects at Ashford University, and Bridgepoint's operations, management, and internal controls. Based on these allegations, the Action asserts claims for (1) breach of fiduciary duty; (2) abuse of control; (3) gross mismanagement; (4) waste of corporate assets; (5) breach of the fiduciary duties of loyalty and good faith in connection with insider stock sales; and (6) unjust enrichment. The Action seeks monetary damages, injunctive relief, and attorneys' fees and costs.
On June 12, 2015, Plaintiff's counsel notified the District Court that Plaintiff had sold all of his Bridgepoint stock and that he no longer had the requisite legal standing to pursue the Action on behalf of the Company because he was no longer a Bridgepoint shareholder. On June 16, 2015, the District Court denied Plaintiff's request to dismiss the action without prejudice and without notice to stockholders and held that Plaintiff could file another request. On July 7, 2015, Plaintiff filed a further request for dismissal. On August 3, 2015, the District Court denied plaintiff's motion to voluntarily dismiss without notice and ordered the parties to submit a joint notice plan contemplating the issuance of notice of the proposed voluntary dismissal of the Action to Bridgepoint shareholders and a procedure by which other Bridgepoint shareholders could intervene in the Action. If no other Bridgepoint shareholder seeks to intervene in the Action, Plaintiff shall file a motion with the District Court requesting dismissal of the Action.
THE RIGHT TO INTERVENE IN THE ACTION
Any Bridgepoint shareholder may seek to intervene as a plaintiff in the Action if he, she, or it (1) currently owns shares in Bridgepoint and has continuously held those shares since May 3, 2011; and (2) wishes to pursue the claims in the Action or has any reason why the action should not be voluntarily dismissed. All motions to intervene must be filed with the Clerk of the Court no later than October 24, 2016. Every motion to intervene must contain: (1) the caption of the Action which is James Cannon v. Andrew S. Clark, et al., Case No. 13-CV-2645 JM (NLS) (S.D. Cal.); (2) the intervenor's name, address and phone number; (3) proof or certification of the date the intervenor purchased Bridgepoint stock and has continuously held the stock to the present; and (4) any supporting papers, including all documents and writings that the intervenor desires the Court to consider.
Any motions to intervene must be filed with the District Court at:
Clerk of Court
United States District Court for the Southern District of California
Edward J. Schwartz U.S. Courthouse
221 West Broadway
San Diego, CA 92101
A copy of any motion to intervene must also be mailed to:
Ignacio E. Salceda
Wilson Sonsini Goodrich & Rosati
650 Page Mill Road
Palo Alto, CA 94304-1050
Attorneys for Defendants Andrew S. Clark, Daniel J. Devine, Jane McAuliffe, Rodney T. Sheng, Patrick Hackett, Ryan Craig, Robert Hartman, Adarsh Sarma, Dale Crandall, Dr. Marye Anne Fox, and Andrew M. Miller and Nominal Defendant Bridgepoint Education, Inc.
Beth A. Keller
Hynes Keller & Hernandez, LLC
118 N. Bedford Road, Ste. 100
Mt. Kisco, NY 10549
Attorneys for Plaintiff James Cannon
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SOURCE Hynes Keller & Hernandez, LLC