Announcing a Proposed Settlement Involving All Record Holders and Beneficial Owners of Common Stock of Altisource Residential Corporation

Aug 17, 2015, 07:59 ET from Circuit Court for Baltimore City, Maryland

BALTIMORE, Aug. 17, 2015 /PRNewswire/ --

THE POLICE RETIREMENT

SYSTEM OF ST. LOUIS,

Plaintiff,

v.

WILLIAM C. ERBEY, et al.

Defendants.

IN THE

CIRCUIT COURT

FOR

BALTIMORE CITY

Case No.: 24-C-15-000223

 

SUMMARY NOTICE OF PENDENCY AND PROPOSED
SETTLEMENT OF STOCKHOLDER DERIVATIVE
ACTION, SETTLEMENT HEARING, AND RIGHT TO APPEAR

TO:      ALL RECORD HOLDERS AND BENEFICIAL OWNERS OF COMMON STOCK OF ALTISOURCE RESIDENTIAL CORPORATION ("RESI Stockholders")

YOU ARE HEREBY NOTIFIED that the parties to the above-captioned stockholder derivative action (the "Action"), which consist of (a) plaintiff—The Police Retirement System of St. Louis ("Plaintiff"), acting derivatively as a stockholder on behalf of Altisource Residential Corporation ("RESI" or the "Company"); (b) defendants James H. Mullen, Jr., David B. Reiner, Robert J. Fitzpatrick, Michael A. Eruzione (collectively the "Independent Director Defendants"), William C. Erbey ("Erbey"), Altisource Asset Management Corporation ("AAMC"), and Altisource Residential, L.P. (the "Partnership" and, together with the Independent Director Defendants, Erbey and AAMC, the "Defendants"); and (c) nominal defendant RESI (together with Plaintiff and the Defendants, the "Parties"), have entered into a Stipulation and Agreement of Compromise, Settlement, and Release dated June 30, 2015 (the "Stipulation") to fully and finally resolve all Released Claims, as defined in the Stipulation, (the "Settlement"), subject to approval by the Circuit Court for Baltimore City, Maryland (the "Court").

The Stipulation has been entered into by the Parties to settle the Released Claims (as defined in the Stipulation).  The Action involves claims for breach of fiduciary duties and waste against the Independent Director Defendants and Erbey (also a director of RESI at the time) and for unjust enrichment against AAMC and Erbey, arising out of or relating to the Asset Management Agreement dated December 21, 2012 between AAMC on the one side and RESI and the Partnership on the other side. 

The Parties have agreed to settle the Action based on the New Asset Management Agreement executed on March 31, 2015 and effective April 1, 2015.  During the negotiations over the terms of the New Asset Management Agreement, Plaintiff's Counsel provided detailed comments on drafts of the proposed agreement to Counsel for the Independent Director Defendants, which comments were used by that Counsel in negotiations with Counsel for AAMC.  Upon final approval of the Settlement by the Court, all Released Claims (as defined in the Stipulation) will be dismissed with prejudice on the merits.  For their legal services to the Company and RESI Stockholders, Plaintiff's Counsel will petition the Court for an award of attorneys' fees and expenses, as set forth in the Stipulation, and Defendants have agreed not to oppose that petition or award of fees and expenses up to an amount specified in the Stipulation and the Long-Form Notice (defined below).  Any award of attorneys' fees and expenses will be paid by the Defendants (or their successors-in-interest) or their insurers, and RESI Stockholders will not be personally liable for any such fees or expenses.

YOU ARE HEREBY FURTHER NOTIFIED that pursuant to a Court order, a hearing will be held on November 9, 2015 at 9:30 a.m. Eastern Time, before the Court at Courthouse East, 111 North Calvert Street, Room 523, Baltimore, Maryland 21202, to (i) determine whether the Court should approve the Settlement as fair, reasonable, and adequate and in the best interests of the Company and RESI Stockholders; (ii) consider other matters, including the request by Plaintiff's Counsel for an award of attorneys' fees and expenses; and (iii) hear and determine any objections to the foregoing.

More information and details about the Settlement and the Settlement Hearing are provided in the "Notice of Pendency and Proposed Settlement of Stockholder Derivative Action, Settlement Hearing, and Right to Appear" (the "Long-Form Notice"), which, along with the Stipulation, is available for review on RESI's corporate website for shareholders under Derivative Action Settlement (http://ir.altisourceresi.com/derivative-action-settlement.cfm).  The Long-Form Notice is also an exhibit to a Form 8-K filed by RESI with the United States Securities and Exchange Commission ("SEC") on August 13, 2015, and the New Asset Management Agreement is an exhibit to a Form 8-K filed by RESI with the SEC on April 2, 2015. You are urged to review these materials.

If you are a RESI Stockholder, your rights may be affected by the proposed Settlement.  YOUR RIGHT TO OBJECT TO THE SETTLEMENT OF THE ACTION MAY BE AFFECTED BY AND DEPEND UPON THE DATE YOU ACQUIRED RESI COMMON STOCK AND WHETHER YOU CONTINUE TO OWN RESI COMMON STOCK.  For example, RESI may take a position at the Settlement Hearing that a legal right to object to the Settlement exists only for a RESI Stockholder: (i) who owned, as a record or beneficial owner, common stock of RESI on March 30, 2015, March 31, 2015, April 1, 2015, or April 2, 2015; and (ii) who also has continuously owned RESI common stock since then.  The Court has not yet made any determination as to which RESI Stockholders may have a legal right to object.

Any RESI Stockholder who does not object to the Settlement or the attorneys' fees and expenses petition need not do anything in response to this Notice.  If you wish to make an objection, however, you must do so by October 19, 2015 in accordance with the procedures established by the Court, which are set forth in detail in the Long-Form Notice.

PLEASE DO NOT TELEPHONE THE COURT OR
THE CLERK'S OFFICE REGARDING THIS NOTICE

Dated: August 13, 2015

Form and Substance of Notice Approved by Court Order Dated August 3, 2015.

URL: http://ir.altisourceresi.com/derivative-action-settlement.cfm

 

SOURCE Circuit Court for Baltimore City, Maryland