Hagens Berman Sobol Shapiro LLP Announces Proposed Settlement of Class Action Involving Purchasers or Zuora, Inc. Common Stock

SAN FRANCISCO, Sept. 11, 2023 /PRNewswire/ --

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF CALIFORNIA

IF YOU (A) PURCHASED OR ACQUIRED ZUORA, INC. ("ZUORA") COMMON STOCK FROM APRIL 12, 2018 THROUGH MAY 30, 2019, INCLUSIVE, AND/OR (B) PURCHASED OR OTHERWISE ACQUIRED SHARES OF ZUORA, INC. COMMON STOCK PURSUANT OR TRACEABLE TO THE REGISTRATION STATEMENT AND PROSPECTUS ISSUED IN CONNECTION WITH ZUORA'S APRIL 12, 2018 INITIAL PUBLIC OFFERING, YOUR RIGHTS MAY BE AFFECTED BY A PROPOSED SETTLEMENT IN A LAWSUIT PENDING IN FEDERAL COURT (THE "ACTION").¹ PLEASE READ CAREFULLY.

YOU ARE HEREBY NOTIFIED that a hearing will be held on January 12, 2024, at 10:00 am., before the Honorable Susan Illston, United States District Judge, at the United States District Court for the Northern District of California (the "Court"), 450 Golden Gate Avenue, San Francisco, California 94102 for the purpose of determining: (1) whether the proposed settlement in the Amended Stipulation and Agreement of Global Settlement, dated June 22, 2023, of the Action for $75,500,000 in cash (the "Settlement Amount") should be approved as fair, reasonable, and adequate to the Class Members; (2) whether the proposed Plan of Allocation of the Settlement Amount is fair, reasonable, and adequate; (3) whether the application by Lead Counsel and Class Counsel, Hagens Berman Sobol Shapiro LLP ("Class Counsel"), for attorneys' fees and expenses and for an award to the Court-appointed Lead Plaintiff and Class Representative New Zealand Methodist Trust Association ("Class Representative") should be approved; (4) whether the application by State Class Counsel for attorneys' fees and expenses and for an award to the State Class Representative should be approved; and (5) whether the proposed Judgment should be entered.  The Court may adjourn the Settlement Hearing to another time (i.e., reschedule) without further notice to the Class.  Before the Settlement Hearing, Class Members who plan to attend should check the Settlement Website or the Court's PACER site.

The Action (or "Federal Action") has been certified as a class action on behalf of all investors (individuals and entities) who purchased or acquired Zuora common stock from April 12, 2018 through May 30, 2019, inclusive, and who were damaged thereby ("Class Members").  The Action asserts claims against Zuora and certain individual defendants under the Securities Exchange Act of 1934 ("Exchange Act").  A detailed description of the Action, including the parties, the claims and defenses, and other important information about your rights and options are in the detailed Notice of Pendency and Proposed Settlement of Class Action (the "Notice").

Class Representative alleged that during the period between April 12, 2018 and May 30, 2019, the Federal Action Defendants made materially false and misleading statements in violation of §10(b) of Exchange Act, Rule 10b-5 promulgated thereunder, and §20(a) of the Exchange Act, which caused the price of Zuora stock to trade at artificially inflated prices.  Specifically, Class Representative alleged that the Federal Action Defendants misled investors during the Class Period by making public statements that did not reflect the actual state of the functionality of Zuora's platform as a combined solution, the integrated nature of its flagship products, Billing and RevPro, through the "Keystone" integration project, and Zuora's path for growth via cross-selling and upselling Billing and RevPro.  Class Representative alleged that persons who purchased Zuora stock during the Class Period suffered economic losses when the price of Zuora stock declined as a result of the May 30, 2019 disclosure addressing the integration failure, sales execution issues, and disappointing financial performance and outlook. 

During the course of the Litigation, the parties engaged a third-party mediator, Robert A. Meyer, Esq., of JAMS.  After the submission of comprehensive mediation statements and other materials, the parties participated in a mediation via videoconference with Mr. Meyer on January 18, 2022.  The parties did not reach a resolution with Mr. Meyer at that time.  On May 31, 2022, the Court entered an order referring this action to Magistrate Judge Kandis Westmore for settlement.  As part of the conferences with Judge Westmore, the parties agreed to resume further mediation with Mr. Meyer.  On February 2, 2023, the parties conducted an in-person mediation with Mr. Meyer.  Although no resolution was reached during the mediation, the parties continued discussions with Mr. Meyer.  On March 31, 2023 – one week before oral arguments on the Federal Action Defendants' summary judgment motion and motion to exclude expert testimony and Class Representative's motions to exclude expert testimony – the parties reached an agreement to settle the litigation, subject to approval by the Court. 

After Class Representative filed its motion for preliminary approval of the Settlement on May 15, 2023, the parties conducted additional negotiations with the State Class Counsel from Olsen v. Zuora, Inc., Lead Case No. 20-CIV-01918 (the "State Action"), pending in the Superior Court of California for the County of San Mateo (the "State Court").  The State Action claims concern Sections 11 and 15 of the Securities Act of 1933 and relate to the purchase or other acquisition of Zuora common stock pursuant or traceable to the Registration Statement and Prospectus issued in connection with Zuora's April 12, 2018 initial public offering. 

On June 1, 2023, with the assistance of Mr. Meyer, the Settling Parties reached an amended settlement agreement in principle which would resolve the Federal Action and State Action concurrently for $75,500,000, subject to approval by the Court.  The Settlement further releases and calls for the dismissal of all claims for damages by Class Members in State Action.

At the Fairness Hearing, Class Counsel will request that the Court award aggregate attorneys' fees according to the terms of the retainer agreement between the Class Representative and Class Counsel.  These attorney's fees are estimated to be no more than 30% of the Settlement Amount, or $22,650,000.  Class members are not personally liable for any such fees or any other expenses (estimated not to exceed $1,250,000 for litigation expenses, and $275,000 for Notice and Administration Expenses).  In addition, Lead Plaintiff may seek payment not to exceed $25,000.00 for its time and expenses incurred in representing the Class.  The net recovery for Class Members (also referred to as the Net Settlement Fund) is estimated to be at least $51,300,000 ($75,500,000 minus all of the foregoing fees and expenses).

Based on the benefit added to the Federal Action through their efforts in the State Action, State Class Counsel intends to seek attorneys' fees and expenses not to exceed $1,000,000.  Any award of attorneys' fees and expenses to State Class Counsel will come out of the award of attorneys' fees and expenses to Class Counsel.  Any award to State Class Representative will be paid from the award to State Class Counsel.            

To obtain the Notice or a copy of the Proof of Claim and Release form ("Proof of Claim and Release"), visit the settlement website at www.ZuoraSecuritiesLitigation.com or write to Zuora Securities Litigation, c/o Epiq Class Action and Claims Solutions, Inc., P.O. Box 5530, Portland, OR 97228-5530.

To get a payment from the Net Settlement Fund, you must submit a Proof of Claim and Release establishing that you are entitled to a recovery so that it is postmarked or submitted online no later than December 30, 2023.  Failure to submit your Proof of Claim and Release by December 30, 2023 will subject your claim to possible rejection and may preclude you from receiving any payment from the settlement.  If you are a Class Member, you will be bound by the settlement and any judgment entered in the Action, whether or not you submit a Proof of Claim and Release.

To object to any aspect of the settlement, including the Plan of Allocation, or the applications for attorneys' fees and expenses, you must submit a written objection in accordance with all the instructions set forth in the Notice that is received or filed, not simply postmarked, on or before December 22, 2023.  If you object, but also want to be eligible for a payment from the settlement, you must still submit a timely Proof of Claim and Release.

EXCLUSION FROM THE CLASS - On March 15, 2021, the Court certified the Class in this case.  On October 14, 2021, the State Court certified the Class in the State Action.  On August 12, 2022, the Court and State Court-ordered notice was disseminated to potential Class Members.  That notice required Class Members seeking exclusion to make a formal request to the Court and/or State Court postmarked no later than October 30, 2022.  If you validly sought to be excluded from the Class, you are not eligible to receive any payment out of the Net Settlement Fund.  There is no further opportunity to exclude yourself from this Settlement.  If you are a Class Member, your options, as stated in detail above, are: (1) submit a Claim Form and participate in the Settlement Fund; (2) object to the Settlement; or (3) do nothing. Regardless of the option chosen, if the Court approves the Settlement, it will bind Class Members.

This Notice contains only a summary of the terms of the proposed settlement and does not describe all of the details of the Stipulation.  For the precise terms and conditions of the settlement, please see the Stipulation available at www.ZuoraSecuritiesLitigation.com; by contacting Class Counsel at 510-725-3000; by accessing the Court docket in the Action through the Federal Court's Public Access to Court Electronic Records (PACER) system at https://ecf.cand.uscourts.gov, or by visiting the office of the Clerk at the United States District Court for the Northern District of California, 450 Golden Gate Avenue, San Francisco, California 94102, between 9:00 a.m. and 4:00 p.m., Monday through Friday, excluding Court holidays.

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

If you have any questions about the settlement, you may contact Class Counsel at the following address:

Class Counsel

Steve Berman
Hagens Berman Sobol Shapiro LLP
1301 Second Avenue, Suite 2000
Seattle, WA 98101
Telephone: (206) 623-7292
Facsimile: (206) 623-0594
[email protected]

Lucas E. Gilmore
Hagens Berman Sobol Shapiro LLP
715 Hearst Avenue, Suite 300
Berkeley, CA 94710
Telephone: (510) 725-3000
Facsimile: (510) 725-3001
[email protected]

__________________________

¹ All capitalized terms used in this Notice that are not otherwise defined herein shall have the meanings provided in the Amended Stipulation and Agreement of Global Settlement dated June 22, 2023 (the "Stipulation"), which is at www.ZuoraSecuritiesLitigation.com.

URL// www.ZuoraSecuritiesLitigation.com

SOURCE Hagens Berman Sobol Shapiro LLP