In re King Resources Co. Securities Litigation

• Decision Date: 10 August 1976
• Docket Number: Civ. A. No. C-3873.
• Citation: 420 F. Supp. 610
• Parties: In re KING RESOURCES COMPANY SECURITIES LITIGATION. Harold BOTTGER et al., Plaintiffs, v. KING RESOURCES COMPANY, a Maine Corporation, et al., Defendants.
• Court: U.S. District Court — District of Colorado

420 F. Supp. 610

In re KING RESOURCES COMPANY SECURITIES LITIGATION.

Harold BOTTGER et al., Plaintiffs, v. KING RESOURCES COMPANY, a Maine Corporation, et al., Defendants.

Civ. A. No. C-3873.

United States District Court, D. Colorado.

August 10, 1976.

Gerald L. Bader, Jr., Robert A. Dufty, Robert J. Dyer, III, Bader & Dufty, Denver, Colo., Eugene W. Landy, Landy & Spector, Eatontown, N. J., for plaintiffs.

John S. Pfeiffer, Gorsuch, Kirgis, Campbell, Walker & Grover, Denver, Colo., for Charles A. Baer, Trustee of defendant King Resources Co.

Robert D. Inman, Timothy A. Correll, Inman, Flynn & Coffee, P.C., Denver, Colo., for William C. Lam, Trustee of defendant The Colorado Corp.

Philip G. Dufford, Welborn, Dufford, Cook & Brown, Denver, Colo., John A. Criswell, Criswell, Patterson & Ballantine, Englewood, Colo., for defendants Imperial-American limited partnerships and Theodore H. Frison, Trustee of Imperial-American Resources Fund.

James C. Bull, Quiat, Bucholtz & Bull, Denver, Colo., for defendants Royal Resources Corp., Royal Resources Exploration, Inc. and the Royal limited partnerships.

William G. Sumners, Jr., Denver, Colo., for defendants Denver Corp., Imperial-American Management Co. and Regency Management Co.

Harold Taft King, Denver, Colo., Edgar H. Brenner, Milton V. Freeman, Robert D. Rosenbaum, Rosalind C. Cohen, Scott B. Schreiber, Arnold & Porter, Neal A. Jackson, MacLeay, Lynch, Bernhard & Gregg, Washington, D.C., for defendant Ginsburg, Feldman & Bress.

Hardin Holmes, James C. Ruh, Ireland, Stapleton, Pryor & Holmes, Denver, Colo., for defendant Myer Feldman.

James E. Elliott, Jr., Jeffrey A. Hyman, Elliott & Greengard, Denver, Colo., Donald J. McLachlin, John M. Christian, Robert H. Wheeler, Isham, Lincoln & Beale, Richard J. Phelan, Chicago, Ill., for defendants Peterson, Ross, Rall, Barber & Seidel and Herbert C. Loth, Jr.

H. Thomas Coghill, Coghill, Goodspeed & Roble, Denver, Colo., Charles W. Boand, Wilson & McIlvaine, Chicago, Ill., for defendant Arthur Andersen & Co.

H. Clay Whitlow, Dawson, Nagel, Sherman & Howard, Denver, Colo., P. B. Konrad Knake, Jr., Peter B. Collins, Jeffrey B. Chase, White & Case, New York City, for defendant Arthur Young & Co.

Ernest W. Lohf, Paul F. Hultin, Lohf & Barnhill, Denver, Colo., for defendants Stanley C. Hope, J. L. Burke, Joseph J. Foss, Grover E. Murray, Arthur J. C. Underhill.

C. Henry Roath, Jay W. Enyart, Roath & Brega, Denver, Colo., for defendants Edward R. Annis, M.D., George C. Hardin, Jr., Marvin R. Barnett, Paul W. Fairchild, Charles R. McCoy and David E. Melendy.

Michael A. Sabian, Pendleton, Sabian, Guthery & Lewis, Denver, Colo., for defendant Walter M. Schirra, Jr.

John M. King, pro se.

William R. Fishman, Denver, Colo., for defendant Frank Eliot Sweetser.

FINDINGS OF FACT AND CONCLUSIONS OF LAW APPROVING PARTIAL SETTLEMENTS

and

MEMORANDUM OPINION AND ORDER AWARDING ATTORNEY FEES AND COSTS

FINESILVER, District Judge.

FINDINGS OF FACT AND CONCLUSIONS OF LAW APPROVING PARTIAL SETTLEMENTS

THIS MATTER came before the Court for hearing on June 14, 1976, pursuant to Notice to Plaintiffs, members of the plaintiff class ("the Bottger class"), and all defendants, to determine the fairness, reasonableness and adequacy of eight proposed partial settlements and compromises (agreements # 5 through # 12) in this action embodied in certain settlement agreements and introduced at said hearing. Preliminary approval was given to all eight such settlements by this Court's Order 1976-21 entered March 31, 1976, after hearings held on December 19, 1975, January 23, 1976, February 26, 1976, and March 1, 1976, the Court having received statements and evidence from plaintiffs and defendants on those occasions in support of such settlements. Order 1976-21, incorporated herein by reference, also specified the form of notice of these settlements to be sent to the class and published.

All but three (3) defendants (John M. King, Marvin R. Barnett and Edward R. Annis), out of the original 29 active defendants in this class action securities litigation have entered into various partial settlements as detailed in the Agreements on file with this court, specifically, Agreement # 1 between Plaintiffs, Theodore H. Frison, Trustee in Reorganization of Imperial-American Resources Fund, Inc. IARF and William C. Lam, Trustee for the Colorado Corporation; Agreement # 2 between Plaintiffs and Trustee Lam relating to Royal Resources Corporation RRC; Agreement # 3 between Plaintiffs, Trustee Frison and Trustee Lam relating to the "Hope Defendants"; and Agreement # 4 between Plaintiffs, Trustee Lam and Charles A. Baer, Trustee in Reorganization of the King Resources Company KRC; Agreement # 5 between Plaintiffs, Trustee Frison and Charles F. McCoy; Agreement # 6 between Plaintiffs, Trustee Frison and David E. Melendy; Agreement # 7 between Plaintiffs and George C. Hardin, Jr.; Agreement # 8 between Plaintiffs and Ginsburg, Feldman & Bress; Agreement # 9 between Plaintiffs, Trustee Frison and Myer Feldman; Agreement # 10 between Plaintiffs and Peterson, Ross, Rall, Barber & Seidel and Herbert C. Loth, Jr.; Agreement # 11 between Plaintiffs, Trustee Frison and Arthur Andersen & Co.; and Agreement # 12 between Plaintiffs, Trustee Frison and Arthur Young & Co.

A preliminary hearing was held on September 18 and 19, 1975, to determine if there was probable cause to believe that proposed partial settlements # 1 through # 4 were fair, reasonable and adequate and to determine if the terms and conditions of those proposed settlements should be submitted to the members of the class. On October 23, 1975, this Court Order 1975-45 granted preliminary approval to said proposed partial settlements and directed that the terms of Agreements # 1 through # 4 be submitted to members of the class for consideration. Following notice to members of the plaintiff class by mailing and publication in The Wall Street Journal (national edition) of November 6, 1975, a full and complete settlement hearing was held on December 19, 1975. At the conclusion of that hearing partial settlements # 1 through # 4 were approved by the Court as "fair, reasonable and adequate". Findings of Fact and Conclusions of Law Approving the Partial Settlements were formally entered on February 20, 1976. The proceedings are more fully described in that Order Order 1976-14, which is incorporated herein by reference.

Subsequently, additional defendants entered into settlement agreements with the Bottger Class plaintiffs in this action. Defendants now settling with the class and to whom this Order finally approving settlements is directed are as follows: Charles F. McCoy (Settlement # 5); David E. Melendy (Settlement # 6); George C. Hardin, Jr. (Settlement # 7); Ginsburg, Feldman & Bress (Settlement # 8); Myer Feldman (Settlement # 9); Peterson, Ross, Rall, Barber & Seidel and Herbert C. Loth, Jr. (Settlement # 10); Arthur Andersen & Co. (Settlement # 11); and Arthur Young & Co. (Settlement # 12).

Pursuant to this Court's Order 1976-21, filed March 31, 1976, individual "Important Notices of Proposed Partial Settlements of Class Action" were mailed on April 16, 1976, to all class members whose names and addresses could be reasonably ascertained, as well as to all persons who had previously excluded themselves from the class, advising them of the terms of the eight instant settlements and that a final hearing would be held on June 14, 1976, in the United States Courthouse, Denver, Colorado, to determine the fairness, reasonableness and adequacy of the terms and conditions of such settlements. The Notice also advised that the Court would consider the applications of plaintiffs' attorneys for an award of fees and expenses at a hearing to be held on June 14, 1976, in the United States Courthouse, Denver, Colorado, and stated the amount of awards requested. The Notice also stated where questions concerning the Notice, proposed settlements, and Proof of Claim form should be directed. In addition to the mailed Notice, a verbatim copy of the Notice was published on April 22, 1976, in the national edition of The Wall Street Journal, The Denver Post and The Rocky Mountain News.

The Court finds that the Notice is neither defective nor misleading but fairly states the terms and conditions of the eight settlements and gives proper and sufficient notice of the hearing and of other actions connected with these settlements. The Court expressly finds that the above Notice satisfies the requirements of Rules 23(e) and 23.1 and the requirements of due process.

Pursuant to Order 1976-21 of this Court, Proof of Claim forms were sent out together with the Settlement Notices to the same persons who received such Notices, as above stated. Such Proof of Claim forms contained instructions on how they should be filled out, as well as a self-addressed return envelope for mailing such Proofs of Claim. The Court finds these Proof of Claim forms and their service on members of the class to be sufficient to satisfy due process requirements and Rules 23(e) and 23.1. It was also stated in such Proof of Claim forms that previous filing of the Proof of Claim form sent out with the earlier Notice of Settlements would suffice for a sharing in the instant settlement proceeds.

The Court now having considered the testimony, affidavits, depositions, exhibits, transcripts of other hearings before this Court, and arguments submitted in connection with the settlement agreements; the Court having heard from all interested persons who appeared at the hearing, or who made written submissions to the Court; the Court having received no objections whatsoever to the settlements in written or oral form by any member of the class or any other defendant; and the court being fully advised in the premises, the Court makes the following findings of fact and conclusions of law which shall constitute the findings of fact and conclusions of law in support of...