|Status:||Deadlines have been extended.
Notice and Claim Forms are being mailed.
|Claims Filing Deadline:||May 4, 2017|
|Exclusion Deadline:||May 18, 2017|
|Objection Deadline:||May 18, 2017|
|Settlement Hearing:||June 8, 2017 at 9:00 a.m.|
IF YOU PURCHASED OR OTHERWISE ACQUIRED SHARES OF KALOBIOS PHARMACEUTICALS, INC. (“KALOBIOS”) COMMON STOCK BETWEEN NOVEMBER 18, 2015, AND DECEMBER 16, 2015, INCLUSIVE, YOU COULD RECEIVE A PAYMENT FROM A PARTIAL CLASS ACTION SETTLEMENT.
A federal court authorized this Notice.
This is not a solicitation from a lawyer. Your legal rights are affected whether you act or don’t act. Read this Notice carefully.
SUMMARY OF KEY PROVISIONS AND REASONS FOR SETTLEMENT
- The Partial Settlement will provide one million five hundred thousand dollars ($1,500,000.00) and three hundred thousand (300,000) shares in KaloBios (the “Settlement Fund”). If approved by the Court, the Partial Settlement will settle certain claims, as against the Settling Defendants, from investors who bought or otherwise acquired KaloBios shares between November 18, 2015, and December 16, 2015 (the “Settlement Class Period’).
- The Partial Settlement resolves a securities fraud class action lawsuit (the “Action”) over allegations that KaloBios and certain of its officers and directors misled its shareholders during the Settlement Class Period about KaloBios’s operations and business prospects, as well as prior misconduct by Defendant Martin Shkreli (“Shkreli”), who assumed control of KaloBios at the outset of the Settlement Class Period and was arrested the day after it ended.
- The Settling Defendants are KaloBios, Ronald Martell (“Martell”) (its former Executive Chairman), and Herb Cross (“Cross”) (its former Chief Financial Officer).
- Defendant Shkreli is not part of the Partial Settlement. The litigation of the Action against him remains ongoing. Per the terms of the Partial Settlement, KaloBios, its current Director David Moradi (“Moradi”), Martell, and Cross have agreed to produce documents and give testimony at the appropriate juncture.
- The Court did not decide in favor of the Plaintiffs or the Settling Defendants. Instead, both sides agreed to a Partial Settlement. This permits these settling parties to avoid the cost, delay, and uncertainty of a trial, as well as the risks posed by KaloBios’s bankruptcy, and permits eligible Settlement Class Members who submit valid claims to receive some compensation rather than risk ultimately receiving nothing. Both the Plaintiffs and the Settling Defendants have taken into account the uncertainty and risks inherent in any litigation, especially in complex cases such as the Action. The Plaintiffs and their attorneys believe the Partial Settlement is best for all Settlement Class Members. The Settling Defendants, while denying the allegations and maintaining they did nothing wrong, have concluded that further defense of the Action would be protracted and expensive, and that it is desirable that the Action be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation of Settlement (the “Stipulation”). The two sides disagree on how much money could have been won if the investors won at trial.
- Lead Counsel for the Class will ask the Court for up to 25% of the Settlement Fund (cash and stock) in attorneys’ fees, and reimbursement of up to fifty thousand dollars ($50,000.00) for litigation costs. Lead Counsel will also ask the Court to pay Lead Plaintiffs Kaniz Fatema, Zeke Ingram, Bhaskar R. Gudlavenkatasiva and Abuhena M. Saifulislam, and initial Plaintiff Austin Isensee (altogether “Plaintiffs”) up to five hundred dollars ($500.00) each for their contributions to this lawsuit.
- The Court in charge of this case still has to decide whether to approve the Partial Settlement. The Court has set a Settlement Hearing for May 11, 2017 at 9:00 a.m. to consider whether to approve the Partial Settlement. Payments will be made if the Court approves the Partial Settlement, orders distribution of such monies, and all appeals are resolved. Please be patient.
- If the proposed Partial Settlement is approved after the Settlement Hearing, the Court will enter a Judgment and Order of Final Approval (the “Judgment”). The Judgment will dismiss with prejudice, release, and forever discharge both the Settlement Class Claims against the Settling Defendants and the Released Parties and the Defendant Claims against the Plaintiffs, Lead Counsel and other Plaintiffs’ counsel, and any Settlement Class Members. The terms of the releases, including the meaning of the terms “Settlement Class Claims” and “Defendant Claims” are set forth in the Proof of Claim and Release form that is enclosed.
|YOUR LEGAL RIGHTS AND OPTIONS IN THIS PARTIAL SETTLEMENT ACTION DEADLINE SIGNIFICANCE SUBMIT A CLAIM FORM|
|SUBMIT A CLAIM FORM||Postmarked no later than May 4, 2017||The only way to get a payment.|
|EXCLUDE YOURSELF||Postmarked no later than May 18, 2017||Get no Payment. This is the only option that allows you to ever be part of any other lawsuit against KaloBios, Martell, Cross and other Released Parties about the legal claims that were at issue in this case.|
|OBJECT||Filed and served no later than May 18, 2017||Write to the Court about why you do not like the Partial Settlement.|
|GO TO A HEARING||June 8, 2017||Ask to speak in Court about the fairness of the Partial Settlement.|
|DO NOTHING||Get no payment. Give up your rights to bring an individual action.|
- You may submit a claim or object, or do both, or do nothing.
- You may also exclude yourself. However, if you timely exclude yourself that is the only thing you can do: you cannot then also object in writing, appear at the Settlement Hearing to state any objections, or submit a claim.
- If you object rather than request exclusion, you will remain a Settlement Class Member, and if the Court approves the Partial Settlement, you will be bound by the terms of the Partial Settlement in the same way as Settlement Class Members who do not object.
- Unless you timely request exclusion from the Settlement Class, or unless the Court rejects the proposed Partial Settlement, you are bound by the Stipulation, whether or not you submit a claim or object.
- These rights and options are explained in this Notice. Please take careful note of the deadlines to exercise them, set forth above.