Roadrunner Transportation Systems, Inc. Securities Litigation Frequently Asked Questions

Frequently Asked Questions about the Roadrunner Transportation Systems, Inc. Securities Litigation

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Questions

Answers

1.

What is this lawsuit about?

Answer:

This Action involves allegations that during the period from March 14, 2013 through January 30, 2018, inclusive, the Roadrunner Defendants made or caused to be made false and misleading representations and omissions in press releases, conference calls with securities analysts and financial statements filed with the Securities and Exchange Commission, regarding Roadrunner's financial results and performance metrics, including net income and earnings per share, debt leverage ratios, business status and the Company's expenses associated with its Tractor Lease Guarantee Program, which it relied upon to recruit and maintain independent contractor drivers.  The Action also involves allegations that investors, and alleged "control persons" HCI Equity Partners, LLC and HCI Equity Management, L.P. and their general manager, Scott D. Rued, who they were able to elect as Chairman of the Board of Roadrunner, possessed influence and control over the Roadrunner Defendants with respect to each of its Annual Reports on Form 10-K filed with the SEC between March 13, 2013 and January 30, 2017.  The Action also alleges that defendants DiBlasi and Armbruster sold substantial amounts of their shares at artificially inflated prices during that time frame and that the HCI entities sold a significant portion of their investment in shares of Roadrunner during the Class Period, including in a secondary offering in August 2013.  The Roadrunner Defendants and the HCI Defendants deny they did anything wrong or violated the federal securities laws.

On January 30, 2017, Roadrunner warned investors that its financial statements needed to be restated and that they should not be relied upon.  A year later, on January 31, 2018, prior to the opening of trading, the Company issued a restatement of its prior financial results, including restating previously materially over-reported net income and materially under-reported expenses.  ("January 31, 2018 Restatement").  On March 12, 2018, Lead Plaintiff filed a Consolidated Amended Class Action Complaint for Violations of the Federal Securities Laws ("Complaint"), asserting claims under Section 10(b) of the Securities Exchange Act of 1934 (the "Exchange Act") and Rule 10-b5 promulgated thereunder against the Roadrunner Defendants, and under Section 20(a) of the Exchange Act against all Defendants.

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2.

What does the Settlement provide and how do I receive a Settlement benefit?

Answer:

Subject to Court approval, Lead Plaintiff, on behalf of itself and the Settlement Class, has agreed to settle the Action in exchange for a settlement payment of $20,000,000 in cash to be deposited into an escrow account.  The Net Settlement Fund less (a) any Taxes, (b) any Notice and Administration Costs, (c) any Litigation Expenses awarded by the Court, and (d) any attorneys' fees awarded by the Court will be distributed in accordance with a plan of allocation that is approved by the Court, which will determine how the Net Settlement Fund shall be allocated among members of the Settlement Class.

Based on Lead Plaintiff'’s damages expert’s estimate of the number of shares of Roadrunner common stock purchased during the Settlement Class Period that may have been affected by the conduct at issue in the Action, and assuming that all Settlement Class Members elect to participate in the Settlement, the estimated average recovery per damaged share is $0.45.  Settlement Class Members should note, however, that the foregoing average recovery per share is only an estimate.  Some Settlement Class Members may recover more or less than this estimated amount depending on, among other factors, when, and at what, prices they purchased/acquired or sold their Roadrunner common stock, and the total number of, and recognized loss amount on valid claims submitted.  The recovery by a Settlement Class Member who timely and properly files a Proof of Claim will be a portion of the Net Settlement Fund, determined by comparing his, her, or its “Recognized Loss” to the total Recognized Losses of all Settlement Class Members who timely submit valid Proofs of Claim. An individual Settlement Class Member’s actual recovery will depend on, for example: (a) the total amount of Recognized Losses of other Settlement Class Members; (b) how many shares of Roadrunner common stock you purchased or acquired during the Settlement Class Period; (c) the purchase price(s) paid; (d) the date of the purchase(s); and (e) whether and when you sold your shares.  Distributions to Settlement Class Members will be made based on the Plan of Allocation or such other plan of allocation as may be ordered by the Court.

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3.

How do I know if I am a part of the Settlement?

Answer:

The Court has certified this case as a class action for settlement purposes only.  The Settlement Class is defined as:

All Persons who purchased or otherwise acquired Roadrunner’s publicly traded common stock on the open market between March 14, 2013 and January 30, 2018, inclusive.

Excluded from the Class are Defendants, any entity in which any Defendant has or had a controlling interest, Roadrunner’s and/or HCI’s current or former employees, officers, directors, parents, subsidiaries, divisions, affiliates, managers, general or limited partners, control persons or entities, the immediate family members of defendants DiBlasi, Armbruster, or Rued, any trust of which DiBlasi, Armbruster, or Rued is settlor or which is for the benefit of a member of their immediate family, and the legal representatives, heirs, successors, or assigns of any such excluded person or entity.  

If you are still not sure whether you are included in the Settlement Class, you can visit other sections of the Settlement Website, www.roadrunnersettlement.com, you may write to the Claims Administrator at:

Roadrunner Transportation Systems, Inc. Securities Litigation

P.O. Box 58549

Philadelphia, PA  19102-8549

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4.

How do I ask to be excluded, and what does it mean if I exclude myself from the settlement?

Answer:

If you do not want a payment from this Settlement, but you want to keep any right you may have to sue or continue to sue Defendants and the other Released Defendant Parties on your own concerning the Released Claims, then you must take steps to remove yourself from the Settlement Class. This is called excluding yourself or “opting out.” Please note: if you decide to exclude yourself, there is a risk that any lawsuit you may thereafter file to pursue claims alleged in the Action may be dismissed, including if such suit is not filed within the applicable time periods required for filing suit.  Also, Roadrunner may terminate the Settlement if Settlement Class Members who purchased in excess of a certain amount of Roadrunner’s publicly traded common stock opt out from the Settlement Class.

To exclude yourself from the Settlement Class, you must mail a signed letter stating that you “wish to be excluded from the Settlement Class in In re Roadrunner Transportation Systems, Inc. Securities Litigation, Case No.: 17-cv-144.”  You cannot exclude yourself by telephone or e-mail.  Your letter must state the number of shares of Roadrunner publicly traded common stock that you owned as of the beginning of trading on March 14, 2013, and the date(s), price(s), and number(s) of shares of all your purchases, acquisitions, and sales of Roadrunner publicly traded common stock during the Settlement Class Period. Your letter must include your name, mailing address, telephone number, e-mail address, signature, and documentation (such as brokerage statements) reflecting your reported trading of Roadrunner publicly traded common stock. You must submit your exclusion request so that it is received no later than September 3, 2019 to:

Roadrunner Transportation Systems, Inc. Securities Litigation

P.O. Box 58549

Philadelphia, PA  19102-8549

 

Your exclusion request must comply with these requirements to be valid.  If you ask to be excluded, you will not receive any settlement payment, and you cannot object to the Settlement.  Moreover, if you submit a valid exclusion request, you will not be legally bound by anything that happens in connection with this Settlement, and you may be able to sue (or continue to sue) Defendants and the other Released Defendant Parties in the future.

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5.

How do I object to the Settlement?

Answer:

If you are a Settlement Class Member, you can ask the Court to deny approval by filing an objection. You can’t ask the Court to order a larger settlement; the Court can only approve or deny the settlement. If the Court denies approval, no settlement payments will be sent out and the lawsuit will continue. If that is what you want to happen, you must object.

If you want to object to the proposed settlement you must do so in writing.  Written objections must include your name, address, telephone number, e-mail address, and signature; identify the date(s), price(s), and number(s) of shares of all purchases, acquisitions, and sales of Roadrunner publicly traded common stock during the Settlement Class Period; identify the number of shares of Roadrunner publicly traded common stock held at the close of trading on March 13, 2013; and state the reasons why you object to the Settlement and which part(s) of the Settlement you object to.  You must supply documentation, such as brokerage statements, showing your reported trading in Roadrunner publicly traded common stock.  Unless otherwise ordered by the Court, any Settlement Class Member who does not object in the manner described herein will be deemed to have waived any objection and shall be forever foreclosed from making any objection to the proposed Settlement and the Fee and Expense Application.

All written objections and supporting papers must be filed on or before September 3, 2019 and must (a) clearly identify the case name and number In re Roadrunner Transportation Systems, Inc. Securities Litigation, Case No.: 17-cv-144 (E.D. Wis.); (b) be submitted to the Court either by mailing them to the Class Action Clerk, United States District Court for the Eastern District of Wisconsin, Milwaukee Division, United States Courthouse, 517 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, or by filing them in person at any location of the United States District Court for the Eastern District of Wisconsin; and (c) be submitted to counsel for Lead Plaintiff and Defendants, as follows:

 

Lead Plaintiffs:

                                                                                         

STEPHEN R. BASSER and SAMUEL M. WARD

BARRACK, RODOS & BACINE

One America Plaza

600 West Broadway, Suite 900

San Diego, CA 92101

Telephone: (619) 230-0800

Facsimile: (619) 230-1874

 

or

 

JEFFREY A. BARRACK

3300 Two Commerce Square

2001 Market Street

Philadelphia, PA 19103

Telephone: (215) 963-06800

Facsimile: (215) 963-0838

 

 

Defendants:                                                                                                 

ROBERT A. HOROWITZ

GREENBERG TRAURIG

MetLife Building

200 Park Avenue

New York, NY 10166

Telephone: (212) 801-9200

Email:  horowitzr@gtlaw.com

 

-and-

 

MICHAEL W. LIEBERMAN

CROWELL & MORING, LLP

1001 Pennsylvania Ave., NW

Washington, DC  20004

Telephone: (202) 624-2776

Facsimile: (202) 628-5116

MLieberman@crowell.com

 

-and-

 

JASON J. MENDRO

GIBSON DUNN & CRUTCHER, LLP

1050 Connecticut Avenue, N.W.

Washington, D.C. 20036-5306

Telephone: (202) 955-8500

Email: JMendro@gibsondunn.com

 

-and-

 

ANDREW R. DEVOOGHT

LOEB & LOEB LLP

321 North Clark Street, Suite 2300

Chicago Illinois 60654

Telephone: (312) 464-3100

Fax: (312) 464-3111

adevooght@loeb.com

 

-and-

 

DOUGLAS BAUMSTEIN

WHITE & CASE LLP

1221 Avenue of the Americas

New York, New York 10020-1095

Telephone: (212) 819-8586

dbaumstein@whitecase.com 

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6.

What is the difference between objecting and excluding yourself from the Settlement?

Answer:

Objecting is telling the Court that you do not like something about the proposed Settlement, Plan of Allocation, or Fee and Expense Application.  You can still receive a payment from the Settlement if you timely file a valid claim.  You can object only if you stay in the Settlement Class.

Excluding yourself is telling the Court that you do not want to be part of the Settlement Class.  If you exclude yourself, you have no basis to object because the Settlement no longer affects you.

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7.

Do I have a lawyer in the case, and how will the lawyers be paid?

Answer:

The Court ordered the law firm of Barrack, Rodos & Bacine to serve as "Lead Counsel" to represent all Settlement Class Members and, together with Cross Law Firm, S.C. and Gadow Tyler, PLLC, serve as Class Counsel. You will not be separately charged for any of these lawyers.  The Court will determine the amount of Class Counsel’s fees and expenses, which will be paid from the Settlement Fund. If you want to be represented by your own lawyer, you may hire one at your own expense.

Class Counsel have not received any payment for their services in pursuing claims against the Defendants on behalf of the Class, nor have Class Counsel been reimbursed for their out-of-pocket expenses.  Before final approval of the Settlement, Class Counsel will apply to the Court for any award of attorneys' fees for all Plaintiffs' Counsel in an amount not to exceed 17% of the Settlement Fund.  At the same time, Class Counsel also intend to apply for reimbursement of litigation expenses in an amount not to exceed $295,000, which may include an application for reimbursement of the reasonable costs and expenses incurred by Class Representatives directly related to their representation of the Class.  The Court will determine the amount of any award of attorneys' fees or reimbursement of litigation expenses.  Such sums as may be approved by the Court will be paid from the Settlement Funds.  Class Members are not personally liable for any such fees or expenses. 



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8.

When and where will the Court hold a Hearing on the fairness of the Settlement and what are my options for attending or speaking at the Hearing?

Answer:

The Court will hold the Settlement Hearing on September 23, 2019 at 11:00 a.m. in Courtroom 390 of the United States Courthouse, 517 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202.

At this hearing, the Court will consider (i) whether the Settlement; (ii) the proposed Plan of Allocation; and (iii) Lead Counsel's application for an award of attorneys’ fees and payment of litigation expenses ("Fee and Expense Application") is fair, reasonable, and adequate and should be finally approved.   The Court will take into consideration any written objections filed in accordance with the instructions, which must include your name, address, telephone number, e-mail address, and signature; identify the date(s), price(s), and number(s) of shares of all purchases, acquisitions, and sales of Roadrunner publicly traded common stock during the Settlement Class Period; identify the number of shares of Roadrunner publicly traded common stock held at the close of trading on March 13, 2013; and state the reasons why you object to the Settlement and which part(s) of the Settlement you object to.  You must supply documentation, such as brokerage statements, showing your reported trading in Roadrunner publicly traded common stock.  Unless otherwise ordered by the Court, any Settlement Class Member who does not object in the manner described herein will be deemed to have waived any objection and shall be forever foreclosed from making any objection to the proposed Settlement and the Fee and Expense Application.

You should be aware that the Court may change the date and time of the Settlement Hearing without another notice being sent to Settlement Class Members.  If you want to attend the hearing, you should check with Lead Counsel beforehand, or the Settlement website www.roadrunnersettlement.com to be sure that the date and/or time has not changed.

If you object to the Settlement, you may ask the Court for permission to speak at the Settlement Hearing.  To do so, you must include with your objection a statement that it is your intention to appear in "In re Roadrunner Transportation Systems, Inc. Securities Litigation, Case No.: 17-cv-144 (E.D. Wis.)."  Persons who intend to object to the Settlement, and/or the Plan of Allocation, and/or the Fee and Expense Application, in whole or in part, and desire to present evidence at the Settlement Hearing, must also include with their objections, the identity of any witness they may wish to call to testify and any exhibits they intend to introduce into evidence at the Settlement Hearing.  You may not speak at the Settlement Hearing if you excluded yourself from the Settlement Class, or if you have not provided written notice of your objection and intention to speak at the Settlement Hearing.


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9.

What happens if I do nothing at all, and where can I get more information?

Answer:

          If you do nothing and you are a member of the Settlement Class, you will receive no money from this Settlement and you will be precluded from starting a lawsuit, continuing with a lawsuit, or being part of any other lawsuit against Defendants and the other Released Defendant Parties concerning the Released Claims.  The notice summarizes the proposed settlement.  For the precise terms and conditions of the settlement, please see the Stipulation and Agreement of Settlement available at www.roadrunnersettlement.com, by writing to the Claims Administrator at Roadrunner Transportation Systems, Inc. Securities Litigation, P.O. Box  58549, Philadelphia, Pennsylvania 19102-8549; by contacting Lead Counsel at Barrack, Rodos & Bacine, 600 West Broadway, Suite 900, San Diego, California 92101, by accessing the Court docket in this case through the Court's Public Access to Court Electronic Records (PACER) system at https://ecf.wied.uscourts.gov; or by visiting the office of the Clerk of the Court for the United States District Court for the Eastern District of Wisconsin, Milwaukee Division, 517 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202, on weekdays (other than court holidays) between 10:00 a.m. and 4:00 p.m. 

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This website is authorized by the Court, supervised by counsel and controlled by, the Claims Administrator approved by the Court. This is the only authorized website for this case.

For more information please call 1-888-665-1124

Documents

Please read for a full explanation of the settlement and your options and all applicable timelines.

Contact

Contact us with any inquiries, comments, and/or requests.

Important Dates

  • Exclusion Deadline.

    Tuesday, September 3, 2019 You must complete and mail your request for exclusion form so that it is received no later than September 3, 2019.
  • Objection Deadline.

    Tuesday, September 3, 2019 All written objections and supporting papers must be filed on or before September 3, 2019.  
  • Notice of Intention to Appear.

    Tuesday, September 3, 2019 If you object to the Settlement, you may ask the Court for permission to speak at the Settlement Hearing.  To do so, you must include with your objection(s) your notice of intent to appear at the Final Approval Hearing so that it is be filed on or before September 3, 2019.
  • Settlement Hearing Date.

    Monday, September 23, 2019 The Settlement Hearing is scheduled for September 23, 2019 at 11:00 a.m. (Central). Please check this website for updates.
  • Claim Form Deadline.

    Thursday, November 7, 2019 You must submit your Claim Form no later than Tuesday, November 7, 2019, or mail your completed paper Claim Form so that it is postmarked no later than November 7, 2019.

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