Wyche, PA Settlement Information

Welcome to the Spires v. Schools Settlement website. This website is intended to keep class members informed regarding the class action settlement of the case Spires et al. v. Schools et al., No. 2:16-cv-616-RMG (DSC) (the “Action”), a lawsuit that brings claims on behalf of the Piggly Wiggly Carolina Company, Inc. & Greenbax Enterprises, Inc. Employee Stock Ownership Plan and Trust (the “Plan”). While the Court approved the form of the Notice of Proposed Settlement (the “Class Notice”) and ordered that certain documents filed with the Court be posted on this website, the content of this website is the responsibility of Plaintiffs’ counsel, and has not been approved by the Court.

Background

Spires v. Schools is a case brought in the United States District Court for the District of South Carolina under the Employee Retirement Income Security Act, as amended (“ERISA”). On February 26, 2016, Plaintiffs Dana Spires and Glenn Grant, participants in the Plan, filed a putative class action complaint against David R. Schools, William A. Edenfield, Jr., Robert G. Masche, Joseph T. Newton III, Burton R. Schools, Joanne Newton Ayers and Marion Newton Schools (the “Defendants”) alleging violations of ERISA. The complaint was later amended and now names as additional plaintiffs Susan Mohle and Tom Miranda (collectively with Dana Spires and Glenn Grant, the “Named Plaintiffs”).

The Complaint alleges that the Defendants (other than Defendants Joanne Newton Ayers and Marion Newton Schools) were fiduciaries of the Plan and violated fiduciary duties under or otherwise violated ERISA, and that Defendants Joanne Newton Ayers and Marion Newton Schools participated in a transaction that violated ERISA. On behalf of the Plan, the Named Plaintiffs sought to recover from Defendants alleged losses to the Plan caused by Defendants’ alleged misconduct.

After engaging in extensive fact discovery, after various motions and their resolution by the Court, and after an evaluation of the merits and risks of the Action, the Named Plaintiffs together with Plaintiffs’ Counsel and the Defendants together with counsel for the Defendants engaged in substantial arm’s-length negotiations with the assistance of an independent mediator to attempt to resolve all claims that have been or could have been asserted in the Action against the Defendants. As a result of this mediation, the Named Plaintiffs, on behalf of an agreed Settlement Class as defined below, and the Defendants have reached an agreement to settle the Action (the “Settlement Agreement”).

The Settlement Class

On May 23, 2018, the Honorable Richard M. Gergel entered an Order Preliminarily Approving Settlement, Conditionally Certifying a Settlement Class, Approving Notice Procedures, Preliminarily Approving the Plain of Allocation, and Setting Final Settlement Hearing (the “Order”). The Order conditionally certifies the following class (the “Settlement Class”):

All persons who were vested or non-vested participants in or beneficiaries of the Plan at any time from February 26, 2008 through the present (or their Successors-In-Interest). The “Settlement Class” shall not include any of the Individual Defendants (defined to include all Defendants who are individuals) or their respective Successors-In-Interest.

The Settlement

The Settlement Agreement provides for the establishment of a settlement fund (the “Settlement Fund”), consisting of an Original Cash Amount deposit of $5,200,000 to be paid by or on behalf of the Defendants, plus Additional Cash Amounts (as defined below) to be paid in the future and estimated by the Defendants to range from $2.475 million to $3.45 million in the aggregate, plus interest, to settle the claims against the Defendants.

The Settlement Agreement further provides for a pro rata allocation of these payments (less certain amounts described in the Settlement Agreement, including attorneys’ fees and expenses, any taxes, and other costs related to the administration of the Settlement Fund and implementation of the Plan of Allocation) to the Plan accounts of members of the Settlement Class who had any portion of their Plan accounts invested in Greenbax Enterprises Inc. (“Company”) stock during the period February 26, 2008, through May 23, 2016 (the “Class Period”). The distributions will be made in proportion to any decline in the value of Company stock allocated to Plan accounts of the respective members of the Settlement Class during the Class Period, according to a Plan of Allocation to be approved by the Court (the “Plan of Allocation”).

Disbursement of the Settlement Fund through the Plan to the Settlement Class will occur after the settlement has become Final, which is to say after all appeals relating to the settlement are favorably decided and all appeal periods have run.

The Additional Cash Amounts consist of:

• The net proceeds of the portion of a workers’ compensation insurance surety held by the State of South Carolina that is released to the Company by the State of South Carolina. Defendants’ good faith estimate, based on their understanding of the facts, is that the estimated value of this Additional Cash Amount is $1,500,000 after expenses. It is uncertain at this time precisely when the workers’ compensation insurance surety will be released by the State of South Carolina. However, Defendants and the Company have agreed to use commercially reasonable efforts to cause the State of South Carolina to release the workers’ compensation insurance surety as soon as reasonably practicable.

• A portion of the net proceeds from the sale of real property owned by a wholly-owned subsidiary of A-C Development Club, LLC (“ACDC”) and located at 821 King George Boulevard, Savannah, Georgia (the “Savannah Real Property”). ACDC is a joint venture company whose members are the Company, Dallas Cotton Club, Inc. (“DCC”), and ACDI, LLC. Specifically, this Additional Cash Amount will consist of, in the case of the Company, all amounts distributed to it by ACDC and/or DCC attributable to the proceeds (net of reasonable expenses of ACDC (or its subsidiary) including, but not limited to, sales commissions, recording costs, rent, legal fees, ad valorem tax prorations, and other reasonable expenses) of the sale of the Savannah Real Property; and, in the case of Defendants David R. Schools, William A. Edenfield, Jr., and Robert G. Masche, one-half of the amounts distributed to them by DCC attributable to the proceeds (net of reasonable expenses of ACDC (or its subsidiary) including, but not limited to, sales commissions, recording costs, rent, legal fees, ad valorem tax prorations, and other reasonable expenses) of the sale of the Savannah Real Property. Defendants’ good faith estimate, based on their understanding of the facts, is that the aggregate value of these Additional Cash Amounts after expenses is between $975,000 and $1,950.000. It is uncertain at this time precisely when the Savannah Real Property will be sold. However, the Company and Defendants David R. Schools, William A. Edenfield, Jr., and Robert G. Masche have agreed to cause ACDC to list for sale and sell the Savannah Real Property as soon as commercially reasonable.

Please note that the ranges of value of the Additional Cash Amounts stated above were estimates of the Defendants based on available information, and it is possible that the value of the Additional Cash Amounts could turn out to be less than these estimates.

The above description of the operation of the Settlement is only a summary. The governing provisions are set forth in the Settlement Agreement (including its exhibits).

Released Claims and Fairness Hearing

The Court did not decide who was right: instead, both sets of parties have agreed to the settlement. The settlement will avoid the costs and risks of a trial while ensuring that all Settlement Class members are treated fairly. The Named Plaintiffs and Plaintiffs’ Counsel believe that this settlement is in the best interest of the Settlement Class members. As a result of the settlement, the Settlement Class releases claims against the Defendants relating to the allegations in the Action and as otherwise detailed in the Settlement Agreement.

The Court will hold a Fairness Hearing at 10:00 AM on August 31, 2018, at the U.S. District Court for the District of South Carolina, United States Courthouse, 85 Broad Street, Charleston, SC 29401.

Any member of the Settlement Class who wishes to object to the fairness, reasonableness, or adequacy of the Settlement, to the Plan of Allocation, to any term of the Settlement Agreement, or to the proposed award of attorneys’ fees and expenses may file an objection in writing. The objection must be filed with the Court and served upon Plaintiffs’ counsel such that it is received no later than August 10, 2018. The objection must (i) include a written statement of each objection; (ii) be labeled with the case name and number shown above; (iii) include the objector’s full name, address, and telephone number; (iv) include the full name, address, and telephone number of any attorney(s) representing the objector; and (v) specify the reason(s), if any, for each such objection made, including any legal support and/or evidence (including without limitation, copies of any documents and the names of any witnesses with a summary of their anticipated testimony) that such objector wishes to being to the Court’s attention or introduce in support of such objection.

The addresses for filing objections with the Court and service on Plaintiffs’ Counsel are as follows:

To the Court:

Clerk of the Court
District of South Carolina
United States Courthouse
85 Broad Street
Charleston, SC 29401

Re: Dana Spires et al. v. David R. Schools et al., Case No. 2:16-cn-00616-RMG

To Plaintiffs’ Counsel:

Plaintiffs’ Counsel
c/o John C. Moylan
Wyche, PA
801 Gervais Street, Suite B
Columbia, SC 29201
Fax: (803) 254-6544

Settlement FAQs

Q: How do I know whether I am part of the Settlement Class?

The Court has preliminarily certified the Action as a class action for settlement purposes. You are a member of the Settlement Class if you were a vested or non-vested participant in or beneficiary of the Piggly Wiggly Carolina Company, Inc. & Greenbax Enterprises, Inc. Employee Stock Ownership Plan and Trust at any time from February 26, 2008 through the present (or such person’s Successor-In-Interest). The “Settlement Class” shall not include any of the Individual Defendants (defined to include all Defendants who are individuals) or their respective Successors-In-Interest.

Q: What will be my share of the Settlement Fund?

Plaintiffs’ Counsel has submitted a detailed Plan of Allocation to the Court for approval at or after the Fairness Hearing. The Plan of Allocation describes the manner in which the settlement proceeds (after payment of, and establishment of reserves for, certain amounts as described in the Settlement Agreement, including attorneys’ fees and expenses, any taxes, and other costs related to the administration of the Settlement Fund and implementation of the Plan of Allocation) plus net accrued interest (“Net Settlement Amount”) will be distributed through the Plan to Settlement Class members who are eligible for a distribution.

In general terms, the Plan of Allocation provides that your share, if any, of a Net Settlement Amount will be determined using a methodology that generally takes into account the value of any investments in Company stock in your Plan account at the beginning of the Class Period (or, if later, the first date on which there was an allocation of Company Stock to your Plan account), the value of subsequent Company stock allocated to your Plan account (for instance, as a result of Company contributions), the proceeds of Company stock sales or withdrawals from your account, and the value of Company stock in your Plan account at the end of the Class Period. That methodology will be implemented by the Plan’s third party administrator, based on available records. The Court will be asked to approve the Plan of Allocation at the Fairness Hearing.

Q: How can I get my portion of the recovery?

Members of the Settlement Class do not need to file a claim for recovery in this Action. If you are a Settlement Class member entitled to a share of a Net Settlement Amount and are a current participant in the Plan, your share of the Net Settlement Amount will be deposited in your Plan account. If you are a Settlement Class member entitled to a share of a Net Settlement Amount and are a former participant in the Plan, a Plan account will be established for you, if necessary, and you will be notified of such account.

Q: How will the lawyers be paid?

At the Fairness Hearing, Plaintiffs’ Counsel will apply for an award of attorneys’ fees and expenses. The application for attorneys’ fees will be for one-third of the sum of the Original Cash Amount and the Additional Cash Amounts deposited into the Settlement Fund. Any award of attorneys’ fees and expenses will be paid from the Settlement Fund (or reserved within the Settlement Fund for future payment) to Plaintiffs’ Counsel prior to allocation and payment through the Plan to the Settlement Class members.

To date, Plaintiffs’ Counsel have not received any payment for their services in prosecuting this Action on behalf of the Settlement Class, nor have Plaintiffs’ Counsel been reimbursed for their out-of-pocket expenses. The fee requested by Plaintiffs’ Counsel would compensate all of Plaintiffs’ Counsel for their efforts in achieving the Settlement for the benefit of the Settlement Class and for their risk in undertaking this representation on a contingency basis. The Court will determine the actual amount of the award.

Q: Can I exclude myself from the Settlement?

You do not have the right to exclude yourself from the settlement. For settlement purposes, the Action would be certified under Federal Rule of Civil Procedure 23(b)(1) (non-opt-out class) because the Court determined the requirements of that rule were satisfied. Thus, it is not possible for any of the Settlement Class members to exclude themselves from the Settlement. As a member of the Settlement Class, you will be bound by any judgments or orders that are entered in the Action for all claims that were or could have been asserted in the Action against the Defendants or are otherwise included in the release under the Settlement.

Although members of the Settlement Class cannot opt out of the Settlement, they can object to the Settlement and ask the Court not to approve the Settlement.