Hi-Crush Partners LP

Hi-Crush Partners LP

Hi-Crush Partners LP Securities Settlement

The lawsuit was settled for $3.8 million in cash. The following is a summary of the proceedings in this lawsuit: ‘Hi-Crush Partners, L.P. (Hi-Crush or the Partnership), conducted its initial public offering (IPO) in August 2012. In connection with the IPO, Hi-Crush filed a final prospectus with the United States Securities and Exchange Commission (SEC) that became effective on August 16, 2012. Hi-Crush completed its IPO on August 21, 2012. On November 13, 2012, Hi-Crush issued a press release, stating, among other things that: (1) on September 19, 2012, one of its customers provided notice that it was terminating its long-term supply agreement with Hi-Crush; (2) on November 12, 2012, Hi-Crush exercised its contractual right to terminate the customer supply agreement and sued that customer for breach of contract in Texas state court, seeking the contractually provided for liquidated damages. Between November 21, 2012 and December 18, 2012, plaintiffs Shirley Horn, Douglas Goodhart, Leona Sesholtz, Alexander W. Thiele, and Peter A. Luebke filed four separate putative class action lawsuits against Hi-Crush, its general partner, certain of its officers and directors, and the underwriters of Hi-Crush IPO: Horn v. Hi-Crush Partners, L.P., et al., 12-CV-8557 (the Horn Action); Goodhart v. Hi-Crush Partners, L.P., et al., 12-CV-8574 (S.D.N.Y.) (the Goodhart Action); Sesholtz, at al. v. Hi-Crush Partners, L.P., et al., 12-CV-8610 (S.D.N.Y.) (the Sesholtz Action); and Luebke v. Hi-Crush Partners, L.P., et al., 12-CV-9212 (S.D.N.Y.) (the Luebke Action). These lawsuits alleged violations of Sections 11, 12 and 15 of the Securities Act of 1933 (the Securities Act) in connection with Hi-Crush IPO and announcement on November 13, 2012. Pursuant to the PSLRA (15 USC § 78u-4(a)(3)(B)), several members of the putative class moved for the appointment as lead plaintiff on or before January 22, 2013. Plaintiffs in the Goodhart Action and Sesholtz Action voluntarily dismissed their lawsuits on December 10, 2012 and February 7, 2013, respectively. By an order dated February 11, 2013, (the Order) the District Court consolidated the Horn Action and Luebke Action under the caption In re Hi-Crush Partners, L.P. Securities Litigation, 12 Civ. 8557 (the Consolidated Action). In the Order, the District Court appointed HITE Hedge LP and HITE MLP LP (collectively, Plaintiffs or HITE) as the Lead Plaintiffs and Kirby McInerney LLP as lead counsel for the putative class in the Consolidated Action. On February 15, 2013, Plaintiffs filed a consolidated amended complaint (the Consolidated Complaint). The Consolidated Complaint alleged violations of Sections 11, 12 and 15 of the Securities Act, and violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the Exchange Act) and Rule 10b-5 promulgated under Section 10(b). On March 22, 2013, all of the named defendants moved to dismiss the Consolidated Action. On April 12, 2013, Plaintiffs filed their Opposition to the defendants motions to dismiss the Consolidated Action. Defendants filed replies in support of their motions to dismiss on April 19, 2013. On December 2, 2013, the District Court issued a Decision and Order Granting in Part and Denying in Part Defendants Motions to Dismiss (Decision and Order). The Decision and Order dismissed the claims asserted under Sections 11, 12 and 15 of the Securities Act, but denied dismissal as to the claims asserted under Sections 10(b) and 20(a) of the Exchange Act and SEC Rule 10b-5. As a result of the Decision and Order, certain defendants, which included the named underwriter defendants and certain of the individual defendants, were dismissed from the Consolidated Action. On January 13, 2014, the remaining defendants, Hi-Crush, Hi-Crush GP LLC (Hi-Crush GP), Robert E. Rasmus, James M. Whipkey, Laura C. Fulton, and Jefferies V. Alston, III (collectively, Defendants), filed their answer to the Amended Complaint denying the allegations therein. From February to May 2014, the parties engaged in discovery that included the production and exchange of documents, the taking and defense of deposition testimony, and exchange of written discovery. On April 15, 2014, Plaintiffs filed a Motion for Class Certification and Appointment of Class Representative and Class Counsel (Class Certification Motion). On May 15, 2014, Defendants filed their Opposition to Plaintiffs Class Certification Motion and Plaintiffs filed their reply on June 17, 2014. On June 25, 2014, the Settling Parties participated in mediated settlement negotiations before Robert A. Meyer, Esq. of Loeb & Loeb, LLP (the Mediator). With the Mediator assistance, the Settling Parties reached an agreement in principle to settle the Consolidated Action, for $3,800,000, to be paid for the benefit of the Settlement Class.’

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