iParty Corp
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iParty Corp Securities Settlement
The lawsuit was settled for additional disclosures in the proxy statement mailed to shareholders. The following is a summary of the proceedings in this lawsuit: ‘On March 1, 2013, iParty and Party City Holdings Inc. (‘Party City’) announced that they had entered into a definitive merger agreement (‘Merger Agreement’) pursuant to which Party City, through its direct wholly-owned subsidiary, Confetti Merger Sub, Inc. (‘Merger Sub’), would acquire, pursuant to a merger, for cash all of the outstanding shares of convertible preferred stock and of common stock of iParty, (‘Merger’), which provided for a payment to the holders of common stock of $0.45 per share (‘Proposed Transaction’). On March 8, 2013, Vincent Sean Halstead (‘Plaintiff’) filed a Class Action Complaint to commence a shareholder class action alleging breaches of fiduciary duties and/or aiding and abetting thereof against Defendants relating to the Proposed Transaction entitled Vincent Sean Halstead, Individually and on behalf of all others similarly situated v. iParty Corp., Sal V. Perisano, Daniel I. DeWolf, Frank W Haydu III, Martin Hernon, Joseph S. Vassalluzzo, Party City Holdings Inc. and Confetti Merger Sub, Inc., Civil Action No. 13- 0842-BLS2 (‘Action’). On March 15, 2013, iParty filed with the United States Securities and Exchange Commission (‘SEC’) a preliminary proxy statement (‘Preliminary Proxy’) concerning the terms of the Merger Agreement, the events leading up to the execution of the Merger Agreement, and the valuation analyses conducted by Raymond James & Associates, Inc. (‘Raymond James’), financial advisor to iParty in connection with the Merger Agreement. On April3, 2013, the Defendants in the Action served a motion to dismiss the Class Action Complaint. On April 10, 2013, iParty filed with the SEC a definitive proxy statement (‘Definitive Proxy’) concerning the terms of the Merger Agreement, the events leading up to the execution of the Merger Agreement, and the valuation analyses conducted by Raymond James. On April 11, 2013, Plaintiff filed an Amended Class Action Complaint alleging, among other things, that the directors ofiParty have breached their fiduciary duties to iParty shareholders by failing to maximize shareholder value and by filing a false and misleading proxy statement in connection with the Merger, and that Party City and Merger Sub have aided and abetted those breaches of fiduciary duty. On April 12, 2013, counsel to Plaintiff transmitted a settlement demand to counsel for the Defendants. After arm’s-length negotiations, counsel to the parties in the Action reached an agreement-in-principle concerning the proposed settlement of the Action on the terms and conditions set forth in a Memorandum of Understanding (‘MOU’), entered into on May 1, 2013, which was subject to certain additional discovery to confirm that the proposed settlement is fair, reasonable, adequate, and in the best interests of the Plaintiff. Pursuant to and as the basis for the proposed settlement, iParty agreed to make, and made, amended and supplemental disclosures which were set forth on a Form 8-K filed with the SEC on May 1, 2013. See Exhibit A to the Stipulation. On May 9, 2013, at a special meeting of stockholders, iParty stockholders adopted and approved the Merger Agreement and, pursuant to the terms of the Merger Agreement, the Merger was consummated. On July 9, 2013, counsel for the Defendants produced to Plaintiffs counsel certain agreed-upon documents in confirmatory discovery, including relevant board minutes and the final board presentation made by Raymond James in support of its fairness opinion, and, thereafter, Plaintiffs counsel carefully reviewed the produced documents. On April24, 2014, counsel for the parties appeared for a status conference before the Court. On May 7, 2014, Plaintiff took the confirmatory deposition of Daniel I. DeWolf, who had served as a director ofiParty since 2003. On July 2, 2014, the Court entered a preliminary approval and scheduling order providing for, among other things, the scheduling of the Settlement Hearing (‘Scheduling Order’); the temporary certification, for settlement purposes only, of a class consisting of any and all record and beneficial holders of iParty common stock, their respective successors in interest, successors, predecessors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors and successors and assigns, who held shares of iParty common stock at any time between and including March 1, 2013 and the date of consummation of the Merger, other than (i) Party City, Merger Sub, and their respective subsidiaries, officers, and directors, and (ii) the executive officers and directors of iParty and its subsidiaries (‘Class’).’