Lender Processing Services Inc.
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Lender Processing Services Inc. 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 the lawsuit: ‘On January 21, 2011, Plaintiff Michael Wheatley filed a derivative complaint on behalf of LPS, captioned Wheatley v. Carbiener, et al., Case No. 16-2011-CA-00925-:XXXX:-MA, in the Florida Court (the ‘Wheatley Action’), purporting to assert claims against the Defendants Jeffrey S. Carbiener, Alvin R. Carpenter, John F. Farrell, Jr., Philip G. Heasley, David K. Hunt, James K. Hunt, Lee A. Kennedy and Susan E. Lester (collectively, the ‘Demand Defendants’) and Defendants Francis K. Chan, Todd C. Johnson, Daniel T. Scheubel, Thomas Shilling and Eric D. Swenson (collectively, the ‘Management Defendants’) for, among other things, alleged breaches of fiduciary duty and other alleged wrongdoing relating to the preparation, notarization and filing of documents in conjunction with foreclosure proceedings in courts throughout the United States by LPS, its employees, subsidiaries and agents from 2007 to the present as described in the complaint filed in the Wheatley Action and the other complaints referenced herein (the ‘Derivative Claims’). On February 12, 2013, Hill filed a derivative complaint on behalf ofLPS, captioned Hill v. Kennedy, et al., C.A. No. 8305-CS (the ‘Hill Action’), in the Court of Chancery of the State of Delaware (the ‘Delaware Court’) asserting breach of fiduciary duty claims against the Demand Defendants arising out of the same conduct underlying the Derivative Claims in the Wheatley Action. On May 28, 2013, LPS and Defendant Fidelity National Financial, Inc. (‘FNF’) announced that they had entered into a definitive merger agreement (the ‘Merger Agreement’) pursuant to which FNF would acquire all of the outstanding shares ofLPS common stock for per-share consideration comprising $16.625 in cash and an amount ofFNF stock, which together valued LPS at $33.25 per share (the ‘Merger”). On May 31, 2013, the Plaintiff in the Wheatley Action, joined by Plaintiff Michael Gurule (together, the ‘Florida Derivative Plaintiffs’), filed an amended complaint in the Wheatley Action, which reasserted the Derivative Claims, and asserted purported class action claims challenging the Merger against the Demand Defendants, the Management Defendants, FNF and Defendants Dan R. Carmichael, Hugh R. Harris, John W. Snow and Thomas H. Lee Partners L.P. (‘THL’) (collectively, ‘Defendants’). On May 31, 2013, Plaintiff Orlando Police Pension Fund filed a putative stockholder class action complaint challenging the Merger, captioned Orlando Police Pension Fund v. Kennedy, et al., Case No. 2013-CA-5607, in the Florida Court (the ‘Orlando Police Action’). On June 3, 2013, Pruitt filed a putative stockholder class action complaint challenging the Merger, captioned Pruitt v. Lender Processing Services, Inc., et al., C.A. No. 8622-VCL, in the Delaware Court (the ‘Pruitt Action’). On June 19, 2013, FNF notified LPS that, pursuant to the Merger Agreement, FNF was exercising its right to increase the cash consideration from $16.625 per share of LPS common stock to $22.303 per share of LPS common stock and correspondingly decrease the stock consideration. On August 7, 2013, Hill filed an amended complaint in the Hill Action, which reasserted derivative claims on behalf of LPS arising out of the same conduct underlying the Derivative Claims asserted in the Wheatley Action, and also asserted purported class action claims challenging the Merger. On August 26, 2013, the Florida Court entered an Order providing for, among other things, (i) the consolidation of the Wheatley Action and the Orlando Police Action into the Consolidated Action, (ii) the appointment of the Consolidated Action Plaintiffs as Co-Lead Plaintiffs in the Consolidated Action, and (iii) the appointment of Consolidated Action Plaintiffs’ Counsel as Co-Lead Counsel in the Consolidated Action. On August 29, 2013, FNF filed a Form S-4 Registration Statement (the ‘Form S-4’) with the United States Securities and Exchange Commission (‘SEC’) in connection with the Merger. On September 23, 2013, the Consolidated Action Plaintiffs filed a Second Amended Verified Derivative and Class Action Complaint in the Consolidated Action, which reasserted the Derivative Claims and alleged, among other things, that the members ofLPS’s board of directors breached their fiduciary duties to LPS’s stockholders in agreeing to the Merger, that the Form S-4 was materially incomplete and/or omitted certain information, and that certain Defendants aided and abetted the members of the LPS board of directors in breaching their fiduciary duties (the ‘Merger Claims’). On September 26, 2013, Hill filed a notice of voluntary dismissal of the Hill Action without prejudice and, on September 27, 2013, Pruitt filed a notice of voluntary dismissal of the Pruitt Action without prejudice. From early October 2013 until November 21, 2013, the Consolidated Action Plaintiffs and Defendants engaged in expedited document and deposition discovery, including the depositions of Defendants Harris and Carpenter and the depositions of representatives of both firms that acted as financial advisors to LPS in connection with the Merger. On October 24, 2013, FNF notified LPS that, pursuant to the Merger Agreement, FNF was exercising its right to further increase the cash consideration from $23.303 per share ofLPS common stock to $28.102 per share of LPS common stock and correspondingly decrease the stock consideration, subject to and conditioned upon the consummation of a previously announced public offering by FNF of shares ofFNF common stock. On October 31, 2013, the Consolidated Action Plaintiffs filed a Motion for Preliminary Injunction seeking to enjoin the Merger. On November 26, 2013, the Consolidated Action Plaintiffs filed a brief and other papers in support of their Motion for Preliminary Injunction. On December 9, 2013, Defendants filed memoranda of law in opposition to the Consolidated Action Plaintiffs’ Motion for Preliminary Injunction. The Parties engaged in arm’s-length discussions regarding the Consolidated Action Plaintiffs’ claims in the Consolidated Action. After discussions, the Parties agreed to settle the Merger Claims, but not the Derivative Claims. On December 12, 2013, the Consolidated Action Plaintiffs and Defendants entered into a Memorandum of Understanding (the ‘MOU’) setting forth the Parties’ agreement regarding the terms of the settlement of the Merger Claims. On December 12, 2013, LPS filed a Form 8-K with the SEC making certain additional disclosures concerning the Merger as set forth in the MOU. On December 19, 2013, the LPS stockholders voted to approve the Merger, and the Merger thereafter closed and became effective on January 2, 2014. After entering into the MOU and after the Merger closed and became effective, the Parties re-engaged in arm’s-length discussions regarding a potential settlement of the Derivative Claims. After discussions, the Parties reached agreement on the terms of a settlement of the Derivative Claims.’