This Notice contains information regarding the dismissal of a putative class action concerning the acquisition of WCI Communities, Inc., and an agreement to pay attorneys’ fees and expenses to counsel for Plaintiff in that action.
The purpose of this notice is to inform former stockholders of WCI Communities, Inc. (“WCI”) about developments with respect to the litigation in the Delaware Court of Chancery styled Bushansky v. WCI Communities, Inc., et al., C.A. No. 12947-CB (the “Delaware Action”).
On November 10, 2016, Lennar Corporation (“Lennar”) filed a Registration Statement (the “Registration Statement”) with the United States Securities and Exchange Commission (“SEC”) in connection with the proposed acquisition of WCI by Lennar pursuant to a definitive agreement and plan of merger filed with the SEC on September 22, 2016 (the “Transaction”).
On November 29, 2016, a purported WCI stockholder (“Plaintiff”) commenced the Delaware Action by filing a Verified Class Action Complaint (the “Complaint”) in the Delaware Court of Chancery, alleging that WCI’s Board of Directors breached its fiduciary duties in connection with the Transaction, that WCI and Lennar aided and abetted those alleged breaches, and that the disclosures in the Registration Statement were deficient. A purported WCI stockholder also filed an action in the United States District Court for the Middle District of Florida styled Parshall v. WCI Communities, Inc., et al., No. 16-846 (the “Federal Action”) on November 23, 2016, alleging, among other things, that the Registration Statement omitted material information. Defendants denied any wrongdoing and any liability to plaintiffs in both the Delaware Action and the Federal Action.
On December 13, 2016, Lennar filed Amendment No. 1 to the Registration Statement on Form S-4/A with the SEC containing certain supplemental disclosures (the “Supplemental Disclosures”), which Plaintiff believes mooted the claims raised in the Delaware Action regarding the sufficiency of the disclosures in the Registration Statement.
On February 10, 2017, WCI stockholders voted to approve the Transaction, which closed on February 10, 2017.
On March 22, 2017, the Federal Action was voluntarily dismissed without prejudice.
On May 8, 2017, the Delaware Court of Chancery entered a Stipulated Order dismissing the Delaware Action with prejudice as to Plaintiff, and without prejudice as to any other members of the putative class, and retaining jurisdiction solely for the purpose of determining Plaintiff’s counsel’s anticipated application for an award of attorneys’ fees and reimbursement of expenses based upon the alleged benefits provided by the Supplemental Disclosures (the “Fee and Expense Application”).
After negotiations, WCI and the plaintiffs have agreed to resolve the Fee and Expense Application and an anticipated fee and expense application in the Federal Action with a payment by WCI of $100,000 to counsel for plaintiffs in the Delaware Action and the Federal Action in attorneys’ fees (inclusive of expenses). The Delaware Court of Chancery has not been asked to review, and will pass no judgment on, this payment of fees and expenses or its reasonableness.
Attorneys for Plaintiff and WCI may be contacted at the following addresses:
Richard A. Acocelli
1500 Broadway, 16th Floor
New York, NY 10036
Attorney for Plaintiff
GOODWIN PROCTER LLP
Deborah S. Birnbach
100 Northern Avenue
Boston, MA 02210
Attorney for Defendant WCI Communities, Inc.