In re Commvault Systems, Inc. Securities Litigation
|Court:||U.S. District Court, District of New Jersey|
|Class Period:||5/7/2013 - 4/24/2014|
|Case Contacts:||James A. Harrod, Rebecca E. Boon|
This is a class action alleging violations of federal securities law brought on behalf of persons and entities who purchased or otherwise acquired shares of the publicly traded common stock of Commvault Systems, Inc. during the period beginning on May 7, 2013 through and including April 24, 2014 (the “Class Period”).
Lead Plaintiff Has Reach a Proposed Settlement for $12.5 Million
The Court-appointed Lead Plaintiff, Arkansas Teacher Retirement System, has reached a proposed settlement of this action for $12,500,000 in cash that, if approved by the Court, will resolve all claims in the action.
If you are a member of the Settlement Class, your rights will be affected and you may be eligible for a payment from the settlement. The Settlement Class consists of:
all persons or entities that purchased or otherwise acquired shares of the publicly traded common stock of Commvault during the period beginning on May 7, 2013 through and including April 24, 2014, and were allegedly damaged by those purchases or acquisitions and any corrective disclosures, except for certain persons and entities who are excluded from the Settlement Class by definition (see, paragraph 28 of the Notice) or who request exclusion pursuant to the instructions set forth in the Notice.
Please read the Notice to fully understand your rights and options. Copies of the Notice and Claim Form can be found on the Case Documents page. You may also visit the Settlement website, www.CommvaultSecuritiesLitigation.com, for more information about the Settlement.
If you are a member of the Settlement Class, in order to be potentially eligible to receive a payment under the proposed Settlement, you must submit a Claim Form postmarked no later than June 20, 2018. Payments to eligible claimants will be made only if the Court approves the settlement and a plan of allocation, and only after any appeals are resolved, and after the completion of all claims processing. Please be patient, as this process will take some time to complete.
IMPORTANT DATES AND DEADLINES
June 20, 2018
Claim Filing Deadline. Claim Forms must be postmarked no later than June 20, 2018 to be eligible for a payment from the Settlement.
April 23, 2018
Exclusion Deadline. To exclude yourself from the Settlement Class, you must submit a written request for exclusion so that it is received no later than April 23, 2018, in accordance with the instructions in the Notice.
April 23, 2018
Objection Deadline. Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses, must be received no later than April 23, 2018, in accordance with the instructions in the Notice.
May 14, 2018
Settlement Hearing. The Settlement Hearing will be held on May 14, 2018 at 11:00 a.m., before the Honorable Peter G. Sheridan at the United States District Court for the District of New Jersey, Courtroom 4E of the Clarkson S. Fisher Building & U.S. Courthouse, 402 East State Street, Trenton, NJ 08608, to determine, among other things, whether the proposed Settlement is fair, reasonable and adequate and should be approved; whether the proposed Plan of Allocation is fair and reasonable and should be approved; and whether Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of expenses should be approved.
Background and Litigation History
Commvault is a software company whose stock trades on the NASDAQ stock exchange under the ticker symbol “CVLT.”
On September 10, 2014, BLB&G filed a class action complaint in the United States District Court for the District of New Jersey (the “Court”), alleging violations of federal securities laws against Commvault and N. Robert Hammer, Commvault’s Chairman, President, and Chief Executive Officer, and Brian Carolan, Commvault’s Vice President and Chief Financial Officer (the “Individual Defendants”).
By Order dated January 12, 2015, the Court appointed Arkansas Teacher Retirement System as Lead Plaintiff for the Action and approved Lead Plaintiff’s selection of BLB&G as Lead Counsel for the class.
On March 19, 2015, Lead Plaintiff filed and served its Amended Class Action Complaint (the “Amended Complaint”) asserting claims against all Defendants under Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder, and against the Individual Defendants under Section 20(a) of the Exchange Act. Among other things, the Amended Complaint alleged that Defendants made materially false and misleading statements about Commvault’s business and financial results, including improperly deferring software revenue in order to conceal the financial impact of the loss of its largest business partner, Dell, Inc. The Amended Complaint further alleged that the price of Commvault common stock was artificially inflated as a result of Defendants’ allegedly false and misleading statements, and declined when the truth was revealed.
On May 26, 2015, Defendants served a motion to dismiss the Amended Complaint. On July 1, 2015, Lead Plaintiff served its memorandum of law in opposition to this motion and, on August 24, 2015, Defendants served their reply papers.
On October 30, 2015, the Court issued its decision from the bench granting Defendants’ motion to dismiss the Amended Complaint, with leave to amend, because the Amended Complaint did not adequately allege that Commvault’s alleged deferral of revenues violated Generally Accepted Accounting Principles. On December 17, 2015, the Court entered an order reflecting that decision, granting Defendants’ motion to dismiss and providing Lead Plaintiff leave to amend the complaint within 30 days.
On February 5, 2016, Lead Plaintiff filed and served the Second Amended Class Action Complaint (the “Second Amended Complaint” or “Complaint”). The Complaint, like the Amended Complaint, asserted claims against all Defendants under Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and against the Individual Defendants under Section 20(a) of the Exchange Act. The Complaint alleged claims substantially similar to those alleged in the Amended Complaint, including allegations that Defendants intentionally deferred recognition of Commvault revenues in order to conceal the financial impact of the loss of its largest business partner, Dell, Inc., in violation of Generally Accepted Accounting Principles. The Complaint appended declarations from two experts concerning the alleged accounting violations.
On April 5, 2016, Defendants filed and served a motion to dismiss the Second Amended Complaint and a motion to strike the expert declarations that had been attached as exhibits to the Second Amended Complaint. Lead Plaintiff filed and served its papers in opposition to those motions on June 6, 2016, and Defendants filed and served their reply papers on July 21, 2016. Oral argument on the motions was held on August 16, 2016. On September 30, 2016, the Court entered a Memorandum and Order denying the motions. On October 28, 2016, Defendants filed and served their Answer to the Complaint.
Discovery in the Action commenced in November 2016. Defendants and third parties produced more than 1.8 million pages of documents to Lead Plaintiff. Lead Plaintiff produced over 32,000 pages of documents to Defendants, and Defendants deposed a representative of Lead Plaintiff. The parties also served and responded to interrogatories and exchanged numerous letters concerning discovery issues.
On May 12, 2017 Lead Plaintiff filed its motion for class certification, which was accompanied by a report from Lead Plaintiff’s expert on market efficiency and common damages methodologies.
The Court ordered the Parties to appear at a settlement conference before Magistrate Judge Lois H. Goodman on May 17, 2017. Prior to that conference, Lead Plaintiff provided Defendants with an initial settlement demand and the Parties provided mediation statements to the Court. Following that conference, the Parties agreed to engage in private mediation in an attempt to resolve the Action.
On June 13, 2017, the Court appointed Robert A. Meyer, Esq. of JAMS to act as mediator in the case and stayed all proceedings in the Action pending the outcome of the mediation. On August 18, 2017, Lead Counsel and Defendants’ Counsel participated in a mediation session before Mr. Meyer. In advance of that session, the Parties exchanged detailed mediation statements, which addressed the issues of liability, damages, and class certification. The session ended without any agreement being reached.
A second mediation session before Mr. Meyer was held on September 11, 2017. Following that mediation, the Parties reached an agreement in principle to settle the Action that was memorialized in a term sheet (the “Term Sheet”) executed on October 2, 2017. The Term Sheet set forth, among other things, the Parties’ agreement to settle and release all claims asserted against Defendants in the Action in return for a cash payment of $12,500,000 for the benefit of the Settlement Class.
On November 30, 2017, the Parties entered into a Stipulation and Agreement of Settlement, which sets forth the full terms and conditions of the Settlement. On January 22, 2018, the Court preliminarily approved the Settlement, authorized notice to be disseminated to potential Settlement Class Members, and scheduled the Settlement Hearing to consider whether to grant final approval to the Settlement for May 14, 2018.
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