Mudge to hear pleas for initial approval of '02 class action settlement
Madison County Circuit Judge William Mudge is set to hear arguments Friday in favor of the settlement of a nine year-old class action against CyberSource Corporation.
Lead plaintiff Brian Wilgus and CyberSource moved for the approval of their settlement, worth $575,000.
The hearing is set for 9 a.m.
The class includes 69 former employees of PaylinX Corporation who had stock option rights under a 2000 stock option plan at the time CyberSource acquired Paylin X.
The class alleges that CyberSource breached the terms of the 2000 Paylin X plan and prevented the class members from asserting their rights to purchase additional stock shares and to establish timely E-Trade accounts after the merger.
The class was certified in 2004.
While CyberSource had won summary judgment in the case in January 2008, the Fifth District Appellate Court reversed former Madison County Circuit Judge Daniel Stack's decision in August 2009.
The parties then reached the current settlement in March of this year.
According to the proposed settlement agreement, the defendant will pay a total of
$575,000 plus interest earned while the funds are held in escrow.
The settlement will be allocated, minus attorney's fees and the incentive fee to Wilgus, based upon each class members' share of the total potential damages.
That share will be calculated by finding the difference between the $10.75 value of
CyberSource's stock on Sept. 18, 2000 and the class member's outstanding options and then dividing it by the total sum of all the class members' potential damages. That sum will then be multiplied by the net settlement proceeds to determine what each class member gets.
The settlement does not spell out what amounts Wilgus or the class counsel, Korein Tillery LLC, will receive.
CyberSource does not admit fault under the settlement.
The settlement suggests that the defendant will not object if the court finds that class counsel's fees total up to 29 percent of the aggregate settlement fund.
Two class members have opted out of the class.
John Libra, of Korein Tillery's Chicago office, is lead counsel for the class and Wilgus. Howard Becker, the plaintiff's former attorney, withdrew March 22.
Alan Goldstein represents the defense.
The case is Madison case number 02-L-995.