RTI Settlement Checks Have Been Processed

RTI settlement proceed distribution checks are being sent out.  If you filed a valid and timely Proof of Claim, you should be receiving your check either in the mail or by federal express in the next few days.

There are three items which we want to bring to your attention.  First, you should cash the check promptly as uncashed checks may result in a redistribution of that money to either other class members or a charity. 

Second, with respect to RTI common shareholders, we elected to withhold certain monies from immediate distribution because of issues which were belatedly raised and which appear to require guidance from the Court.  Assuming we get that guidance in the coming weeks, there may well be a second, much smaller distribution of monies to RTI common shareholders.  Please be aware that the vast majority of monies to which RTI common shareholders who filed valid and timely Proofs of Claim are entitled are being distributed at this time.  The issue does not effect either RTI preferred shareholders or RTI option holders. 

Third, there are tax consequences to this distribution and you should consult with your tax advisor.  Since each individual’s circumstance with respect to their investment in RTI is different, we are not in a position to provide tax advice.

THE RTI SALE

As you may know, RTI recently announced a sale to EQT Infrastructure.  Information about the sale is in the press releases as well as in a detailed communication recently sent to current RTI Shareholders.  See below.

              Link to EQT press release

              Link to RTI press release

    Notice of Action Taken by Written Consent of the Stockholders in Lieu of a Meeting

RTI SETTLEMENT AND DISTRIBUTION

Many Class members have now approached Class Counsel or the Class Representatives asking about the impact of the RTI sale on the settlement and the timetable for distribution of settlement proceeds.  In order to calculate the per share/per option amount, one can refer to the Notice of Proposed Settlement of Class Action and Hearing Regarding Settlement (“Notice”), the Memorandum in Support of Plaintiffs’ Motion for Reimbursement of Expenses, Award to Plaintiffs and Award of Attorneys’ Fees and the Final Judgment and Order Approving Reimbursement of Expenses, Award to Class Representatives, Award of Attorneys’ Fees and Distribution (“Order”).  All of these documents are provided on this website.  These documents create the framework to conduct the calculation. 

The Per Share/Per Option Calculation

The below calculation continues to be an estimate.  It reflects our current analysis, but it is subject to change. 

Assuming the sale closes at the $270 million acquisition price, the total settlement proceeds to the Class are expected to be $12,522,571.  After taking into account attorneys’ fees, expenses paid, expenses not yet paid (approximately $22,000), award payments to the Class Representatives, incentive payments to the individuals who contributed funds to support the litigation and a $20,000 holdback for anticipated expenses, the total amount to be distributed to members of the Class who submitted valid Proofs of Claim is expected to be $8,881,730.  Of that amount, $700,000 will be segregated out and paid to option holders.  That means that $8,181,729 (“Net Amount”) would be distributed to RTI preferred and common shareholders.

While the Class was defined to include common shareholders, preferred shareholders and option holders (subject to certain exclusions), in order to participate in the distribution of monies, Class members were required to file a Proof of Claim Form.  A mailing of the Notice and Proof of Claim took place in October 2010 and, as a result of the mailing, valid Proofs of Claim were submitted representing the following number of shares and options:

              Common shares              1,187,068
              Preferred shares                334,455
              Options                             246,651

In accordance with the Notice, as well as the Order, 26.5% of the Net Amount is to go to preferred shareholders who filed valid and timely Proofs of Claim while 73.5% of the Net Amount was allocated to those holding common shares at the time of the 2009 recapitalization.

Given the number of shares represented by valid Proofs of Claim and the Net Amount to be distributed, the amounts on a per share basis can be calculated as follows: 

Common Shares:

$6,013,517  allocated to the common shareholder pool
  1,187,068  valid Proofs of Claim have been filed for shares of common stock
$6,013,517 ÷ 1,184,853 equals $5.06 per share

Preferred Shares:

$2,168,158  allocated to preferred shareholder pool
     334,455  valid Proofs of Claim have been filed for shares of preferred stock
$2,168,158 ÷ 334,455 equals $6.48 per share

           Option Holders:

$700,000 will be allocated to option holders.  Pursuant to the Notice, these funds are divided into three parts depending on exercise price.  Specifically, on a per option basis, we currently estimate the following distribution:

                            Holders of $5 and $10 options                $2.22 per option
                            Holders of $15 and $19 options              $5.17 per option
                            Holders of $23 and $27 options              $2.44 per option

Frequently Asked Questions

Why are you holding back $20,000?

We are holding back $20,000, which amounts to approximately .01¢ per share or option.  We are doing that because we anticipate more out-of-pocket expenses being incurred, primarily through claims administration, taxes to be paid on interest on the settlement account and the need to pay certain invoices which we still expect to receive.  However, please see the residual funds discussion below.

Why is there an anomaly in the amount for the option holders?

The anomaly between the three groups of option holders is largely explained by who filed, and who did not file, Proofs of Claim.  It is also explained, in part, by who was excluded from the Class.  When we researched the matter in some depth, we determined that many of the individuals holding options with exercise prices of $5 to $10 and exercise prices of $23 and $27, also held $15 to $19 options.  Therefore, an attempt to shift money from one group to another would, in large part, be moving money from one individual’s pocket to that same individual’s other pocket.  When we netted out the potential inequity, it did not justify going back to Court, seeking reapproval of a Plan of Allocation and delaying the distribution of funds by, literally, months.

How were attorneys’ fees calculated?

The attorneys’ fees were calculated pursuant to the Notice, the Order and, particularly, the Memorandum in Support of Plaintiffs’ Motion for Reimbursement of Expenses, Award to Plaintiffs and Award of Attorneys’ Fees, all of which are set forth below.  In reviewing these documents, there was a slight discrepancy in the manner in which fees could be calculated.  Class Counsel took the approach/interpretation most beneficial to the Class.

When will I receive my settlement proceeds?

The Claims Administrator, Analytics Inc., estimates that the distribution of checks relating to the settlement may likely occur during the first two weeks of June.  Obviously, both Class Counsel and the Claims Administrator will proceed as expeditiously as possible assuming the RTI sale closes the week of May 16, 2011.  There is no advantage to withholding the funds from distribution, however, the processing simply takes time. 

What if I have a special circumstance which needs to be handled?

The Proofs of Claim were filed in October and November of 2010.  Occasionally, peoples’ circumstances change – they may move and change addresses, they may have secured a portion of their expected recovery for a loan, a person expecting to receive funds may have died or an entity entitled to receipt of settlement proceeds may have been dissolved.  In the event that you have a special circumstance, please contact Analytics Inc. at 1-866-535-1629 and explain the circumstance.  While the Claims Administrator may not be able to address every need, they will certainly try to accommodate special circumstances where they can reasonably do so.

What happens with any residual funds?

In the Order, the Court directed that all residual funds left over after distribution be donated to the Hennepin County Legal Aid Society.  In a class settlement, no matter how great the efforts are at distributing money, there are often residual funds left over by, for example, people simply not cashing their checks.  At some point in time, the case will be closed and all residual funds will be donated to the Hennepin County Legal Aid Society assuming that the residual funds are not sufficient enough to cost-effectively justify a redistribution to Class members.  In this particular case, to the extent that the holdback monies ($20,000) are not utilized, they will become part of the residual funds to be donated to a charity unless, again, the residual funds are sufficient enough to justify a second distribution.

Where can I get additional information?

You should feel free to contact the Claims Administrator, Analytics Inc., at 1-866-535-1629 if you have additional questions about your claim and the distribution process.  If you want to review in more detail the work done in connection with the litigation or the expenses incurred, please contact Deanna Stower at dstower@aoblaw.com to arrange a time to meet at the offices of Anthony Ostlund Baer & Louwagie.

Restaurant Technologies, Inc   

In 2009, Anthony Ostlund Baer & Louwagie initiated a putative class action against Restaurant Technologies Inc. (RTI) and certain on its officers and directors. The case was brought on behalf of individuals and entities who owned RTI common stock, preferred stock and options. The case was originally filed in state court in July, 2009, but was removed to the United States District Court for the District of Minnesota.

Recently, a settlement was reached between the parties.  The settlement is still subject to final approval by the court.  Listed below are some of the documents relating to the settlement.

The attorneys working on this matter include Robert Moilanen and Nathan Brennan. You should feel free to contact them with regard to any questions you have about the matter although we intend to use this website to keep people apprised of the status of this matter.