United States District Court, S.D. New York
MEMORANDUM & ORDER
J. NATHAN, District Judge
the Court are two sets of motions. First, Plaintiffs William
Tran and Adrian Ybarra seek appointment as Lead Plaintiffs in
this purported securities class action, and to have their
chosen counsel, The Rosen Law Firm, P.A., and Pomerantz, LLP,
approved as co-lead counsel for the purported class.
See Dkt. No. 23. Second, the individual defendants
in this case, Arben Kryeziu a/k/a Arben Kane
("Kane") and Reid Dabney ("Individual
Defendants"), move for an order extending the automatic
bankruptcy stay to the claims asserted against the Individual
Defendants. See Dkt. No. 35. For the reasons that
follow, Plaintiffs' Tran and Ybarra's motions are
granted, and the Court defers to the United States Bankruptcy
Court for the District of Delaware to decide, in the first
instance, the appropriateness of staying this action as
against the Individual Defendants.
Appointment of Lead Plaintiff and Lead Counsel
noted, on July 11, 2016, Plaintiffs William Tran and Adrian
Ybarra moved for the Court to appoint them as lead plaintiffs
in this securities class action. Dkt. No. 23. Tran and Ybarra
also moved for approval of their chosen counsel, The Rosen
Law Firm, P. A., and Pomerantz LLP, as co-lead counsel for
the purported class. Id. Three competing motions
were originally filed on the same day by George Torres, Dkt.
No. 24, Afaq Shaik, Dkt. No. 28, and Larry Strowbridge, Dkt.
No. 31, but all three have since been withdrawn, and Torres,
Shaik, and Strowbridge have all indicated that they do not
oppose appointment of Tran and Ybarra as lead plaintiffs.
See Dkt. No. 41; Dkt. No. 44; Dkt. No. 46. No other
opposition been filed. For the reasons articulated below, the
Court appoints Tran and Ybarra Lead Plaintiffs and approves
their chosen law firms as co-counsel for the class.
Appointment of Lead Plaintiffs
Tran and Ybarra's motion is now unopposed, the Court
nevertheless addresses the requirements under the Private
Securities Litigation Reform Act of 1995 (the
"PSLRA") for appointment of lead plaintiffs, as
other courts have done so even in the context of unopposed
motions. See, e.g., In re Symbol Techs., Inc. Sec.
litig., No. 05-CV-3923 (DRH)(JO), 2006 WL 1120619, at *2
(E.D.N.Y. Apr. 26, 2006) (engaging in a similar inquiry to
address the merits of an unopposed motion for appointment of
lead plaintiff and class counsel); accord Yousefi v.
Lockheed Martin Corp., 70 F.Supp.2d 1061, 1070 (CD. Cal.
1999) ("When determining which class member to appoint
lead plaintiff, a court should consider the rebuttable
presumption factors enumerated in the Act, even when the
motion is unopposed.").
the PSLRA, "the Court is required to appoint the
'most adequate plaintiff as lead plaintiff."
Maliarov v. Eros Intern. PLC, Nos. 15-cv-8956 (AJN),
16-cv-223 (AJN), 2016 WL 1367246, at *2 (Apr. 5, 2016)
(quoting 15 U.S.C. § 78u-4(a)(3)(B)(i)). The statute
establishes a rebuttable presumption that the "most
adequate plaintiff is a plaintiff who, first, "has
either filed the complaint or made a motion in response to a
notice, " second, "has the largest financial
interest in the relief sought by the class, " and third,
"otherwise satisfies the requirements of Rule 23."
15 U.S.C. § 78u-4(a)(3)(B)(iii)(I)(aa)-(cc). "This
presumption may only be rebutted by proof that the
purportedly most adequate plaintiff 'will not fairly and
adequately protect the interests of the class' or 'is
subject to unique defenses that render such plaintiff
incapable of adequately representing the class.'"
Maliarov, 2016 WL 1367246, at *2 (quoting 15 U.S.C.
§ 78u-4(a)(3)(B)(iii)(II)(aa), (bb)).
initial matter, Tran and Ybarra satisfied the first
requirement, making a motion in response to a notice, when
they moved for appointment as lead plaintiffs. See In re
Deutsche Bank Aktiengesellschqft Sec. Litig., No.
16-cv-03495 (AT) (BCM), 2016 WL 5867497, at *4 (S.D.N.Y. Oct.
Tran and Ybarra have the "largest financial interest in
the relief sought by the class" of any plaintiff who
moved for appointment of class counsel. §
in this district, in determining which plaintiff has the
greatest such interest, look to the following factors:
(1) the total number of shares purchased during the class
period; (2) the net shares purchased during the class period
...; (3) the net funds expended during the class period...;
and (4) the approximate losses suffered.
Maliarov, 2016 WL 1367246, at *2 (quoting Peters
v. Jinkosolar Holding Co., Ltd., No. 11-CV-7133 (JPO),
2012 WL 946875, at *5 (S.D.N.Y. Mar. 19, 2012)). The last
factor, financial loss, is the most important of the four.
Peters, 2012 WL 946875, at *5.
and Ybarra represent that they purchased a total of 39, 004
shares during the class period; that they purchased 27, 032
net shares (subtracting the total sold from the total
purchased); that they expended $98, 586.28 in net funds; and
that they lost $97, 775.32. See Dkt. No. 25, Ex. 3.
The other plaintiffs, in withdrawing their respective
motions, acknowledged that their financial interest was not
as great. See Dkt. No. 27, Ex. 3 (noting that Torres
purchased 22, 786 total shares and 14, 486 net shares,
expended $55, 251.60 in net funds, and lost $53, 740.71);
Dkt. No. 30, Ex. 3 (noting that Shaik purchased 9, 000 total
shares and 6, 500 net shares, expended $22, 255.00 in net
funds, and lost $21, 657.06); Dkt. No. 33, Ex. 2 (noting that
Strowbridge purchased 69, 735 total shares and 26, 425 net
shares; expended $73, 990.00 in net funds; and lost $69,
836.25). No additional plaintiff has come forward suggesting
she has a greater financial interest in this litigation.
Tran and Ybarra have made a sufficient preliminary showing
that they can satisfy the relevant requirements of Federal
Rule of Civil Procedure 23. Rule 23(a) permits a party to sue