1. Why is there a Notice?
The Court directed that the Notice be sent because you, someone in your family, or an investment account for which you serve as a custodian may have invested in any Quantum or Quaneco offering(s) and may be a member of the Class, as defined below. The Court has directed us to send the Notice because, as a Class Member, you have a right to know about your options before the Court rules on the proposed Settlement. Additionally, you have the right to understand how this class action lawsuit may generally affect your legal rights. If the Court approves the Settlement, the claims administrator selected and approved by the Court will make payments pursuant to the Settlement after any objections and appeals are resolved.
The purpose of this Notice is to inform you of the terms of the proposed Settlement and how you might be affected, and of a hearing to be held by the Court to consider the fairness, reasonableness, and adequacy of the Settlement and the motion by Class Counsel for an award of attorneys’ fees and reimbursement of Litigation Expenses (the “Final Settlement Hearing”). The Section entitled, “When and Where Will the Court Decide Whether To Approve the Settlement?" (FAQ 9) provides details about the Settlement Hearing, including the date and location of the hearing.
The issuance of the Notice is not an expression of any opinion by the Court concerning the merits of any claim in the Action, and the Court still has to decide whether to approve the Settlement. If the Court approves the Settlement, then payments to Authorized Claimants will be made after any appeals are resolved and after the completion of all claims processing. Please be patient, as this process can take some time to complete.
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2. What is this case about?
This is a proposed settlement of a class action lawsuit brought in the United States District Court for the Northern District of Ohio Eastern Division (the “Court”), against Phillips Murrah, P.C. (a law firm). A class action is a lawsuit in which one or more persons sue on behalf of others who have similar claims. The Members of this group are called the Class. In this lawsuit, Plaintiffs allege that Quantum Energy, LLC, and/or Quaneco, LLC, along with their principals Paul Mysyk and Harrison Schumacher (collectively, “Quantum”), engaged in a fraudulent investment scheme, resulting in financial losses to investors. Plaintiffs alleged that Phillips Murrah and several of its lawyers were also involved with and liable for their alleged role in the scheme.
Specifically, on July 20, 2016, Plaintiffs Thomas W. Spaude and Angela M. Spaude, Individually and as Co-Trustees of the Thomas W. Spaude and Angela M. Spaude Trust dated July 9, 2003, and Dennis C. Macieski, Individually and as Trustee of the Macieski CRNA PC 401(K) (“Plaintiffs”) filed a Class Action Complaint against Paul Mysyk, Harrison Schumacher, Quantum Energy, LLC, and/or Quaneco, LLC (collectively, “Quantum”) and Phillips Murrah, P.C., Robert O’Bannon, Beverly Vilardofsky, and Thomas Wolfe (collectively, the “Phillips Murrah Defendants”) in the United States District Court for the Northern District of Ohio, captioned Thomas W. Spaude and Angela M. Spaude, Individually and as Co-Trustees of the Thomas W. Spaude and Angela M. Spaude Trust dated July 9, 2003, and Dennis C. Macieski, Individually and as Trustee of the Macieski CRNA PC 401(K) v. Paul Mysyk, et al., Case No. 1:16-cv-01836-DCN (“Spaude I”). Phillips Murrah and Thomas Wolfe were dismissed without prejudice from Spaude I. All claims were dismissed with prejudice against Defendants O’Bannon and Vilardofsky in Spaude I in a decision on a Motion to Dismiss.
Plaintiffs filed a second Class Action Complaint against Phillips Murrah, P.C. and Thomas Wolfe in the Northern District of Ohio, captioned Thomas W. Spaude and Angela M. Spaude, Individually and as Co-Trustees of the Thomas W. Spaude and Angela M. Spaude Trust dated July 9, 2003, and Dennis C. Macieski, Individually and as Trustee of the Macieski CRNA PC 401(K) v. Phillips Murrah, et al., Case No. 1:17-cv-02120-DCN (“Spaude II”). Spaude II arises out of the same allegedly fraudulent investment scheme and seeks monetary damages. This settlement is entered in Spaude II.
Plaintiffs and Phillips Murrah (the “Settling Defendant”) have concluded that settlement is in their best interests because of the uncertainty, expenses, risks, and delays of litigation. The parties have reached a proposed settlement entitling eligible Class Members who timely submit a Claim Form to receive a pro rata share of the settlement amount should the Court approve the settlement. After taking into account the risks and costs of further litigation, Plaintiffs and their counsel believe the terms and conditions of the settlement are fair, reasonable, adequate, and equitable, and that the settlement is in the best interest of the Settlement Class Members. The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement. If there are appeals, payments will not be made until the appeals are resolved and the settlement becomes effective. Please be patient.
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3. HOW DO I KNOW IF I AM AFFECTED BY THE SETTLEMENT?
WHO IS INCLUDED IN THE CLASS?
If you are a member of the Settlement Class, you are subject to the Settlement. The Class consists of:
All investors, including any and all of their respective successors-in-interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate and remote, and any person or entity acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors and successors and assigns, who have invested in any Quantum or Quaneco offering on or after October 5, 2005, including but not limited to the following Quantum offerings: Quaneco LLC Preferred B Units Offerings dated October 5, 2005 and November 27, 2006; Rich County Overriding Royalty Offering dated November 1, 2007; Quaneco LLC Preferred D Units Offering dated December 15, 2008; Overthrust Overriding Royalty Offering dated February 16, 2009; Crawford Thrust Offering dated April 15, 2010; the Crain 16-4 Offering dated March 1, 2012; Quantum Overriding Royalty and Development Program dated October 22, 2012; Quantum Energy Drilling Production Program dated February 1, 2011; Quantum Energy Phoenix Program dated March 2, 2015; and Niabora Leasing and Development Program dated January 8, 2014.
PLEASE NOTE: RECEIPT OF THE NOTICE DOES NOT MEAN THAT YOU ARE A CLASS MEMBER OR THAT YOU WILL BE ENTITLED TO RECEIVE PROCEEDS FROM THE SETTLEMENT. IF YOU ARE A CLASS MEMBER AND WISH TO BE ELIGIBLE TO PARTICIPATE, YOU ARE REQUIRED TO SUBMIT THE CLAIM FORM THAT IS BEING PROVIDED ON THIS WEBSITE AND THE REQUIRED SUPPORTING DOCUMENTATION AS SET FORTH THEREIN POSTMARKED NO LATER THAN MARCH 25, 2019.
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4. HOW ARE CLASS MEMBERS AFFECTED BY THE ACTION AND THE SETTLEMENT?
As a Class Member, you are represented by Plaintiffs and Class Counsel unless you enter an appearance through counsel of your own choice at your own expense. You are not required to retain your own counsel, but if you choose to do so, such counsel must file a notice of appearance on your behalf and must serve copies of his or her appearance on the attorneys listed in the section entitled, “When And Where Will The Court Decide Whether To Approve The Settlement?,” on page 8.
If you are a Class Member and you wish to object to the Settlement, or Class Counsel’s application for attorneys’ fees and reimbursement of Litigation Expenses, you may present your objections by following the instructions in the section entitled, “When And Where Will The Court Decide Whether To Approve The Settlement?” on page 8.
If you are a Class Member but wish to be excluded from the Class, you may opt out by following the instructions in the section entitled, “Can I Exclude Myself From The Settlement?” on page 7.
If you are a Class Member, you will be bound by any orders issued by the Court. If the Settlement is approved, the Court will enter a judgment (the “Final Judgment”). The Final Judgment will dismiss with prejudice the claims against Defendants and will provide that, upon the Effective Date of the Settlement, Plaintiffs and each of the other Class Members, on behalf of themselves, and their respective heirs, executors, administrators, attorneys, agents, partners, predecessors, successors, beneficiaries, and assigns in their capacities as such, will have fully, finally and forever compromised, settled, released, resolved, relinquished, waived and discharged each and every Released Claim (as defined below) against the Defendants and the other Releasees (as defined below), and shall forever be barred and enjoined from commencing, instituting, asserting, maintaining, enforcing, prosecuting, or otherwise pursuing, either directly or in any other capacity, any or all of the Released Claims against any of the Releasees.
The Judgment will also provide that, upon the Effective Date of the Settlement, Plaintiffs, on behalf of themselves, and their respective heirs, executors, administrators, attorneys, agents, partners, predecessors, successors, beneficiaries, and assigns in their capacities as such, will have fully, finally and forever compromised, settled, released, resolved, relinquished, waived and discharged each and every Released Claim (as defined below) against Settling Defendant and the other Releasees (as defined below), and shall forever be barred and enjoined from prosecuting any or all of the Released Claims against any of the Releasees.
“Released Claims” means the claims released as set forth in Section N of the Settlement Agreement.
“Releasees” or “Released Parties” means (i) Phillips Murrah, P.C.; (ii) Thomas Wolfe; (iii) Robert O’Bannon; (iv) Beverly Vilardofsky; and (v) Phillips Murrah’s past, present, and future employees, consultants, contractors, officers, directors, executors, heirs, indemnitors, representatives, attorneys, affiliates, insurers, subsidiaries, divisions, parents, predecessors, successors, agents (whether by estoppel or otherwise), and assigns.
“Releasors” means Plaintiffs and the Settlement Members who have not properly and/or timely opted out of the settlement and their past, present, and future employees, consultants, contractors, officers, directors, executors, heirs, indemnitors, representatives, attorneys, affiliates, insurers, subsidiaries, divisions, parents, predecessors, successors, agents (whether by estoppel or otherwise), and assigns.
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5. HOW DO I PARTICIPATE IN THE SETTLEMENT? WHAT DO I NEED TO DO?
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6. HOW MUCH WILL MY PAYMENT BE?
At this time, it is not possible to make any determination as to how much any individual Class Member may receive from the Settlement.
Pursuant to the Settlement, the Settling Defendant has agreed to pay or caused to be paid two hundred and fifty thousand dollars ($250,000.00) in cash. The Settlement Amount will be deposited into an escrow account. The Settlement Amount plus any interest earned thereon is referred to as the “Settlement Fund.” If the Settlement is approved by the Court and the Effective Date occurs, the “Net Settlement Fund” (that is, the Settlement Fund less (a) all federal, state and/or local taxes on any income earned by the Settlement Fund and the expenses and costs incurred in connection with determining the amount of and paying taxes owed by the Settlement Fund (including the expenses of tax attorneys and accountants); and (b) any attorneys’ fees and Litigation Expenses awarded by the Court) will be distributed on a pro rata basis to Class Members who submit valid Claim Forms.
A Distribution Amount will be calculated based on each Authorized Claimant’s investments provided on the Proof of Claim Form and any additional information as the Claims Administrator or the Court may require.
The Distribution Amount for each Authorized Claimant will be calculated according to the Allocation Plan.
The Net Settlement Fund will not be distributed unless and until the Court has approved the Settlement and the time for any petition for rehearing, appeal or review, whether by certiorari or otherwise, has expired.
Settling Defendant and all other persons or entities that paid any portion of the Settlement Amount on their behalf are not entitled to get back any portion of the Settlement Fund once the Court’s order or judgment approving the Settlement becomes Final. Settling Defendant shall not have any liability, obligation or responsibility for the administration of the Settlement or the disbursement of the Net Settlement Fund.
Unless the Court otherwise orders, any Class Member who fails to submit a Claim Form postmarked on or before shall be fully and forever barred from receiving payments pursuant to the Settlement but will in all other respects remain a Class Member and be subject to the provisions of the Stipulation, including the terms of any Judgment entered and the releases given. This means that each Class Member releases the Released Claims (as defined above) against the Releasees (as defined above) and will be enjoined and prohibited from filing, prosecuting, or pursuing any of the Released Plaintiff’ Claims against any of the Releasees whether or not such Class Member submits a Claim Form.
The Court has reserved jurisdiction to allow, disallow, or adjust on equitable grounds the Claim of any Class Member.
Each Claimant shall be deemed to have submitted to the jurisdiction of the Court with respect to his, her or its Claim Form.
Only Class Members as defined above will be eligible to share in the distribution of the Net Settlement Fund.
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7. CAN I EXCLUDE MYSELF FROM THE SETTLEMENT?
You can exclude yourself from the Class if you wish to retain the right to sue (i) Phillips Murrah, P.C.; (ii) Thomas Wolfe; (iii) Robert O’Bannon; (iv) Beverly Vilardofsky; and (v) Phillips Murrah’s past, present, and future employees, consultants, contractors, officers, directors, executors, heirs, indemnitors, representatives, attorneys, affiliates, insurers, subsidiaries, divisions, parents, predecessors, successors, agents (whether by estoppel or otherwise), and assigns, separately for the claims released by the settlement.
If you exclude yourself, you cannot file a claim or object to the settlement.
If you do not want to be in the Class you must mail written notice of your intent to exclude yourself from the class to the address set forth below so that it is postmarked by March 11, 2019.
If you timely exclude yourself, you will not receive any benefit available under the proposed settlement and you will not be bound by any orders or judgments entered in this case.
To be excluded, your written notice must state “I request to be excluded from the Spaude, et al. v. Phillips Murrah, et al. settlement class.” Your written notice also must contain your name and address, and must be signed and dated by you. Your written notice to be excluded from the Class must be signed by the Class Member, and not by anyone else as a representative of a Class Member (unless the Class Member is deceased or incapacitated). Failure to comply with any of these requirements may result in your written notice to be excluded from the Class being invalid. If you wish to exclude yourself from the class, mail written notice of your request for exclusion to the following address:
Spaude v Phillips Murrah Settlement
Heffler Claims Group, LLC
1515 Market Street
Philadelphia, PA 19102
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8. WHAT PAYMENT ARE THE ATTORNEYS FOR THE CLASS SEEKING?
Class Counsel has not received any payment for its services in pursuing claims against any current or former Defendant on behalf of the Class, nor has Class Counsel been reimbursed for its out-of-pocket expenses. Before final approval of the Settlement, Class Counsel will apply to the Court for an award of attorneys’ fees and expenses in an amount not to exceed one-third of the common fund. At the same time, Class Counsel intends to apply for reimbursement of Litigation Expenses. The Court will determine the amount of any award of attorneys’ fees or reimbursement of Litigation Expenses. Such sums as may be approved by the Court will be paid from the Settlement Fund. Class Members are not personally liable for any such fees or expenses.
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9. WHEN AND WHERE WILL THE COURT DECIDE WHETHER TO APPROVE THE SETTLEMENT?
Class Members do not need to attend the Settlement Hearing. The Court will consider any submission made in accordance with the provisions below even if a Class Member does not attend the hearing. You can participate in the Settlement without attending the Settlement Hearing.
The Settlement Hearing will be held on April 9, 2019 at 9:00 a.m. before the Honorable Donald C. Nugent at the United States District Court for the Northern District of Ohio Eastern Division, Courtroom 15A. The Court reserves the right to approve the Settlement, Class Counsel’s motion for an award of attorneys’ fees and reimbursement of Litigation Expenses, and/or any other matter related to the Settlement at or after the Settlement Hearing without further notice to the members of the Class.
Any Class Member may object to the Settlement by filing with the Court a written notice of intent to object, with a copy served on counsel for Plaintiffs and counsel for Settling Defendant. Objections must be in writing. You must file any written objection, together with copies of all other papers and briefs supporting the objection, with the Clerk’s Office at the address set forth below on or before. You must also serve the papers on Plaintiffs’ Counsel and on Defendants’ Counsel at the addresses set forth below so that the papers are received on or before March 19, 2019.
Clerk of Courts
Carl B. Stokes U.S. Court House
801 West Superior Avenue
Cleveland, Ohio 44113
Lydia M. Floyd
James P. Booker
Peiffer, Wolf, Carr &
1422 Euclid Ave.
Cleveland, OH 44115
Alan L. Rosca
Rosca Law, LLC,
23250 Chagrin Blvd.
Beachwood, OH 44122
J. Barton Goplerud
Brian O. Marty
Shindler, Anderson, Goplerud & Weese, P.C.
5015 Grand Ridge Drive
Wes Des Moines, IA 50265
John Q. Lewis
Dustin B. Rawlin
Jennifer L. Mesko
Tucker Ellis LLP
950 Main Avenue
Cleveland, OH 44113
Any objection must state: (a) the case name and case number of this Action; (b) the name, address and telephone number of the person or entity objecting and must be signed by the objector; (c) the specific reasons for the Class Member’s objections to the Settlement and a detailed statement of the factual and legal basis for such objections; and (d) information identifying all witnesses, by name, address, and a summary of proposed testimony, who the objecting Class Member may call to testify at the Final Settlement Hearing, and describe and produce copies of all evidence such objecting Class Member may offer at the Final Settlement Hearing. You may not object to the Settlement or Class Counsel’s motion for attorneys’ fees and reimbursement of Litigation Expenses if you previously excluded yourself from the Class pursuant to paragraph K or if you are not a member of the Class.
Unless the Court orders otherwise, any Class Member who does not object in the manner described above will be deemed to have waived any objection and shall be forever foreclosed from making any objection to the proposed Settlement or Class Counsel’s motion for an award of attorneys’ fees and reimbursement of Litigation Expenses. Class Members do not need to appear at the Settlement Hearing or take any other action to indicate their approval.
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10. WHERE CAN I GET ADDITIONAL INFORMATION?
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