In re Merit Medical Systems, Inc. Securities Litigation" — Entry #123: DECLARATION of Eric J
Case: In re Merit Medical Systems, Inc. Securities Litigation" cacd · 8:19-cv-02326
filed December 03, 2019
What this document is
Docket entry #123 · filed November 29, 2022
DECLARATION of Eric J. Miller in support of NOTICE OF MOTION AND MOTION for Disbursement of Funds Claims administration is complete. [Unopposed Motion for Approval of Distribution Plan] 121 filed by Plaintiffs City of Atlanta Firefighters Pension Fund, City of Atlanta Police Officers Pension Fund, Employees Retirement System of the City of Baton Rouge and Parish of East Baton Rouge. (Attachments: # 1 Exhibit A - Deficiency Letter, # 2 Exhibit B - Status Email, # 3 Exhibit C - Status Spreadsheet, # 4 Exhibit D - Timely Eligible Claims, # 5 Exhibit E - Late But Otherwise Eligible Claims, # 6 Exhibit F - Rejected Claims, # 7 Exhibit G - Invoices)(Uslaner, Jonathan) (Entered: 11/29/2022)
Who is involved
- Bucks County Employees Retirement Fund
- City of Atlanta Firefighters Pension Fund
- City of Atlanta Police Officers Pension Fund
- Employees Retirement System of the City of Baton Rouge and Parish of East Baton Rouge
- Fred P. Lampropoulos
- Merit Medical Systems, Inc.
- Norfolk County Retirement System
- Raul Parra
- Sheet Metal Workers Local 19 Pension Fund
Why we have it
We follow this case because it names a company we track, although that company is not a party:
- Marathon Digital: its former name “Marathon Patent Group, Inc.” appears in a filing in this case.
…FAT Brands, Inc. (08/24/2018) Marathon Patent Group Inc (07/20/2018) Community Bank (05/31/2018)…
A free copy from the RECAP archive of federal court filings (mirrored at the Internet Archive), retrieved November 03, 2026. Federal court filings are public records.
Document text
23 page(s), 55,682 characters, converted from the PDF's text layer · plain text.
Full text
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 1 of 23 Page ID
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UNITED STATES DISTRICT COURT
9 CENTRAL DISTRICT OF CALIFORNIA
10 SOUTHERN DIVISION
11 IN RE MERIT MEDICAL SYSTEMS, Case No. 8:19-cv-2326-DOC-ADS
12 INC. SECURITIES LITIGATION
DECLARATION OF ERIC J.
13 MILLER IN SUPPORT OF
14 UNOPPOSED MOTION FOR
APPROVAL OF DISTRIBUTION
15 PLAN
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Judge: Hon. David O. Carter
17 Courtroom: 10A
18 Date: January 9, 2023
Time: 8:30 a.m.
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DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
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1 I, Eric J. Miller, hereby declare under penalty of perjury as follows:
2 1. I am a Senior Vice President of A.B. Data, Ltd.’s Class Action
3 Administration Company (“A.B. Data”), which has its corporate office in
4 Milwaukee, Wisconsin. I am over 21 years of age and am not a party to the above-
5 1
captioned action (“Action”). I have personal knowledge of the facts set forth in this
6 declaration and, if called as a witness, could and would testify competently thereto.
7 2. Pursuant to the Court’s January 3, 2022 Order Preliminarily Approving
8 Settlement and Providing for Notice of the Settlement (ECF No. 106) (“Preliminary
9 Approval Order”), A.B. Data was retained by Lead Counsel to serve as the Claims
10 Administrator in connection with the Settlement of the Action. As Claims
11 Administrator, A.B. Data has, among other things: (i) mailed the Notice of
12 (I) Pendency of Class Action and Proposed Settlement; (II) Settlement Hearing; and
13 (III) Motion for Attorneys’ Fees and Litigation Expenses (“Notice”) and the Proof
14 of Claim and Release Form (“Claim Form” and together with the Notice the “Notice
15 Packet”) to potential Settlement Class Members, brokers, and other nominees;
16 (ii) created and continues to maintain a toll-free helpline for inquiries during the
17 course of the administration; (iii) created and continues to maintain a website for the
18 Settlement (“Settlement Website”) and posted case-specific documents on it;
19 (iv) caused the Summary Notice to be published; (v) provided, upon request,
20 additional copies of the Notice Packet to potential Settlement Class Members,
21 brokers, and other nominees; and (vi) received and processed each Claim Form
22 received by the Claims Administrator (“Claim(s)”).
23 3. On April 15, 2022, the Court entered the Order Approving Plan of
24 Allocation of Net Settlement Fund (ECF No. 117) and granted final approval of the
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26 1 All terms with initial capitalization not otherwise defined herein shall have the
27 meanings ascribed to them in the Stipulation and Agreement of Settlement dated
December 21, 2021 (ECF No. 105-1) (“Stipulation”). The Settlement is contained
28 in the Stipulation.
-1- DECLARATION OF ERIC J. MILLER
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1 Settlement on April 18, 2022, in its Judgment Approving Class Action Settlement
2 (ECF No. 119). A.B. Data has completed processing all Claims received through
3 November 28, 2022, in accordance with the terms of the Stipulation and the Court-
4 approved Plan of Allocation set forth in the Notice, and hereby submits its
5 administrative determinations accepting and rejecting the Claims in preparation for
6 a distribution of the Net Settlement Fund to Authorized Claimants. A.B. Data also
7 presents this declaration in support of Lead Plaintiffs’ Unopposed Motion for
8 Approval of Distribution Plan.
9 DISSEMINATION OF NOTICE
10 4. As more fully described in the Declaration of Eric J. Miller Regarding
11 (A) Mailing of the Notice and Proof of Claim Form; (B) Proof of Publication of the
12 Summary Notice; and (C) Report on Requests for Exclusion and Objections
13 Received to Date (ECF No. 111-3) (“Mailing Decl.”) and the Supplemental
14 Declaration of Eric J. Miller Regarding: (A) Mailing of the Notice and Proof of
15 Claim Form; and (B) Report on Requests for Exclusion Received (ECF No. 114-1)
16 (“Supp. Mailing Decl.”), as of April 5, 2022, A.B. Data had mailed 25,886 Notice
17 Packets to potential Settlement Class Members, brokers, and other nominees. Supp.
18 Mailing Decl. ¶ 2. Since that date, 750 additional Notice Packets have been
19 disseminated. In total, A.B. Data has disseminated 26,636 Notice Packets to
20 potential Settlement Class Members, brokers, and other nominees.
21 5. A.B. Data established and continues to maintain the Settlement Website
22 (www.MeritMedicalSecuritiesLitigation.com) and a toll-free telephone helpline
23 (877-242-2522) to assist potential Settlement Class Members. The Settlement
24 Website, which provides access to important documents relevant to the Settlement,
25 and the telephone helpline enable Settlement Class Members to obtain information
26 about the Settlement. In connection with establishing and maintaining the Settlement
27 Website and toll-free telephone helpline, A.B. Data, among other things, formulated
28 a system to ensure that proper responses were provided to all telephone and
-2- DECLARATION OF ERIC J. MILLER
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1 electronic inquiries. That work included training telephone agents to respond to
2 inquiries specific to the Settlement; developing a series of common questions and
3 the answers thereto known as Frequently Asked Questions or “FAQs”; loading key
4 documents onto the Settlement Website; and programming the Settlement Website
5 to permit the viewing and downloading of those documents.
6 6. In accordance with paragraph 7(d) of the Preliminary Approval Order,
7 on February 7, 2022, A.B. Data caused the Summary Notice to be published in
8 Investor’s Business Daily and released via PR Newswire. Mailing Decl. ¶ 9.
9 PROCEDURES FOLLOWED IN PROCESSING CLAIMS
10 7. Under the terms of the Preliminary Approval Order and as set forth in
11 the Notice, each Settlement Class Member who wished to be eligible to receive a
12 distribution from the Net Settlement Fund was required to complete and submit to
13 A.B. Data a properly executed Claim Form postmarked (if mailed) or online no later
14 than May 25, 2022, together with adequate supporting documentation for the
15 transactions and holdings reported in the Claim Form. Through November 28, 2022,
16 A.B. Data has received and fully processed 12,440 Claims (“Presented Claims”).
17 8. In preparation for receiving and processing Claims, A.B. Data:
18 (i) conferred with Lead Counsel to define the guidelines for processing Claims;
19 (ii) created a unique database to store Claim details, images of Claims, and
20 supporting documentation (“Settlement Database”); (iii) trained staff in the specifics
21 of the Settlement so that Claims would be properly processed; (iv) formulated a
22 system so that telephone and email inquiries would be properly responded to;
23 (v) developed various computer programs and screens for entry of Settlement Class
24 Members’ identifying information and their transactional information; and
25 (vi) developed a proprietary “calculation module” that would calculate Recognized
26 Claims pursuant to the Court-approved Plan of Allocation for the Net Settlement
27 Fund set forth in the Notice.
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1 9. Settlement Class Members seeking to share in the Net Settlement Fund
2 were directed in the Notice to submit their Claims to a post office box address
3 specifically designated for the Settlement or to submit their Claims online through
4 the Settlement Website. Notice Packets returned by the United States Postal Service
5 as undeliverable were reviewed for updated addresses and, where available, updated
6 addresses were entered into the database and Notice Packets were mailed to the
7 updated addresses. Any correspondence received at the post office box was reviewed
8 and, when necessary, appropriate responses were provided to the senders.
9 PROCESSING CLAIMS
10 Paper Claims and Claim Forms Submitted Via the
Settlement Website
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12 10. Of the 12,440 Presented Claims, 371 are Claims that were submitted on
13 paper (237) or via the online filing component of the Settlement Website provided
14 for individual investors (134). Once received, paper Claims were opened and
15 prepared for scanning. This process included unfolding documents, removing
16 staples, copying nonconforming-sized documents, and sorting documents. This
17 manual task of preparing the paper Claims is very laborious and time intensive. Once
18 prepared, paper Claims were scanned into the Settlement Database together with all
19 submitted documentation. Subsequently, each Claim was assigned a unique Claim
20 number. Once scanned, the information from each Claim Form, including the
21 Claimant’s name, address, and account number/information from the supporting
22 documentation, and the Claimant’s purchase/acquisition transactions, sale
23 transactions, and holdings listed on the Claim Form, was entered into the Settlement
24 Database. Once entered into the Settlement Database, each Claim was reviewed to
25 verify that all required information had been provided. The documentation provided
26 by the Claimant in support of the Claim was reviewed for authenticity and compared
27 to the information provided in the Claim to verify the Claimant’s identity and the
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1 purchase/acquisition transactions, sale transactions, and holdings listed on the Claim
2 Form.
3 11. To process the transactions detailed in the Claims, A.B. Data utilized
4 internal codes (“flags”) to identify and classify deficiency or ineligibility conditions
5 existing within those Claims. Appropriate flags were assigned to the Claims as they
6 were processed. For example, where a Claim was submitted by a Claimant who did
7 not have any eligible transactions in Merit common stock during the Class Period
8 (e.g., the Claimant purchased Merit common stock only before or after the Class
9 Period), that Claim would receive a flag that denoted ineligibility. Similar defect
10 flags were used to denote other ineligible conditions, such as duplicate Claims.
11 These flags would indicate to A.B. Data that the Claimant was not eligible to receive
12 any payment from the Net Settlement Fund with respect to that Claim unless the
13 deficiency was cured in its entirety. Examples of conditions of ineligibility are as
14 follows:
15 MIDOC Inadequate or Missing Documentation for Entire Claim
16 DUPCL Duplicate Claim
17 NOPUR No Eligible Purchase during the Class Period
18 MISIG No Signature
19 NOLOS No Recognized Claim
20 12. Because a Claim may be deficient only in part, but otherwise
21 acceptable, A.B. Data utilized flags that were applied only to specific transactions
22 within a Claim. For example, if a Claimant submitted a Claim with supporting
23 documentation for all but one purchase transaction, that one transaction would
24 receive a defect flag. The flag indicated that although the transaction was deficient,
25 the Claim was otherwise eligible for payment if other transactions in the Claim
26 calculated to a Recognized Claim pursuant to the Court-approved Plan of Allocation.
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1 Thus, even if the deficiency was never cured, the Claim could still be partially
2 accepted. Examples of transaction-specific flags are as follows:
3 TDOC Missing or Inadequate Documentation for Specific Transaction
4 INEL Ineligible Transaction
5 TRN Transfer In/Free Receipt
6 B. Electronic Claims
7 13. Of the 12,440 Presented Claims, 12,069 were submitted electronically
8 (“Electronic Claims”). Electronic Claims are typically submitted by institutional
9 investors who may have hundreds or thousands of transactions during the Class
10 Period or by filers submitting Claims on behalf of multiple beneficial owners
11 (“Electronic Claim Filers” or “E-Claim Filers”). Rather than provide reams of paper
12 requiring data entry, the E-Claim Filers either mail a computer disc or electronically
13 submit a file to A.B. Data so that A.B. Data can upload all transactions to the
14 Settlement Database.
15 14. A.B. Data maintains an Electronic Claim Filing Team (“ECF Team”)
16 to coordinate and supervise the receipt and handling of all Electronic Claims. In this
17 case, the ECF Team reviewed and analyzed each electronic file to ensure that it was
18 formatted in accordance with A.B. Data’s required format and to identify any
19 potential data issues or inconsistencies within the file. If any issues or
20 inconsistencies arose, A.B. Data notified the filer. If the electronic file was deemed
21 to be in an acceptable format, it was then loaded into the Settlement Database.
22 15. Once each electronic file was loaded, the Electronic Claims were
23 flagged to denote any deficient or ineligible conditions that existed within them.
24 These flags are similar to those applied to paper Claims. In lieu of manually applying
25 flags, the ECF Team performed programmatic reviews on Electronic Claims to
26 identify deficient and ineligible conditions (such as, but not limited to, price out-of-
27 range issues, out-of-balance conditions, transactions outside the Class Period, etc.).
28 The output was thoroughly verified and confirmed as accurate.
-6- DECLARATION OF ERIC J. MILLER
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1 16. The review process also included flagging any Electronic Claims that
2 were not accompanied by a signed Claim Form, which serves as a “Master Proof of
3 Claim Form” for all Claims referenced on the electronic file submitted. This process
4 was reviewed by A.B. Data’s ECF Team and, when appropriate, A.B. Data contacted
5 the E-Claim Filers whose submissions were missing information. This ensured that
6 only fully completed Claims, submitted by properly authorized representatives of
7 the Claimants, were considered eligible to participate in the Settlement.
8 17. Finally, at the end of the process, A.B. Data performed various targeted
9 reviews of Electronic Claims. Specifically, A.B. Data used criteria such as the
10 calculated Recognized Claims and other identified criteria to flag and reach out to a
11 selection of E-Claim Filers and request that various sample purchases, sales, and
12 holdings selected by A.B. Data be documented by providing confirmation slips or
13 other transaction-specific supporting documentation. These targeted reviews help to
14 ensure that electronic data supplied by Claimants does not contain inaccurate
15 information.
16 EXCLUDED PERSONS
17 18. A.B. Data also reviewed all Claims to ensure that they were not
18 submitted by or on behalf of “Excluded Persons” to the extent that the identities of
19 such persons or entities were known to A.B. Data through the list of Defendants and
20 other excluded persons and entities set forth in the Stipulation and the Notice and
21 from the Claimants’ certifications on the Claim Forms. A.B. Data also reviewed all
22 Claims against the list of persons who were excluded from the Settlement Class
23 pursuant to request.
24 THE DEFICIENCY PROCESS
25 A. Paper Claims and Online Claims
26 19. Approximately 54% of the paper and online Claims, i.e., 200 of the 371
27 Claim Forms submitted either as paper Claims or via the Settlement Website, were
28 incomplete or had one or more defects or conditions of ineligibility, such as the
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1 Claim not being signed, not being properly documented, or indicating no eligible
2 transactions in Merit common stock during the Class Period. The “Deficiency
3 Process,” which primarily involved mailing letters to Claimants and responding to
4 communications from Claimants by email and/or telephone, was intended to assist
5 Claimants in properly completing their otherwise deficient submissions so that they
6 could be eligible to participate in the Settlement.
7 20. If paper and online Claims were determined to be defective, a Notice
8 of Rejection of Claim (“Deficiency Letter(s)”) was sent to the Claimants describing
9 the defect(s) in the Claims and what steps, if any, were necessary to cure the defect(s)
10 in these Claims. The Deficiency Letter advised Claimants that submission of
11 appropriate information and/or documentary evidence to complete the Claim had to
12 be sent within twenty (20) days from the date of the Deficiency Letter or the Claim
13 would be recommended for rejection to the extent that the deficiency or condition of
14 ineligibility was not cured. The Deficiency Letter also advised Claimants of their
15 right to contest these administrative determinations, and that Claimants were
16 required to submit written statements to A.B. Data requesting Court review of their
17 Claims and setting forth the basis for such requests. A.B. Data sent a total of 200
18 Deficiency Letters to Claimants who submitted paper or online Claims that A.B.
19 Data determined to be defective. Attached hereto as Exhibit A is an example of a
20 Deficiency Letter.
21 21. Claimants’ responses to Deficiency Letters were scanned into the
22 Settlement Database and associated with the corresponding Claims. The responses
23 were then carefully reviewed and evaluated by A.B. Data’s team of processors. If a
24 Claimant’s response corrected the defect(s) in a Claim, A.B. Data manually updated
25 the Settlement Database to reflect the changes in the status of the Claim.
26 B. Electronic Claims
27 22. For Electronic Claims, A.B. Data used the following process to contact
28 the banks, brokers, nominees, and other E-Claim Filers to confirm receipt of their
-8- DECLARATION OF ERIC J. MILLER
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1 submissions and to notify the Electronic Claim Filers of any deficiencies or
2 Electronic Claims that were ineligible. Each E-Claim Filer was sent an email to the
3 email address included with the Claim Form(s) (“Status Email(s)”) with an attached
4 Electronic Filer Status Spreadsheet (“Status Spreadsheet”), which contained detailed
5 information associated with the Claim(s) and indicated which Claim(s) within the
6 filing were deficient and/or rejected.
7 23. The Status Email sent to the email address of record provided with the
8 Claim Form:
9 (a) Notified the filer that any Claims with deficiencies not corrected
10 within twenty (20) days from the date of the Status Email may
11 be rejected;
12 (b) Advised the filer of the right to contest the rejection of the
13 Claim(s) and request this Court’s review of A.B. Data’s
14 administrative determination within twenty (20) days from the
15 date of the Status Email; and
16 (c) Provided the filer with instructions for how to submit corrections.
17 24. The Status Spreadsheet attached to the Status Email contained the
18 following information:
19 (a) A listing of all Electronic Claims associated with the filing and
20 their unique identification numbers;
21 (b) Identification of individual Electronic Claims that were found to
22 be deficient or ineligible;
23 (c) Each Electronic Claim’s current status in the Settlement
24 Database; and
25 (d) The current Recognized Claim calculation associated with each
26 Electronic Claim.
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-9- DECLARATION OF ERIC J. MILLER
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1 25. A.B. Data emailed a Status Email and Status Spreadsheet(s) to 122 E-
2 Claim Filers. Examples of a Status Email and Status Spreadsheet are attached hereto
3 as Exhibits B and C, respectively.
4 26. The E-Claim Filers’ responses were reviewed by A.B. Data’s ECF
5 Team, scanned and/or loaded into the Settlement Database, and associated with the
6 corresponding Electronic Claims. If a response corrected the defect(s) or affected an
7 Electronic Claim’s status, A.B. Data manually and/or programmatically updated the
8 database to reflect such change in status of the Electronic Claim.
9 NO DISPUTED CLAIMS
10 27. As noted above, Claimants were advised that they had the right to
11 contest A.B. Data’s administrative determination of deficiencies or ineligibility
12 within twenty (20) days from the date of notification and that they could request that
13 the dispute be submitted to the Court for review. More specifically, Claimants were
14 advised in the Deficiency Letter or Status Email that, if they disputed A.B. Data’s
15 determination, they had to provide a statement of reasons indicating the grounds for
16 contesting the determination, along with supporting documentation, and if the
17 dispute concerning the Claim could not otherwise be resolved, Lead Counsel would
18 thereafter present the request for review to the Court for a final determination.
19 28. A.B. Data has not received any requests for Court review. There are,
20 therefore, no disputed Claims requiring Court review.
21 LATE BUT OTHERWISE ELIGIBLE CLAIMS
22 29. Of the 12,440 Presented Claims, 66 Claims were received or
23 postmarked after May 25, 2022, the Claim submission deadline established by the
24 Court. A.B. Data processed all late Claims received through November 28, 2022,
25 and 35 late Claims have been found to be otherwise eligible in whole or in part (“Late
26 But Otherwise Eligible Claims”). A.B. Data has not rejected any Claim received
27 through November 28, 2022, solely based on its late submission, and A.B. Data
28 believes no delay has resulted from the provisional acceptance of these Late But
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1 Otherwise Eligible Claims. To the extent they are eligible but for the fact that they
2 were late, they are recommended for payment.
3 30. However, there must be a final cut-off date after which no more Claims
4 will be accepted so that there may be a proportional allocation of the Net Settlement
5 Fund and the distribution may be accomplished. Acceptance of additional Claims or
6 responses received during the finalization of the administration and the preparation
7 of this declaration would necessarily require a delay in the distribution. Accordingly,
8 A.B. Data also respectfully requests that this Court order that no Claim received after
9 November 28, 2022, or Claim cured or adjusted after November 28, 2022, be eligible
10 for payment for any reason whatsoever subject only to the provision of paragraph
11 39(f) of the proposed distribution plan discussed below. If the Court adopts the
12 proposed distribution plan, then, after Lead Counsel have determined that further
13 distributions are not cost-effective and before any contribution of the residual funds
14 to charity, if sufficient funds remain to warrant the processing of Claims received
15 after November 28, 2022, these Claims will be processed and, if any would have
16 been eligible if timely received, these Claimants may be paid their distribution
17 amounts, to the extent permitted by the amount of remaining funds, on a pro rata
18 basis that would bring them into parity with other Authorized Claimants who have
19 cashed all their prior distribution checks. See ¶ 39(f) below. With respect to
20 previously submitted Claims that are cured or adjusted after November 28, 2022,
21 such Claims will be reevaluated upon receipt of the adjustment and, to the extent
22 that they are found eligible for a distribution or additional distribution, they will be
23 treated in the same manner as Claims received after November 28, 2022. However,
24 should an adjustment result in a lower Recognized Claim amount, the Recognized
25 Claim amount will be reduced accordingly prior to a distribution to that Claimant.
26 QUALITY ASSURANCE
27 31. An integral part of the claims administration process is the Quality
28 Assurance review. Throughout the administration process, A.B. Data’s Quality
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1 Assurance Department worked to verify that Claims were processed properly by
2 ensuring that information was entered correctly into the database, deficiency and/or
3 rejection flags were assigned accurately, and deficiency and/or rejection
4 notifications were sent appropriately. After all Claims were processed, deficiency
5 and/or rejection notifications were sent, and Claimants’ responses to the deficiency
6 and/or rejection notifications were reviewed and processed, the supervisors and
7 managers in A.B. Data’s Quality Assurance Department performed additional
8 Quality Assurance reviews. These final Quality Assurance reviews further ensured
9 the correctness and completeness of all Claims processed prior to preparing this
10 declaration and all A.B. Data’s final documents in support of distribution of the Net
11 Settlement Fund. As part of the Quality Assurance reviews, A.B. Data:
12 (a) Verified that all Claim Forms had signatures of authorized
13 individuals;
14 (b) Verified that true duplicate Claims were identified, verified, and
15 rejected;
16 (c) Verified that Tax Identification Numbers were provided, when
17 applicable;
18 (d) Verified that persons and entities excluded from the Settlement
19 Class did not file Claims or their Claims were rejected upon
20 review;
21 (e) Performed a final Quality Assurance audit of Claims and all
22 supporting documentation to ensure completeness of Claims;
23 (f) Determined that Claimants requiring deficiency and/or rejection
24 notifications were sent such notification;
25 (g) Performed an audit of deficient Claims;
26 (h) Performed additional review of Claims with high Recognized
27 Claim amounts;
28 (i) Audited Claims that were designated invalid;
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1 (j) Audited Claims with a Recognized Claim amount equal to zero;
2 (k) Performed other auditing based on Claims completion
3 requirements and the approved calculation specifications based
4 on the Court-approved Plan of Allocation; and
5 (l) Re-tested the accuracy of the Recognized Claim amount
6 calculation program.
7 32. As part of its due diligence in processing the Claims, A.B. Data
8 conducted a Questionable Claim Filer search of all Claims submitted in connection
9 with the Settlement. A.B. Data maintains a Questionable Claim Filer Database of
10 known questionable filers, which contains names, addresses, and aliases of
11 individuals or entities that have been investigated by government agencies for
12 questionable claim filing, as well as names and contact information compiled from
13 previous settlements administered by A.B. Data in which fraudulent claims were
14 received. A.B. Data updates this Questionable Claim Filer Database on a regular
15 basis. The Settlement Database was searched for all individuals identified in the
16 Questionable Claim Filer Database. A.B. Data performs searches based on names,
17 aliases, addresses, and city/zip codes. In addition, A.B. Data’s claim processors are
18 trained to identify any potentially inauthentic documentation when processing
19 claims, including claims submitted by Claimants not previously captured in the
20 Questionable Claim Filer Database. Processors are instructed to flag any
21 questionable Claims and escalate them to management for review. There was one
22 (1) Claim identified as questionable for this Settlement and subject to internal audit
23 for further investigation and determination as to eligibility. A.B. Data sent this
24 Claimant a Deficiency Letter and an email notifying the Claimant that additional
25 documentation was required for the Claim to be eligible to participate in the
26 Settlement. No additional documentation has been received supporting this
27 potentially fraudulent Claim and one (1) potentially fraudulent Claim is
28 recommended for rejection for failure to cure its condition of ineligibility.
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1 RECOMMENDATIONS FOR APPROVAL AND REJECTION
2 33. As noted above, the number of Presented Claims in this motion is
3 12,440.
4 A. Timely Submitted and Valid Claims
5 34. A total of 12,374 Claims were received or postmarked on or before May
6 25, 2022, the Court-approved Claim submission deadline, of which 6,657 Claims
7 were determined by A.B. Data to be eligible to participate in the Settlement and are
8 recommended for approval (“Timely Eligible Claims”). The total Recognized Claim
9 amount for these Timely Eligible Claims is $37,995,111.53.
10 B. Late But Otherwise Eligible Claims
11 35. A total of 66 Claims were received or postmarked after May 25, 2022,
12 the Court-approved Claim submission deadline, but received on or before November
13 28, 2022. Of those 66 late Claims, 35 were determined by A.B. Data to be otherwise
14 eligible and are recommended for approval (“Late But Otherwise Eligible Claims”).
15 The total Recognized Claim amount for these Late But Otherwise Eligible Claims is
16 $463,751.28.
17 C. Rejected Claims
18 36. After the responses to Deficiency Letters and Status Emails were
19 processed, 5,748 Claims remain recommended for rejection by the Court (“Rejected
20 Claims”) for the following reasons:
21 (a) 3,702 Claims did not result in a Recognized Claim under the
22 Court-Approved Plan of Allocation (because, among other
23 reasons, the shares of Merit common stock at issue were not held
24 over an alleged corrective disclosure or were sold for a gain);
25 (b) 1,947 Claims had no purchase(s) of Merit common stock during
26 the Class Period;
27 (c) 19 deficient Claims were never cured;
28 (d) 61 were Duplicate or Replaced Claims; and
-14- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 16 of 23 Page
ID #:2056
1 (e) 19 Claims were withdrawn.
2 D. Lists of All Presented Claims
3 37. Attached hereto as Exhibits D through F are listings of all the Presented
4 Claims:
5 (a) Exhibit D lists the Timely Eligible Claims and shows each
6 Claimant’s Recognized Claim;
7 (b) Exhibit E lists the Late But Otherwise Eligible Claims and shows
8 each Claimant’s Recognized Claim; and
9 (c) Exhibit F lists the Rejected Claims and the reasons for rejection.
10 FEES AND DISBURSEMENTS
11 38. A.B. Data agreed to be the Claims Administrator in exchange for
12 payment of its fees and out-of-pocket expenses. Lead Counsel received reports on
13 and invoices for the work A.B. Data performed with respect to the provision of
14 notice and administration of the Settlement. Attached hereto as Exhibit G are copies
15 of A.B. Data’s invoices for its work performed on behalf of the Settlement Class as
16 well as an estimate for the work that will be performed and the costs that will be
17 incurred in connection with the initial distribution of the Net Settlement Fund.
18 Should the estimate of fees and expenses to conduct the initial distribution of the Net
19 Settlement Fund exceed the actual cost, the excess will be returned to the Net
20 Settlement Fund and will be available for subsequent distribution to Authorized
21 Claimants. As set forth in these invoices, A.B. Data’s total fees and expenses for this
22 matter through October 31, 2022, are $159,141.95. A.B. Data anticipates that its fees
23 and expenses for the work performed in conjunction with the initial distribution of
24 the Net Settlement Fund will be $17,905.88. To date, A.B. Data has been reimbursed
25 in the amount of $154,269.42. Accordingly, there is an outstanding balance of
26 $22,778.41 payable to A.B. Data from the Settlement Fund, which includes the
27 estimate for completing the initial distribution.
28
-15- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 17 of 23 Page
ID #:2057
1 DISTRIBUTION PLAN FOR THE NET SETTLEMENT FUND
2 39. Should the Court concur with A.B. Data’s determinations concerning
3 the provisionally accepted and rejected Claims, including the Late But Otherwise
4 Eligible Claims, A.B. Data recommends the following distribution plan
5 (“Distribution Plan”):
6 (a) A.B. Data will conduct an initial distribution (“Initial
7 Distribution”) of the Net Settlement Fund, after deducting all
8 payments approved by the Court, and after payment of any
9 estimated taxes, the costs of preparing appropriate tax returns,
10 and any escrow fees, while maintaining a 5% reserve to address
11 any tax liability and claims administration-related contingencies
12 that may arise, as follows:
13 (1) A.B. Data will calculate award amounts for all Authorized
14 Claimants as if the entire Net Settlement Fund were to be
15 distributed now. In accordance with the Court-approved
16 Plan of Allocation, A.B. Data will calculate each
17 Authorized Claimant’s pro rata share of the Net
18 Settlement Fund based on the amount of the Authorized
19 Claimant’s Recognized Claim in comparison to the total
20 Recognized Claims of all Authorized Claimants. See
21 Notice App. A ¶18.
22 (2) A.B. Data will, pursuant to the terms of the Plan of
23 Allocation, eliminate from the Initial Distribution any
24 Authorized Claimant whose pro rata share calculates to
25 less than $10.00. See id. ¶¶ 9, 19. These Claimants will not
26 receive any payment from the Net Settlement Fund and
27 will be so notified by A.B. Data.
28 (3) After eliminating Claimants who would have received less
-16- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 18 of 23 Page
ID #:2058
1 than $10.00, A.B. Data will recalculate the pro rata share
2 of the Net Settlement Fund for Authorized Claimants who
3 would have received $10.00 or more. A “Distribution
4 Amount” will be calculated for each of these Authorized
5 Claimants, which shall be the Authorized Claimant’s
6 Recognized Claim divided by the total Recognized Claims
7 of all Authorized Claimants who would have received
8 $10.00 or more, multiplied by the total amount in the Net
9 Settlement Fund. See id. ¶ 18.
10 (4) Authorized Claimants whose Distribution Amount
11 calculates to less than $200.00 will be paid their full
12 Distribution Amount in the Initial Distribution (“Claims
13 Paid in Full”). These Authorized Claimants will receive no
14 additional funds in subsequent distributions.
15 (5) After deducting the payments to the Claims Paid in Full,
16 95% of the remaining balance of the Net Settlement Fund
17 will be distributed pro rata to Authorized Claimants
18 whose Distribution Amount calculates to $200.00 or more.
19 The remaining 5% of the Net Settlement Fund will be held
20 in reserve (the “Reserve”) to address any tax liability and
21 claims administration-related contingencies that may arise
22 following the Initial Distribution. To the extent the
23 Reserve is not depleted, the remainder will be distributed
24 in the “Second Distribution” described in subparagraph (d)
25 below.
26 (b) To encourage Authorized Claimants to deposit their payments
27 promptly, all distribution checks will bear a notation: “CASH
28 PROMPTLY. VOID AND SUBJECT TO REDISTRIBUTION
-17- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 19 of 23 Page
ID #:2059
1 IF NOT CASHED BY [DATE 90 DAYS AFTER ISSUE
2 DATE].” For Authorized Claimants whose checks are returned
3 as undeliverable, A.B. Data will endeavor to locate new
4 addresses through reasonable methods. Where a new address is
5 located, A.B. Data will update the Settlement Database
6 accordingly and reissue a distribution check to the Authorized
7 Claimant at the new address. In the event a distribution check is
8 lost or damaged or otherwise requires reissuance, A.B. Data will
9 issue replacements. Distribution reissues will be undertaken only
10 upon written instructions from the Authorized Claimant,
11 provided that the Authorized Claimant returns the previous
12 check where appropriate. For all checks, A.B. Data will void the
13 initial payment prior to reissuing a payment. In order not to delay
14 further distributions to Authorized Claimants who have timely
15 cashed their checks, A.B. Data’s outreach program shall end
16 thirty (30) days after the initial void date. Authorized Claimants
17 will be informed that, if they do not cash their Initial Distribution
18 checks within ninety (90) days of the mail date, or they do not
19 cash reissued checks within thirty (30) days of the mailing, their
20 check will lapse, their entitlement to recovery will be irrevocably
21 forfeited, and the funds will be reallocated to other Authorized
22 Claimants. Reissue requests for lost or damaged checks will be
23 granted after the void date on the checks as long as the request
24 for the reissue is received no later than forty-five (45) days prior
25 to the next planned distribution. Requests for reissued checks in
26 connection with any subsequent distributions (should such
27 distributions occur) will be handled in the same manner.
28
-18- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 20 of 23 Page
ID #:2060
1 (c) Authorized Claimants who do not cash their Initial Distribution
2 checks within the time allotted or on the conditions set forth
3 above will irrevocably forfeit all recovery from the Settlement.
4 The funds allocated to all such stale-dated checks will be
5 available for distribution to other Authorized Claimants in the
6 Second Distribution. Similarly, Authorized Claimants who do
7 not cash their second or subsequent distribution checks, should
8 such distributions occur, within the time allotted or on the
9 conditions set forth above will irrevocably forfeit any further
10 recovery from the Net Settlement Fund.
11 (d) Consistent with the Court-approved Plan of Allocation, after
12 A.B. Data has made reasonable and diligent efforts to have
13 Authorized Claimants cash their Initial Distribution checks,
14 which efforts shall consist of the follow-up efforts described
15 above, but not earlier than seven (7) months after the Initial
16 Distribution, A.B. Data will, after consulting with Lead Counsel,
17 conduct a second distribution of the Net Settlement Fund (the
18 “Second Distribution”). See id. ¶ 20. Any amounts remaining in
19 the Net Settlement Fund after the Initial Distribution, including
20 from the Reserve and the funds allocated for all void stale-dated
21 checks, after deducting A.B. Data’s unpaid fees and expenses
22 incurred in connection with administering the Settlement,
23 including A.B. Data’s estimated costs of the Second Distribution,
24 and after deducting the payment of any estimated taxes, the costs
25 of preparing appropriate tax returns, any escrow fees, and
26 appropriate reserves, will be distributed to all Authorized
27 Claimants in the Initial Distribution (other than Claims Paid in
28 Full) who cashed their distribution checks and who would
-19- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 21 of 23 Page
ID #:2061
1 receive at least $10.00 in the Second Distribution based on their
2 pro rata share of the remaining funds. See id. Additional
3 distributions, after deduction of costs and expenses as described
4 above and subject to the same conditions, may occur thereafter
5 in six-month intervals until Lead Counsel, in consultation with
6 A.B. Data, determine that further distribution is not cost-
7 effective. See id.
8 (e) At such time as Lead Counsel, in consultation with A.B. Data,
9 determine that further distribution of the funds remaining in the
10 Net Settlement Fund is not cost-effective, if sufficient funds
11 remain to warrant the processing of Claims received after
12 November 28, 2022, those Claims will be processed, and any
13 otherwise valid Claims received after November 28, 2022, as
14 well as any earlier received Claims for which an adjustment was
15 received after November 28, 2022, that resulted in an increased
16 Recognized Claim, will be paid in accordance with subparagraph
17 (f) below. If any funds remain in the Net Settlement Fund after
18 payment of these late or late-adjusted Claims, the remaining
19 balance of the Net Settlement Fund, after payment of any unpaid
20 fees or expenses incurred in connection with administering the
21 Net Settlement Fund and after the payment of any estimated
22 taxes, the costs of preparing appropriate tax returns, and any
23 escrow fees, will be contributed to the Investor Protection Trust
24 (“IPT”), a non-sectarian, not-for-profit 501(c)(3) organization.
25 See id.
26 (f) No new Claims may be accepted after November 28, 2022, and
27 no further adjustments to Claims received on or before
28 November 28, 2022, that would result in an increased
-20- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 22 of 23 Page
ID #:2062
1 Recognized Claim may be made for any reason after November
2 28, 2022, subject to the following exception. If Claims are
3 received or modified after November 28, 2022, that would have
4 been eligible for payment or additional payment under the Plan
5 of Allocation if timely received, then at the time that Lead
6 Counsel, in consultation with A.B. Data, determine that an
7 additional distribution is not cost-effective as provided in
8 subparagraph (e) above, and after payment of any unpaid fees or
9 expenses incurred in connection with administering the Net
10 Settlement Fund and after deducting the payment of any
11 estimated taxes, the costs of preparing appropriate tax returns,
12 and any escrow fees, such Claimants, at the discretion of Lead
13 Counsel and to the extent possible, may be paid the distribution
14 amounts or additional distribution amounts on a pro rata basis
15 that would bring them into parity with other Authorized
16 Claimants who have cashed all their prior distribution checks.
17 (g) Unless otherwise ordered by the Court, A.B. Data may destroy
18 the paper copies of the Claims and all supporting documentation
19 one (1) year after the Initial Distribution, and one (1) year after
20 all funds have been distributed may destroy the electronic copies
21 of the same.
22 CONCLUSION
23 40. A.B. Data respectfully requests that the Court enter the Class
24 Distribution Order approving its administrative determinations accepting and
25 rejecting the Claims submitted herein and approving the proposed Distribution Plan.
26 A.B. Data further respectfully submits that its unpaid fees and expenses and its fees
27 and expenses expected to be incurred in connection with the Initial Distribution, as
28
-21- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS
Case 8:19-cv-02326-DOC-ADS Document 123 Filed 11/29/22 Page 23 of 23 Page
ID #:2063
1 reflected on the invoices attached hereto as Exhibit G, should be approved for
2 payment from the Settlement Fund.
3 I declare under penalty of perjury under the laws of the United States of
4 America that the foregoing is true and correct to the best of my knowledge.
5
6 Executed on November 29, 2022, at Palm Beach Gardens, Florida.
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________________________________
10 Eric J. Miller
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-22- DECLARATION OF ERIC J. MILLER
CASE NO. 8:19-cv-2236-DOC-ADS