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Welcome to the Luminent Mortgage Capital,
Inc, Securities Litigation website.
Claims Administrator
Luminent Mortgage Capital, Inc. Securities Litigation
c/o Complete Claim Solutions, LLC
P.O. Box 24765
West Palm Beach, FL 33416
1-800-771-4781
info@LuminentSecuritiesSettlement.com
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Plaintiff’s Lead Counsel
Lowey Dannenberg Cohen & Hart, P.C.
Richard W. Cohen
Barbara J. Hart
David C. Harrison
One North Broadway, Suite 509
White Plains, NY 10601
dharrison@lowey.com
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The following is a summary of information presented in
more detail in the Notice of Class Action Certification, Proposed Settlement, Motion
for Attorneys’ Fees and Expenses and Hearing Thereon (the "Notice"), which Class
Members should have received in the mail, and which you can access by clicking on
the box with that name to the left. Since this is just a summary, you should see
the full Notice for additional details.
Please read this information carefully. If you are a
Settlement Class Member (as defined below), your rights will be affected by these
proceedings and you may be entitled to receive benefits under a proposed $8.0 million
class action settlement.
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All Persons Who Purchased or Otherwise Acquired Publicly Traded Luminent Mortgage
Capital, Inc. Securities or Call Options on Publicly Traded Luminent Securities,
or Sold or Otherwise Disposed of Put Options on Publicly Traded Luminent Securities,
During the Period From February 9, 2007 Through August 6, 2007, Inclusive.
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Securities Brokers and other Nominees: Please see instructions on page 8 of
the Notice.
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Settlement Fairness Hearing
The Court will hold a Settlement Fairness
Hearing at 9:00 am on April 29, 2009 before the Honorable Phyllis J. Hamilton,
in the United States District Court for the Northern District of California, Courtroom
3, 17th Floor, United States Courthouse, 450 Golden Gate Avenue, San Francisco,
California 94102, to determine:
- (a) Whether the proposed Settlement is fair, reasonable
and adequate and should be approved by the Court;
- (b) Whether the proposed Plan of Allocation for distributing
the Settlement to Class Members is fair and reasonable and should be approved; and
- (c) Whether the application by Lead Counsel for an award
of attorneys’ fees and reimbursement of litigation expenses should be approved.
The issuance of the Notice is not an expression of the
Court’s opinion on 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,
payment will be made after all appeals, if any, are resolved and after the completion
of all claims processing. Please be patient.
What is this case about?
Defendant Luminent is a publicly traded real estate investment
trust which invested primarily in assets secured by residential real estate mortgages.
On August 6, 2007, Luminent announced that contrary to certain prior assurances
about the Company’s ample liquidity and its intention to pay a dividend for the
June 2007 quarter, it was suspending its dividend and was facing a liquidity crisis.
Luminent’s stock price immediately dropped 85% over the next two days, closing at
$0.95 on August 8, 2007, the day the dividend was supposed to have been paid. On
September 5, 2008, Luminent filed for Bankruptcy protection in the United States
Bankruptcy Court for the District of Maryland.
A Consolidated Class Action Complaint (“Complaint”) was
filed on February 15, 2008 on behalf of investors in Luminent common stock and options.
The Complaint alleges violations of Section 10(b) of the Securities Exchange Act
and Securities Exchange Commission Rule 10b 5 against Luminent and its top executives,
and violations of Section 20(a) of the Securities Exchange Act against those individual
defendants.
The Complaint alleges that defendants made misleading
statements regarding Luminent’s financial condition and performance, including specifically
its liquidity, the quality of its mortgage-backed securities (“MBS”) portfolio,
and the safety of its dividend for the second quarter of 2007, payable August 8,
2007, which artificially inflated the market price of Luminent securities. The Complaint
alleges that defendants knowingly or recklessly failed to disclose adverse facts,
including margin calls on its MBS portfolio, a write-down of its portfolio and significant
exposure to subprime debt, all of which negatively impacted the Company’s liquidity.
On March 31, 2008, defendants moved to dismiss the Complaint.
Lead Plaintiff filed their opposition to defendants’ motion to dismiss on June 5,
2008. Lead Plaintiff and Luminent reached an agreement to settle the case before
the Court decided the motion to dismiss.
Instead of litigating the Action through trial,
Lead Plaintiff and the defendants, after arm’s length negotiations supervised by
an experienced mediator, have agreed to a compromise of the claims for $8.0 million
in cash to be paid by the insurance carrier for Luminent and its directors and officers
(“D&O Policy”).
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IMPORTANT DATES & DEADLINES |
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File a Proof of Claim:
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Postmarked not later than June 9, 2009 |
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Request an Exclusion: |
Received not later than April 9, 2009 |
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File an Objection: |
Received on or before April 9, 2009 |
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Settlement Fairness Hearing:
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April 29, 2009 at 9:00 a.m. in the United States District Court for the Northern
District of California |
Terms of the Settlement
The defendants, through their insurance carrier, have
paid $8.0 million into an escrow account that is earning interest for the benefit
of the Settlement Class. Defendants have also paid $100,000 for the costs of the
notice to Class Members and for costs to administer the Settlement. The balance
of this fund, after payment of court-appointed attorneys’ fees and expenses, taxes,
and the costs of claims administration, including the costs of printing and mailing
the Notice and the cost of publishing newspaper notice, will be divided among all
Settlement Class Members who submit valid claim forms.
The Claims Administrator shall determine each Authorized
Claimant’s pro rata share of the distribution based upon each Authorized Claimant’s
“Recognized Claim” from transactions on publicly traded Luminent securities during
the entire Class Period. The Recognized Claim formulas, which are set forth at pages
9 – 11 of the Notice, are not intended to be an estimate of the amount that a Class
Member might have been able to recover after a trial; nor is the Recognized Claim
an estimate of the amount that will be paid to Authorized Claimants pursuant to
the Settlement. The Recognized Claim formulas are the basis upon which the distribution
will be proportionately allocated to the Authorized Claimants. (See the Plan of
Allocation beginning on page 9 of the Notice for more information.
The Rights of the Settlement Class Members
If you are a Settlement Class Member, you have the following
options:
- FILE A PROOF OF CLAIM – To qualify for a payment, you must timely send
in a completed Proof of Claim form with supporting documents (DO NOT SEND ORIGINALS)
to the Claims Administrator. At the link on the left, you may get a Proof of Claim
form. Please read the instructions carefully, fill out the Proof of Claim form,
include all the documents the form asks for, sign it, and mail it to the Claims
Administrator by first class mail, postmarked not later than June 9, 2009. The Claims
Administrator needs all of the information requested in the Proof of Claim in order
to determine what you may be entitled to.
- EXCLUDE YOURSELF FROM THE CLASS – You get no payment. This is the only option
that might allow you to bring an individual lawsuit against the defendants asserting
the legal claims being released in this case, if you have a valid and timely claim.
A written request for exclusion from the Settlement Class, must be received no later
than April 9, 2009, addressed to Luminent Mortgage Capital, Inc. Securities Litigation,
c/o Complete Claim Solutions, LLC, P.O. Box 24765, West Palm Beach, FL 33416.
In order to be valid, each request for exclusion must: (a) include the name, address,
and telephone number of the person(s) requesting exclusion; (b) include identification
of each of the person’s purchases and sales of publicly traded Luminent securities
made during the Settlement Class Period, including the dates of purchase or sale,
the number of shares or call options purchased and/or put options sold, and the
price paid or received per security for each such purchase or sale; (c) provide
proper evidence of the person’s purchases and sales of Luminent securities during
the Settlement Class Period; and (d) state that the person wishes to be excluded
from the Settlement Class. No request will be considered valid unless all of the
information described above is included in the request. You may not exclude yourself
by telephone or e-mail.
- Unless you exclude yourself, you are a member of the Settlement Class. That means
that, in exchange for your share of the settlement payment, you will give up and
release any claims you might have against defendants relating to any of the claims
brought by Lead Plaintiff in this Action. It also means that all of the Court’s
orders will apply to you and legally bind you. If you sign the Proof of Claim and
Release form, you will agree to a “Release of Claims,” attached to the Proof of
Claim form, which describes exactly the legal claims that you give up if you stay
in the Settlement Class.
OBJECT – You may write to the Court if you do not like any part of it. In
order for the Court to consider your objection, you must be a Settlement Class Member
who does not seek to be excluded from the Class, and you must send a written statement
which must be received on or before April 9, 2009, to the Court and counsel at the
addresses listed on page 8 of the Notice, saying that you object to the Settlement
in In re Luminent Mortgage Capital, Inc. Securities Litigation, No. C 07-04073 (PJH).
The written objection may be by an informal letter or any other format. Class members
do not need to hire an attorney in order to file any objections. The objection should
include (a) your name, address and telephone number, your signature(s), (b) the
number of shares or call options purchased and/or put options sold from February
9, 2007 through August 6, 2007, (c) the reasons you object to the Settlement, (d)
copies of any papers, briefs, or other documents upon which the objection is based,
and also (e) advise the Court if you intend to appear at the Settlement Fairness
Hearing, and if you will be represented by counsel, the names and address of your
attorneys.
Further Information
Further information regarding the Litigation, the Notice
and how to file your claim may be obtained by contacting the Claim Administrator
or reading through the Notice and Proof of Claim links at the left. You may also
contact Class Counsel at the address listed above.
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