United States District Court, D. Nebraska
MICHAEL J. TRACY, an individual and Derivatively as a shareholder of Telemetrix and Convey; Plaintiff,
TELEMETRIX, Inc.; WILLIAM W. BECKER, LARRY BECKER, GAYLE BECKER, GARY BROWN, BECKER CAPITAL MANAGEMENT, LLC, GREEN EAGLE COMMUNICATIONS, INC., GREEN EAGLE NETWORKS, INC., DIANE LARKOWSKI, and MITCHELL BENNETT, Defendants.
FINDINGS AND RECOMMENDATION
R. Zwart United States Magistrate Judge
matter is before the court on parties stipulated motion to
approve settlement. (Filing No. 372). After
conducting a hearing today, (Filing No. 359), the
undersigned magistrate judge recommends that the terms of the
parties' proposed settlement (Filing No. 373-1)
parties have been litigating for years. In 2004, a Telemetrix
Shareholder's Agreement was executed - the result of
litigation with creditors of Telemetrix. Pursuant to the
Shareholder's Agreement, Plaintiff Michael J. Tracy lost
control of Telemetrix and became a minority shareholder.
Since assuming this status, Tracy has alleged various acts of
malfeasance on the part of the controlling shareholders.
above-captioned case was removed to this court on October 8,
2012. (Filing No. 1). The suit involves various
loans and the transfer of Telemetrix assets, including its
FCC broadcasting license. Plaintiff Tracy brought his claims
against all Defendants, both individually and derivatively on
behalf of Telemetrix. The crux of the case is based on
allegations that Defendants mismanaged and defrauded
Telemetrix for the benefit of the individual defendants and
the defendant companies. Plaintiff's operative complaint
seeks recovery under the Racketeer Influenced and Corrupt
Organizations (“RICO”) Act and on common law
theories of conversion, civil conspiracy, breach of fiduciary
duty, unjust enrichment, an accounting, and constructive
trust against Telemetrix and numerous officers, directors,
and managers of Telemetrix. (See Filing No.
engaging in extensive motion practice and discovery, the
parties participated in mediation at least twice with the
assistance of a highly experienced mediator. These attempts
at settlement were unsuccessful, but the parties continued to
about December 9, 2016, the parties reached a settlement of
all claims. (Filing No. 373-1). Among other things,
the parties agreed as follows:
1. Pending this Court's approval, and in exchange for
Green Eagle's agreement to pay Plaintiff the principal
sum of $800, 000, Plaintiff will (a) assign all Telemetrix
stock owned by Plaintiff to a holding company and (b) will
dismiss, with prejudice, his direct claims asserted in this
2. Pending this Court's approval, Plaintiff will
voluntarily dismiss, with prejudice, his derivative claims.
(Filing No. 373 at CM/ECF p. 6).
the court's approval, notice of the foregoing settlement
was published in the Omaha World-Herald and the Daily Record
once a week for three consecutive weeks (on September 25,
2017, October 2, 2017, and October 9, 2017). (Filing No.
376). The notice stated the material terms of the
settlement, advised that any objections must be made on or
before November 13, 2017, and stated that the hearing for
court approval of the settlement was scheduled for November
16, 2017 at 12:00 p.m. in Courtroom 2 at the United States
District Courthouse in Lincoln, Nebraska. (Filing No.
376, at CM/ECF p. 3).
objections to the settlement were timely received prior to
the hearing. The hearing was held today as scheduled. Counsel
for the parties appeared telephonically. No one else attended
the hearing or raised any objection to the settlement.
will approve derivative settlements only if they are fair,
reasonable, and adequate. Weiner v. Roth, 791 F.2d
661, 662 (8th Cir. 1986). The court's role is to
“determine whether the proponents of the settlement
have shown that it fairly and adequately serves the interests
of the corporation on whose behalf the derivative action was
instituted.” Republ ...