Welcome to the CytRx Corporation Securities Litigation Settlement Website
This website has been established to provide general information regarding the proposed Settlement of the consolidated action entitled In re CytRx Corporation ("CytRx") Securities Litigation, No. 2:14-CV-01956-GHK-PJW, pending before the United States District Court, Central District of California (the "Action"). The capitalized terms used on this website and not defined herein shall have the same meanings ascribed to them in the Stipulation of Settlement dated December 8, 2015, which can be found and downloaded by clicking on the Case Documents tab above. Your rights may be affected by the Settlement if you purchased or otherwise acquired the publically-traded securities of CytRx Corporation between November 20, 2013 and March 13, 2014, inclusive ("Class Period").
The case concerns claims brought by investors alleging that the price of CytRx securities were artificially inflated during the Class Period as a result of alleged false and misleading statements and omissions by the CytRx Defendants during the Class Period concerning, inter alia, the Company’s relationship with a stock promotion firm called DreamTeam.
Beginning on March 14, 2014, putative class action complaints were filed in the Court against CytRx and certain of the other Defendants. On June 13, 2014, the Court issued an order consolidating the related actions, appointing Deepak Gupta as Lead Plaintiff and approving his selection of Kahn Swick & Foti, LLC as Lead Counsel.
On October 1, 2014, Lead Plaintiff filed his Consolidated Class Action Complaint for Violation of Federal Securities Laws (“Consolidated Complaint”). Lead Plaintiff asserted claims against the Defendants pursuant to §§10(b) and 20(a) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder, and §§11, 15 and 12(b) of the Securities Act of 1933 (the “Securities Act”). As to the Underwriters, the Consolidated Complaint only alleged claims under §§ 11 and 12(a)(2) of the Securities Act. On December 5, 2014 Defendants moved to dismiss the Consolidated Complaint. On July 13, 2015 the Court granted in part and denied in part the Consolidated Complaint and granted Lead Plaintiff leave to amend.
On August 7, 2015 Lead Plaintiff filed his First Amended Complaint for Violation of Federal Securities Laws (“FAC”) seeking to remedy the deficiencies the Court identified in its July 13, 2015 Order. On September 8, 2015 Defendants moved to dismiss the FAC. The same day, Lead Plaintiff filed a motion for reconsideration regrading whether certain Defendants “made” statements under the federal securities laws.
The case was settled during the pendency of Defendant’s motions to dismiss the FAC. The Parties engaged in mediation efforts with the assistance of an experienced mediator, the Hon. Dickran M. Tevrizian (Ret.), including a formal mediation session and the submission of detailed mediation briefs. The Parties reached an agreement to settle the Action on December 8, 2015.
Lead Counsel has conducted an extensive investigation into the claims and the underlying events and transactions alleged in the Action. Lead Counsel has also researched the applicable law with respect to the claims of Lead Plaintiff and the Class against Defendants, as well as the potential defenses thereto. In addition, Lead Counsel has conducted informal discovery in connection with the proposed Settlement. Based upon the foregoing, Lead Counsel has concluded that the terms and conditions of this Stipulation are fair, reasonable and adequate to Lead Plaintiff and the Class, and in their best interests, and, accordingly, Lead Plaintiff has agreed to settle the claims raised in the Action pursuant to the terms and provisions of this Stipulation, after considering (i) the substantial benefits that Lead Plaintiff and the members of the Class will receive from resolution of the Action as against the Defendants, (ii) the attendant risks of litigation, and (iii) the desirability of permitting the Settlement to be consummated as provided by the terms of this Stipulation. Defendants have denied and continue to deny that they have committed any act or omission giving rise to any liability and/or violation of law. Nonetheless, Defendants are entering into this Settlement to eliminate the burden and expense of further litigation and the risk of not prevailing at trial and, therefore, have determined that it is desirable that the Action fully and finally be settled in the manner and upon the terms and conditions set forth in the Stipulation.
The Class consists of all persons and entities who purchased or otherwise acquired the publicly traded securities of CytRx between November 20, 2013 and March 13, 2014, inclusive.
Subject to Court approval and, as described more fully in the Notice, Lead Plaintiff, on behalf of himself and the Class, has agreed to settle all Settled Claims (as defined in ¶31 in the Notice) against Defendants and the other Released Parties in exchange for a settlement payment of $8.5 million in cash and stock (the “Settlement Amount”) to be deposited into an escrow account (the Settlement Amount, plus any interest earned thereon, is referred to in the Notice as the “Settlement Fund”). The Net Settlement Fund (the Settlement Fund less Taxes, Notice and Administration Costs, and attorneys’ fees and Litigation Expenses awarded by the Court) will be allocated among members of the Class in accordance with a plan of allocation that is approved by the Court. Estimated Administration costs are not anticipated to exceed $250,000.
Although the information in this website is intended to assist you, it does not replace the information contained in the Notice of Pendency and Proposed Settlement of Class Action, Motion for Attorneys' Fees and Litigation Expenses, and Settlement Fairness Hearing ("Notice") and Stipulation of Settlement, both of which can be found and downloaded by clicking on the Case Documents tab above. We recommend that you read the Notice and other relevant case documents carefully.
YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT
|SUBMIT A CLAIM FORM BY JUNE 8, 2016
||This is the only way to be eligible to receive a payment from the Settlement. If you are a Class Member and you remain in the Class, you will be bound by the Settlement as approved by the Court and you will give up any Settled Claims (as defined in ¶31 in the Notice) that you have against Defendants and the other Released Parties (defined in ¶32 in the Notice), so, if you remain in the Class, it is in your interest to submit a Claim Form.
EXCLUDE YOURSELF FROM THE CLASS BY SUBMITTING A WRITTEN REQUEST FOR EXCLUSION SO THAT IT IS RECEIVED NO LATER THAN APRIL 18, 2016.
|If you exclude yourself from the Class, you will not be eligible to receive any payment from the Settlement Fund. This is the only option that potentially allows you to ever bring or maintain your own lawsuit against the Defendants or the other Released Parties, or to be part of another lawsuit, concerning the Settled Claims. See ¶¶40-41 in the Notice.
|OBJECT TO THE SETTLEMENT BY SUBMITTING A WRITTEN OBJECTION SO THAT IT IS RECEIVED NO LATER THAN APRIL 18, 2016.
||If you do not like the proposed Settlement, the proposed Plan of Allocation, Lead Counsel’s request for attorneys’ fees and expenses, and/or Lead Plaintiff’s request for reimbursement of expenses, you may write to the Court and explain why you do not like them. You cannot object to the Settlement, the Plan of Allocation or the fee and expense requests unless you are a Class Member and do not exclude yourself.
|GO TO THE HEARING ON MAY 9, 2016 AT 9:30 A.M., AND FILE A NOTICE OF INTENTION TO APPEAR SO THAT IT IS RECEIVED NO LATER THAN APRIL 18, 2016.
||Filing a written objection and notice of intention to appear by April 18, 2016 allows you to speak in Court about the fairness of the proposed Settlement, the Plan of Allocation, the requested Claims Administrator costs, Lead Counsel’s request for attorneys’ fees and expenses, and/or Lead Plaintiff’s request for reimbursement of expenses. If you submit a written objection, you may (but do not have to) attend the hearing and speak to the Court about your objection.
||If you are a member of the Class and you do not submit a Claim Form by June 8, 2016, you will not be eligible to receive any payment from the Settlement Fund. You will, however, remain a member of the Class, which means that you give up your right to sue about the claims that are resolved by the Settlement and you will be bound by any judgments or orders entered by the Court in the Action.