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In re Zulily, Inc. Litigation

United States District Court, W.D. Washington, Seattle

October 30, 2017

IN RE ZULILY, INC. LITIGATION

          ORDER PRELIMINARILY APPROVING SETTLEMENT, PROVIDING FOR NOTICE, AND SCHEDULING HEARING

          RICARDO S. MARTINEZ, CHIEF UNITED STATES DISTRICT JUDGE.

         This matter is before the Court on the motion by the plaintiffs in this consolidated action (the "Consolidated Federal Action"), Karan Jugal, Scott Mao and Patrick Pisano (collectively, the "Federal Plaintiffs"), for an order preliminarily approving the settlement of this matter, preliminarily certifying the class for purposes of the settlement only, and directing notice of the settlement to the class, as more fully described herein.

         The Federal Plaintiffs, individually and on behalf of the Class, along with plaintiffs in the Delaware Actions, Harry Jackson ("Jackson") and Krishna Mada ("Mada") (the "Delaware Plaintiffs, " and together with the Federal Plaintiffs, the "Plaintiffs"), on the one hand, and defendants zulily, inc. (now known as zulily, lie) ("ZU" or the "Company"), Darrell Cavens, Mark Vadon, W. Eric Carlborg, John Geschke, Mike Gupta, Youngme Moon, Michael Potter and Spencer Rascoff (the "Director Defendants"), and Liberty Interactive Corp., Mocha Merger Sub, Inc. and Ziggy Merger Sub, LLC (collectively, "Liberty") (all defendants named in the Consolidated Federal Action and the Delaware Actions, collectively "Defendants"), on the other hand, have entered into a proposed settlement of the Consolidated Federal Action and the Delaware Disclosure Claims in the Delaware Actions (the "Settlement"), the terms and conditions of which are set forth in the Stipulation and Agreement of Compromise, Settlement and Release, dated October 26, 2017 (the "Stipulation"), which is subject to review under Rule 23, Fed.R.Civ.P. ("Rule 23").

         The Court has reviewed and considered the Federal Plaintiffs' motion, the Stipulation, and all of the submissions and arguments presented with respect to the proposed Settlement.

         NOW, THEREFORE, IT IS HEREBY ORDERED:

         Preliminary Approval of the Settlement

         1. This order (the "Preliminary Approval Order") hereby incorporates by reference the definitions in the Stipulation, and all capitalized terms used herein shall have the same meanings as set forth in the Stipulation.

         2. Subject to further consideration at the Settlement Hearing as described below, the Court preliminarily finds the Settlement set forth in the Stipulation to be fair, just, reasonable, and adequate to the Class.

         Class Certification

         3. The Court provisionally certifies a mandatory non-opt-out class action, pursuant to Rules 23(a), 23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure, of all record and beneficial holders of ZU common stock (excluding Defendants and their respective affiliates) at any time during the period from and including August 16, 2015 through and including October 1, 2015, the effective date of the Tender Offer (the "Class Period"), including any and all of their respective successors in interest, predecessors, representatives, trustees, executors, administrators, heirs, assigns or transferees, immediate or remote, and any person or entity acting for or on behalf of, or claiming under any of them, and each of them (the "Class").

         4. Solely for purposes of the proposed Settlement, the Court finds and concludes that the prerequisites for class action certification under Rules 23(a), 23(b)(1) and 23(b)(2) of the Federal Rules of Civil Procedure have been satisfied for the Class defined in Paragraph 3 of this Order.

         5. Pursuant to Rule 23 of the Federal Rules of Civil Procedure, and for the purposes of the Settlement only, the Federal Plaintiffs are preliminarily certified as class representatives for the Class and Plaintiffs' Counsel is preliminarily appointed class counsel for the Class. Plaintiffs' Counsel is authorized to act on behalf of the Class with respect to all acts required by, or that may be undertaken pursuant to, the Stipulation or such other acts as are reasonably necessary to consummate the proposed Settlement set forth in the Stipulation.

         Settlement Hearing

         6. The Court will hold a settlement hearing (the "Final Approval Hearing") on March 6, 2018, at 9:00 a.m. for the following purposes: (i) to determine whether to grant final certification of the Consolidated Federal Action as a class action solely for purposes of the Settlement, pursuant to Rule 23; (ii) to determine whether the proposed Settlement of the Consolidated Federal Action on the terms and conditions provided for in the Stipulation is fair, reasonable, adequate and in the best interests of the Class and should be finally approved by the Court; (iii) to determine whether the Final Judgment, substantially in the form attached as Exhibit D to the Stipulation, should be entered dismissing and releasing the Released Claims (as that term is defined in the Stipulation) with prejudice; (iv) to rule upon the Federal Plaintiffs' Fee Application filed in accordance with Paragraph 10 of the Stipulation; and (vii) to consider any other matters that may properly be brought before the Court in connection with the Settlement.

         Manner of Notice

         7. Within twenty-one (21) calendar days after entry of this Order, the Company (or its successor-in-interest) shall cause a Notice of Class Action Proposed Settlement, Motion for Attorneys' Fees and Expenses, and Final Approval Hearing in substantially the form annexed as Exhibit C to the Stipulation (the "Notice") to be mailed by United States mail, postage prepaid, to all members of the Class as of the date of the consummation of the merger at their last known address appearing in the stock transfer records maintained by or on behalf of the Company. All record holders in the Class who, during the Class Period, were not also the beneficial owners of the shares of zulily common stock held by them of record shall be requested to forward the Class Notice to such beneficial owners of those shares. The Company (or its successor-in-interest) shall use reasonable efforts to give notice to such beneficial owners by: (a) causing additional copies of the Notice to be made available to any record holder who, prior to the Final Approval Hearing, requests the same for distribution to beneficial owners, or (b) causing additional copies of the Notice to be mailed to beneficial owners whose names and addresses the Company (or its successor-in-interest) receives from record owners prior to the Final Approval Hearing. The Company (or its successor-in-interest) shall be responsible for and shall pay all reasonable costs and expenses incurred in providing such Notice to the members of the Class. At least ten (10) business days before the Settlement Hearing, the Company shall file with the Court an affidavit evidencing the dissemination of the Notice to the Class.

         8. The Court approves the form and content of the Notice and finds that providing notice of the Settlement and the Final Approval Hearing in the manner set forth herein:

(i) constitutes the best notice practicable under the facts and circumstances of this action; (ii) is reasonably calculated, under the circumstances, to apprise the Class members of the proposed Settlement, the effect of the proposed Settlement (including the scope of the releases therein) and the Federal Plaintiffs' Fee Application; (iii) shall constitute due and sufficient notice of the proposed Settlement to the Class; and (iv) satisfies the requirements of Rule 23 of the Federal Rules of ...

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