Title: Kirkland v. WideOpenWest, Inc., No. 653248/2018
Court: Supreme Court of the State of New York, New York County
Date of Offering: May 25, 2017
Securities: WOW (NYSE)
Proposed Settlement Class: All Persons who purchased or otherwise acquired publicly listed or publicly traded shares of WideOpenWest, Inc. (“WOW”) common stock (ticker symbol: “WOW”) pursuant or traceable to the Offering Materials issued in connection with WOW’s IPO and were damaged thereby. Excluded from the Settlement Class, however, are: (a) Defendants, (b) the past and present officers and directors of any Defendant (including any subsidiary of WOW) (the “Excluded D&Os”), (c) the limited partners of any Defendant in their capacity as limited partners; (d) the heirs, immediate family members, successors or assigns of any Defendant or Excluded D&O, and any trust established or maintained for the benefit of any Defendant or Excluded D&O, and (e) any entity in which any Defendant or Excluded D&O has a controlling interest. Also excluded from the Settlement Class are any Persons who would otherwise be a Member of the Settlement Class, but who validly and timely request exclusion in accordance with the procedures to be established or approved by the Court in connection the approval of this Stipulation and the Settlement.
Wolf Popper LLP is co-lead counsel in a securities class action, brought in New York State Supreme Court, against defendants WOW, certain of its officers and directors, a private equity firm alleged to be a controller of WOW, and several financial institutions who acted as underwriters for WOW’s IPO. Wolf Popper represents the Employees’ Retirement System of the Puerto Rico Electric Power Authority in the litigation as a co-lead plaintiff.
On August 11, 2021, the Court issued a Decision and Order that preliminarily approved a settlement of the WOW securities class action in exchange for a payment of $7,025,000 in cash (the “Settlement Fund”). The Settlement provides that the Settlement Fund, after deduction of any Court-approved attorneys’ fees and expenses, notice and administration costs, awards to Lead Plaintiffs for their service on behalf of the Settlement Class or for Lead Plaintiffs’ reasonable time, costs and expenses directly relating to the representation of the Settlement Class, and taxes, is to be divided among Settlement Class Members who have a Recognized Loss and submit a valid Claim Form, in exchange for the Settlement of this case and the Releases by Settlement Class Members of claims related to the case.
The Court will hold a hearing on January 20, 2022 at 2:15 p.m. to consider whether to approve (a) the Settlement, (b) Lead Counsel’s request for an award of attorneys’ fees of up to 33% of the Settlement Fund, plus reimbursement of litigation expenses in an amount not to exceed $140,000, and (c) payments of up to $5,000 each to Lead Plaintiffs for their service on behalf of the Settlement Class or for Lead Plaintiffs’ reasonable time, costs and expenses directly relating to the representation of the Settlement Class. The Court may change the date and time of the Final Approval Hearing without notice or hold the Final Approval Hearing by telephone of video conference. Any change to the Final Approval Hearing will be posted on the settlement website.
The deadline for Settlement Class Members to request exclusion from the Settlement or object to the Settlement is December 29, 2021. The deadline for Settlement Class Members to submit a Claim Form for the Settlement is December 30, 2021.
More information about the Settlement, including copies of the Notice, the Claim Form, the Stipulation of Settlement, and other Court documents, is available at the settlement website: www.WideOpenWestSecuritiesSettlement.com.
The Amended Complaint alleges that the defendants violated Sections 11, 12, and 15 of the Securities Act of 1933 by making untrue statements of material fact in the Registration Statement and Prospectus issued in connection with WOW’s May 25, 2017 IPO, or omitting to state material facts required to be stated therein or necessary to make the statements therein not misleading.
On March 14, 2018, WOW issued its financial results for the fourth quarter and full fiscal year ended December 31, 2017. These results revealed a shocking decline in 2017 in WOW’s total revenue of approximately 4% on a year-over-year basis compared to 2016. WOW’s management acknowledged on the subsequent earnings call that “over the course of 2017, we fell short in some of our key operating and financial metrics and have not lived up to our long-held reputation of providing exceptional customer experiences,” and also disclosed that WOW’s failures would necessitate “investments of between $20 million and $25 million … in customer experience, customer acquisition and retention, products and services and, of course, our people.” WOW also announced that it had recorded a massive $147.4 million impairment charge to its indefinite-lived intangible assets and goodwill, which management claimed was primarily driven by WOW’s stock price decline. Two months later, on May 11, 2018, WOW announced that it had taken a further impairment charge of $256.4 million at the end of the first quarter of 2018 related to a decline in the value of franchise operating rights and goodwill in certain markets.
In response to its March 2018 disclosures, WOW’s stock plunged more than 23% on March 15, 2018 alone, falling to a closing price of $7.04 – nearly 59% below the IPO price of $17.00 per share.
The Amended Complaint alleges that the Registration Statement contained materially misleading statements and omissions concerning (i) WOW’s “technologically advanced platform,” and in particular, its much touted “Ultra DVR” product offering; (ii) WOW’s maintenance of its customer quality by using internal customer information, identification verification tools, and credit bureau data; (iii) the status of WOW’s build-out of its fiber network in Chicago; and (iv) WOW’s overstatement of its goodwill and franchise operating rights. On May 18, 2020, the Honorable Andrea Masley issued a Decision and Order denying, in substantial part, defendants’ motion to dismiss.
For further information about this case, contact:
Robert C. Finkel
Joshua W. Ruthizer
Philip M. Black