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Case: 1:94-cv-00002-TMR Doc #: 563 Filed: 02/24/04 Page: 1 of 5 PAGEID #: 878







STAR BANK, N.A., et al.,



Case No. C-1-94-0002

Judge Thomas M. Rose

Magistrate Judge Michael Merz



Plaintiffs, forty-four participants and the Trustee of the Electro-Jet Tool & Mfg. Co., Inc.

Employee Stock Ownership Plan, and Defendants, William N. Kirkham, Lindhorst & Dreidame

Co., L.P.A., Gradison & Company, Inc., Star Bank, N.A., John Endres, Joyce Richter, Laura

Gerding and Paul Weber, and Third-Party Defendants, Thomas A. Simons, Jr. and Graydon

Head & Ritchey (all of the foregoing collectively referred to as the “Settling Parties”), by their

undersigned counsel, pursuant to Rule 23.1 of the Federal Rules of Civil Procedure, jointly move

this Court for preliminary approval of the settlement agreement entered into by the Settling

Parties. In support of this joint motion, the Settling Parties submit the accompanying



At a lengthy Court-ordered mediation session held on February 16, 2004, and with the

able assistance of Magistrate Judge Michael Merz, a settlement was reached in this ten-year-old

lawsuit. The parties have executed a certain Settlement Agreement1, which bears an effective

1 The majority of the parties have already executed the Settlement Agreement. The remaining few that have not yet
signed have committed to do so and counsel expect to have all parties’ signatures by the time of the upcoming hearing.

Case: 1:94-cv-00002-TMR Doc #: 563 Filed: 02/24/04 Page: 2 of 5 PAGEID #: 879

date of February 25, 2004, and is attached in full as Exhibit 1. The Settlement Agreement

constitutes a good faith compromise of disputed claims, and was the product of arms-length

bargaining. As discussed further below, Plaintiffs and their counsel believe that this settlement is

fair, reasonable, adequate and in the best interests of the Electro-Jet Tool & Mfg. Co., Inc.

Employee Stock Ownership Plan (the “Plan”) and its participants. Accordingly, the Settling

Parties jointly request that this settlement be approved.

The principal terms of the Settlement Agreement, which requires Court approval pursuant

to Rule 23.1, are as follows: the Settling Defendants/Third-Party Defendants shall pay the total

sum of Fourteen Million Three Hundred Thirty-Four Thousand and Seventy Dollars

($14,334,070.00) to the Plan. (See, Settlement Agreement, at ¶ 2) Defendants Weber and

Gerding shall forfeit their entire account balances in the Plan as of February 25, 2004, and shall

be considered former participants that are not entitled to share in the proceeds of the Settlement

Agreement. (See, Settlement Agreement, at ¶ 6) The Settling Parties will mutually release each

other (See, Settlement Agreement, at ¶ 5) and dismiss with prejudice all pending claims in this

action except for Plaintiffs’ claim against Defendant Hare. (See, Settlement Agreement, at ¶

1(B)) The Final Approval Order will contain a Rule 54(b) finding, such that the pending claim

against Hare will not delay the finalization and consummation of the settlement. (See,

Settlement Agreement, at Exhibit C)2

Plaintiffs and their counsel believe that the Settlement Agreement is fair, reasonable and

in the best interests of the Plan and its participants. As this Court is well aware, the claims in this

case were vigorously contested by all of the Settling Defendants/Third-Party Defendants (all of

2 The Settling Defendants/Third-Party Defendants have also agreed to withdraw their objections to Plaintiffs’ pending
motion to default Hare (Doc. 544) on the condition that the default order includes an order barring Hare from asserting
any claims against the Settling Parties which arise from or relate in any way to this lawsuit. (See, Settlement Agreement,
at ¶ 10) Hence, upon entry of the default order as to Hare, the only remaining proceedings in this case will involve
Plaintiffs proving up their damages against Hare and obtaining a default judgment. Upon that event, all claims in this
case shall be fully resolved and disposed of.


Case: 1:94-cv-00002-TMR Doc #: 563 Filed: 02/24/04 Page: 3 of 5 PAGEID #: 880

whom, as is their right, continue to deny liability). While the monetary amount of the settlement

is less than Plaintiffs would have sought in damages at trial, it is more than the amount of

damages the Defendants have contended would have been recoverable even if Defendants were

found liable. The payment amount in the Settlement Agreement can also be viewed as

reasonable and fair, in that the $14.334 million settlement recovery by the Plan is greater than the

amount two experts in this litigation (Plaintiffs’ expert Pipich, and Star’s expert Rolfes) opined

would now be in the Plan had this ESOP transaction never occurred.

The settlement approval process contemplated by the Settlement Agreement is as

follows: upon the Court’s entry of the Preliminary Approval Order (Exhibit A to the Settlement

Agreement), the Notice of Proposed Settlement and Hearing Thereon (the “Notice,” Exhibit B to

the Settlement Agreement) will be sent to the 69 participants in the Plan who did not join as

Plaintiffs (the “Non-Plaintiff Participants”). The Notice will advise the Non-Plaintiff

Participants of the terms of the settlement, of their right to file written objections (no less than

ten days prior to the final approval hearing) and of the date, time and place of the final approval

hearing. At the final approval hearing, the Settling Parties will request that this Court enter the

Final Approval Order and Judgment of Partial Dismissal (Exhibit C to the Settlement

Agreement). Plaintiffs request that the Court schedule the final approval hearing in late March,

2004 -- within 30 days of the entry of the Preliminary Approval Order.

Based upon the above, the Settling Parties jointly request that this Court grant

preliminary approval to the Settlement Agreement, enter the Preliminary Approval Order in the


Case: 1:94-cv-00002-TMR Doc #: 563 Filed: 02/24/04 Page: 4 of 5 PAGEID #: 881

form attached as Exhibit A to the Settlement Agreement, and schedule a date for the final

approval hearing.

Dated: February 24, 2004

s/Charles J. Faruki (per auth. 2/24/04)

Charles J. Faruki

Mary L. Wiseman

Faruki Ireland & Cox P.L.L.

500 Courthouse Plaza, S.W.
10 North Ludlow Street

Dayton, Ohio 45402

Attorneys for Defendants

William N. Kirkham and

Lindhorst & Dreidame Co., L.P.A.

s/James E. Burke (per auth. 2/24/04)
James E. Burke

Keating, Muething & Klekamp, LLP
1400 Provident Tower

One East Fourth Street
Cincinnati, Ohio 45202

Attorneys for Defendant Gradison &
Company, Inc.

s/Thomas R. Schuck (per auth. 2/24/04)
Thomas R. Schuck
Marcia V. Andrew
Taft, Stettinius & Hollister LLP
425 Walnut Street, Suite 1800
Cincinnati, Ohio 45202
Attorneys for Defendant
Star Bank, N.A.

Respectfully submitted,

s/Michael D. Hayes
Norman B. Berger
Michael D. Hayes
Varga Berger Ledsky Hayes & Casey
A Professional Corporation
224 South Michigan Avenue
Suite 350
Chicago, Illinois 60604
Attorneys for all Plaintiffs

s/Judith Boyers Gee (per auth. 2/24/04)
Judith Boyers Gee
533 Pike Street
Suite 204
Covington, Kentucky 41011
Attorney for the Plaintiff Participants

s/Jeffrey R. Dundon (per auth. 2/24/04)
Jeffrey R. Dundon
156 East Spring Valley Road
Centerville, Ohio 45458
Attorney for the Plaintiff Trustee


Case: 1:94-cv-00002-TMR Doc #: 563 Filed: 02/24/04 Page: 5 of 5 PAGEID #: 882

s/Robert A. Pitcairn, Jr. (per auth. 2/24/04)
Robert A. Pitcairn, Jr.
Katz, Teller, Brant & Hild
255 East Fifth Street, Suite 2500
Cincinnati, Ohio 45202
Attorney for Defendant Paul Weber

s/David C. Greer (per auth. 2/2/4/04)

David C. Greer

Joseph C. Oehlers

Bieser, Greer & Landis
400 National City Center

6 North Main Street

Dayton, Ohio 45402
Attorneys for Third-Party
Defendants Thomas A. Simons, Jr.
and Graydon Head & Ritchey

s/John W. Hust (per authority 2/2/4/04)
John W. Hust
Schroeder, Maundrell, Barbiere
& Powers
11935 Mason Road, Suite 110
Cincinnati, Ohio 45249
Attorney for Defendants
John Endres and Joyce L. Richter


I hereby certify that on February 24, 2004, I electronically filed the foregoing Joint

Motion for Preliminary Approval of Settlement Agreement and Memorandum in Support

with the Clerk of the Court using the CM/ECF system, which will result in notification of such

filing to be electronically sent to counsel of record for each of the parties in this matter entitled to

notice. As there is no known address for Defendant Hare, notice is not being sent to him.

s/ Michael D. Hayes