Orrstown Securities Settlement Frequently Asked Questions

The Court directed that the Notice be sent to you because you, someone in your family, or an investment account for which you serve as a custodian, may have purchased or otherwise acquired Orrstown common stock during the Class Period, from March 15, 2010 through, and including, April 26, 2012 (“Class Period”). The Court directed that the Notice be sent to you because, as a potential Class Member, you have the right to know about the proposed Settlement, about all of your options, and how the lawsuit and Settlement may generally affect your legal rights, before the Court decides whether to approve the Settlement.  If the Court approves the Settlement, the Settlement will end all of the Class’s and Class Members’ claims against the Defendants. 

The Court will consider whether to approve the Settlement at a Settlement Hearing on May 19, 2023, at 10:00  a.m. If the Court approves the Settlement, and after any appeals are resolved and the Settlement administration is completed, the Claims Administrator appointed by the Court will make the payments that the Settlement allows.

The entity who filed the lawsuit is called a “Plaintiff” and the entities and others sued are called “Defendants.” On May 25, 2012, the Plaintiff, a purchaser of Orrstown Financial Services, Inc. common stock, commenced this Action by filing a complaint with the Court, on behalf of itself and a proposed class of purchasers of Orrstown Financial Services, Inc. common stock.

Plaintiff’s claims in the Action are set forth in the Third Amended Complaint (“TAC”) filed as of February 14, 2020. Generally, the Action alleges that Orrstown Financial Services, Inc.’s (the “Company”) filings with the SEC, which include filings in March 2010 for its $45 million public offering of 1.7 million shares of its common stock at $27 per share (“Offering Documents”), and the Company’s periodic, quarterly, and annual SEC reports beginning with the Company’s Form 10-K annual report for the fiscal year 2009 (the “Reports”): (a) contained materially false and misleading statements about the Company’s loan portfolio, its financial condition, and whether it had taken adequate reserves to cover loan losses; (b) concealed the Company’s failures of internal controls over financial reporting; and, (c) included false and misleading audit opinions.

During an October 5, 2022 Court-scheduled status conference, the Parties informed the Court that they were re-engaging in settlement discussions with the aid of Mr. Meyer; and, conferring regarding a proposed case schedule to set deadlines for key events through the date of trial. The Parties then separately engaged with Mr. Meyer to discuss their respective positions, and on October 28, 2022 the Parties participated in a scheduled all-day mediation session with Mr. Meyer, which concluded without a settlement-in-principle, but the Parties agreed to continue discussing a potential resolution with Mr. Meyer’s assistance. In early November 2022, Mr. Meyer presented the Parties with a mediator’s proposal to assist them in forging an agreement-in-principle to resolve the Action. The parties accepted the mediator’s proposal, and on November 7, 2022 the Parties executed a memorandum of understanding, which set forth their agreement-in-principle to resolve and settle the Action in exchange for a total payment of $15 million to the Class, inclusive of fees and costs. The Parties then negotiated the terms of the Settlement and Stipulation and Agreement of Settlement, (the “Stipulation”).

The plaintiff alleges that between March 10,2010 and April 26, 2012, Orrstown failed to disclose important information to shareholders which negatively impacted the stock price and harmed investors.  The full details of the allegations can be found in the Notice, which can be found on this website.  If you purchased stock between March 15, 2010 through, and including, April 26, 2012, you are potentially eligible to participate in the settlement.

The Court has issued an Order, for the purposes of the Settlement only, that everyone who fits the following description, and is not excluded by definition from the Class, is a member of the Class, or a “Class Member,” unless they take steps to opt out and exclude themselves:

In the Settlement, Defendants have agreed to pay and/or cause to be paid $15 million in cash, which will be deposited in the Settlement Fund, which is an interest-bearing escrow account for the benefit of the Class (the “Settlement Fund”). If the Settlement is approved by the Court and the Effective Date occurs, after the deduction from the Settlement Fund of (i) all Court-awarded attorneys’ fees, litigation expenses, and any interest thereon; (ii) Notice and Claims Administration Expenses; (iii) Taxes and Tax Expenses; and (iv) any other Court-approved fees, expenses or deductions, the Net Settlement Fund will be divided among all Class Members who timely submit valid Proofs of Claim that are accepted for payment and pursuant to the terms of the Stipulation and Plan of Allocation (“Authorized Claimants”), which is discussed in Section 8 of the Notice.

Unless you submit a valid and timely request for exclusion, you will stay in the Class, which means that if the Settlement becomes effective under the terms of the Stipulation (the “Effective Date”), you and your “Plaintiff’s Released Parties " shall have, fully, finally, and forever compromised, settled, released, resolved, relinquished, waived and discharged each and every Released Plaintiff’s Claim including Unknown Claims against Defendants’ Released Parties, and shall forever be barred and enjoined from commencing, instituting, prosecuting, or maintaining any and all of the Released Claims against any of the Defendants’ Released Parties in any jurisdiction. This means that You and your Plaintiff’s Released Parties will not in the future be able to bring a case asserting any Released Claim against any Released Party. In turn, the Stipulation also provides that upon the Effective Date, Defendants shall have, fully, finally, and forever compromised, settled, released, resolved, relinquished, waived and discharged each and every Released Defendants’ Claim including Unknown Claims against Plaintiff’s Released Parties, and against each other, and shall forever be barred and enjoined from commencing, instituting, prosecuting, or maintaining any and all of the Released Claims against any of the Plaintiff’s Released Parties and against each other in any jurisdiction.

In order to qualify for a payment, you must be a member of the Class and timely complete and return a valid Proof of Claim with adequate supporting documents submitted online or postmarked no later than June 22, 2023. A Proof of Claim Form can be found on this website. If you prefer, you may download a copy of the claim form to fill out by hand. The form must be postmarked, (if mailed) or received online no later than June 22, 2023. 

Any Class Member who fails to submit a Proof of Claim by the date identified above shall be barred from receiving any distribution from the Net Settlement Fund or payment pursuant to this Settlement unless, by order of the Court or the discretion of Lead Counsel, late-filed Proofs of Claim are accepted, but shall in all other respects be bound by all terms of the Stipulation and Settlement, including the terms of the Judgment and all releases provided for herein and therein, and will be permanently barred and enjoined from bringing any action, claim or other proceeding of any kind against any Released Party concerning the Released Claims. 

The Court will hold the Settlement Hearing on May 19, 2023 at 10 A.M. to decide whether to approve the Settlement and Plan of Allocation, and no payment will be made unless the Court approves the Settlement and the Effective Date occurs.

At this time, it is not possible to make any determination as to how much any individual Class Member may receive from the Settlement. The Plan of Allocation explains how the Net Settlement Fund will be allocated among purchasers and/or acquirers of Orrstown Financial Services, Inc. common stock (“Orrstown Stock”) and how Authorized Claimants’ “Recognized Claims” will be calculated. Your share of the Net Settlement Fund will depend on several factors, including when you bought and sold your Orrstown Stock and how much you paid. It is unlikely that you will receive payment for your entire Recognized Claim, given the number of potential Class Members. After all Class Members have sent in their Proofs of Claim, the payment any Authorized Claimant will get will be their pro rata share of the Net Settlement Fund based on the Plan of Allocation approved by the Court. The Court may approve the Plan of Allocation as proposed or it may modify it without further notice to the Class. Any Orders regarding any modification of the Plan of Allocation will be posted on this website.

To “opt out” (exclude yourself) from the Class, you must deliver or mail a written and signed request for exclusion (“Request for Exclusion”) by First-Class Mail stating that you: “request exclusion from the Class in Southeastern Pennsylvania Transportation Authority, et al., v. Orrstown Financial Services, et al, Civil Action No. 1:12-cv-00993 (M.D. Pa.).” Your Request for Exclusion must also state (a) the name, address, and telephone number of the Person requesting exclusion; and (b) information on the Person’s purchases, acquisitions and sales of Orrstown common stock during the Class Period, with supporting documentation for the Person’s transactions in Orrstown common stock reported therein, such as broker confirmation slips, broker account statements, an authorized statement from the broker containing the transactional information found in a broker confirmation slip, or such other documentation as is deemed adequate by Lead Counsel. This information is needed to determine whether you are a Class Member. 

You must submit your Request for Exclusion addressed to Orrstown Securities Settlement, c/o Kroll Settlement Administration, EXCLUSIONS, PO Box 5324, New York, NY 10150-5324.  The Request for Exclusion must be postmarked on or before April 28, 2023.   You cannot exclude yourself after that date and cannot exclude yourself or opt out by telephone or by email. 

The Request for Exclusion shall not be effective and valid unless it provides the required information and is made within the time stated above, or the exclusion is otherwise accepted by the Court. Your request for exclusion must comply with these requirements in order to be valid.  If you are excluded, you will not be eligible to get any payment from the Settlement proceeds and you cannot object to the Settlement, the proposed Plan of Allocation or the application for attorneys’ fees and expenses. Any Person who submits a valid and timely Request for Exclusion may, at any point up to five (5) calendar days before the Settlement Hearing, submit a written revocation of their Request for Exclusion following the same instructions as above. Defendants have the right to terminate the Settlement if timely and valid Requests for Exclusion are received from Class Members in an amount that exceeds an amount agreed to by the Lead Plaintiff and Defendants.

No. Unless you exclude yourself, you give up any rights you or the Releasing Plaintiff Parties may have to sue Defendants and other Released Parties for all Released Claims, and you will be bound by all determinations and judgments in this Action, whether favorable or unfavorable.

The Court appointed the law firm of Chimicles Schwartz Kriner & Donaldson-Smith LLP as Lead Counsel to represent all Class Members. You will not be separately charged for the services of these lawyers. The Court will determine the amount of Lead Counsel’s fees and expenses, and any such fees and expenses awarded by the Court will be paid from the Settlement Fund.  If you want to be represented by your own lawyer, you may hire one at your own expense.

Lead Counsel have not received any payment for their services, nor have they been paid or reimbursed at this point for any of their Litigation expenses. Lead Counsel will ask the Court to award them, from the Settlement Fund, attorneys’ fees of up to thirty-five percent (35%) of the Settlement Amount, plus Litigation expenses they have incurred in an amount not to exceed $800,000, plus interest on both amounts from the date of funding at the same rate earned by the Settlement Fund. The Court will determine the amount of any award of attorneys’ fees or reimbursement of litigation expenses, and such sums as may be approved by the Court will be paid from the Settlement Fund.

If you are a Class Member and do not exclude yourself (“opt out”), you can object to any part of the Settlement, the Plan of Allocation, or Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of Litigation expenses. Unless the Court orders otherwise, any Class Member who does not object in the manner described here will be deemed to have waived any objection and shall forever be foreclosed from making any objection to the Settlement, Plan of Allocation or Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of Litigation expenses.

The objection must be in writing and must: (i) state the name, address, and telephone number of the objector and must be signed by the objector (even if the objector is represented by counsel); (ii) state whether the objector is a Class Member; (iii) include documents sufficient to prove the objector’s membership in the Class, such as documents sufficient to show the number of Orrstown Financial Services, Inc. common shares purchased or acquired during the Class Period, as well as the dates and prices of each such purchase or acquisition; (iv) state what the objector is objecting to, such as the proposed Settlement, the Plan of Allocation, or Plaintiff’s Fee and Expense Application; (v) state the objection(s) and the specific reasons for each objection, including legal and evidentiary support the objector wishes to bring to the Court’s attention; (vi) state with specificity whether the objection applies only to the objector, to a specific subset of the Class, or to the entire Class; (vii) state whether the objector is represented by counsel; and (viii) identify any other class actions to which either the objector or their counsel has previously objected within the preceding five years. 

Your written objection, including copies of any papers and briefs in support of such objections, must be both: (i) filed with the Court by hand or by mail such that it is received (not just postmarked) on or before April 28, 2023 by the Clerk’s Office at the address below; and, (ii) served on Lead Counsel and Orrstown’s Counsel at the below addresses, so that the papers are received (not just postmarked) on or before April 28, 2023.

The Court will hold a Settlement Hearing at 10:00 a.m., on May 19, 2023, before the Honorable Yvette Kane, United States District Judge, at the United States District Court for the Middle District of Pennsylvania, Sylvia H. Rambo United States Courthouse, 1501 N 6th St, Harrisburg, PA 17102, to determine whether to approve the Settlement, the proposed Plan of Allocation, and Lead Counsel’s request for attorneys’ fees and expenses. The Court will also consider written objections filed in accordance with the instructions set forth in the Notice.  We do not know how long it will take the Court to make these decisions. The Court may change the date and time of the Settlement Hearing without further notice to Class Members.   If you want to attend the hearing, please check with Lead Counsel, review the docket, or review the Settlement website to be sure that the date or time has not changed.

You do not have to attend the Settlement Hearing. Lead Counsel will answer any questions the Court may have.  

But, you are welcome to come at your own expense.  If you validly submit an objection, you do not have to come to Court to talk about your objection. However, if you wish to speak at the Settlement Hearing about your objection, you may ask the Court for permission to do so by including with your objection a statement that it is your “notice of intention to appear in Southeastern Pennsylvania Transportation Authority, et al., v. Orrstown Financial Services, et al, Civil Action No. 1:12-cv-00993 (M.D. Pa.).”

You also are not required to hire an attorney to represent you, but if you decide to hire an attorney, it will be at your own expense, and that attorney must file a notice of appearance with the Clerk’s Office and serve it on Counsel at  Clerk of the United States District Court Middle District of Pennsylvania Sylvia H. Rambo United States Courthouse 1501 N 6th St, Harrisburg, PA 17102 so that such notice is received (not just postmarked) on or before April 28, 2023.

If you do nothing, you will get no money from this Settlement and you and your Releasing Plaintiff Parties will not be able to start a lawsuit, continue with a lawsuit, or be part of any other lawsuit against Defendants and their Related Parties about the Released Claims in this case.

The Notice summarizes the proposed Settlement. You can contact the Claims Administrator at 833-709-0094, or Lead Counsel; Nicholas E. Chimicles, Kimberly M. Donaldson-Smith, Timothy N. Mathews at Chimicles Schwartz Kriner & Donaldson-Smith LLP, 361 West Lancaster Avenue, Haverford, Pennsylvania 19041, 610-642-8500 or visit the Settlement on this website. This website has a copy of the Stipulation and other documents concerning the Settlement. All documents filed in the Action can be accessed during business hours at the Office of the Clerk of the Court, Sylvia H. Rambo United States Courthouse, 1501 N 6th St, Harrisburg, PA 17102, or through the Court’s Public Access to Court Electronic Records (PACER) system at https://pacer.uscourts.gov/. Please do not call the Court, the Clerk’s Office, Defendants, or Defendants’ Counsel with questions about the Settlement.

If you purchased or otherwise acquired Orrstown common stock during the Class Period for the beneficial interest of another, you must either (1) within ten (10) calendar days after receipt of the Notice, request from the Claims Administrator sufficient copies of the Notice and the Claim Forms to forward to all such beneficial owners and within ten (10) calendar days after receipt of these Notices and Claim Forms forward them to all such beneficial owners; or (2) within ten (10) calendar days after receipt of the Notice, provide a list of the names, last known addresses and, if possible, email addresses of all such beneficial owners to the Claims Administrator at [email protected] or Orrstown Securities Settlement, c/o Kroll Settlement Administration, P.O. Box 5324, New York, NY, 10150. If you choose the second option, the Claims Administrator will send a copy of the Notice and Claim Form to the beneficial owners you have identified on your list, either by physically mailing or by electronic means.