IN RE: Atlantic Department Stores, Inc., Litigation

Case MDL No. 113 Document 2 Filed 04/30/15 Page 1 of 6
Pepe pnt ree py pe ig EE ei p— ;
. Te
. } RIE ~ < | N | . . . ;
BEFORE THE JUDICIAL PANEL “-'.. 7/7	¥ ER
ON Eat Eo :
MULTIDISTRICT LITIGATION per : oo SE I
“12 SITTIN CS
Pico. a a A. Cel Co
IN RE ATLANTIC DEPARTMENT STORES, ) INERT nn ’ ER EAE
INC., LITIGATION 1) DOCKET "NO. AL UP
3 or
OPINION AND ORDER WZ.)
* BEFORE ALFRED P. MURRAH *, CHAIRMAN, AND JOHN MINOR WISDOM, REE - Lo oo -
: EDWARD WEINFELD, EDWIN A. ROBSON, WILLIAM H. BECKER, - EEE
JOSEPH S. LORD, III, AND STANLEY A. WEIGEL, JUDGES OF REET ATE
THE PANEL SEE SER
PER CURIAM oo oo
The six actions now before the Panel concern IE 2 TAR
the public sale of Atlantic Department Stores common stock RE .
to finance Atlantic's purchase of a discount department store Co i.
business operated by Arlen Realty & Development Corporation. EA "
A subsequent exchange offer of Heck's, Inc. for Atlantic . E
stock is also involved in two of the actions. On the basis :
of the briefs submitted and the hearing held, we order the
actions in other districts transferred to the Southern District Co oo
of New York for coordinated or consolidated pretrial proceed- a
ings with the actions pending there. ’ BN
Pursuant to a Federal Trade Commission consent order,
Arlen was required to divest itself of Spartans Department
Stores, a division of Arlen's engaged in the operation of Co
discount department stores, by September 1971. Atlantic Co oo
Department Stores, Inc., was formed as a subsidiary of Arlen :
* Judge Alfred P. Murrah took no part in the consideration
or decision of this matter.

Case MDL No. 113 Document2 Filed 04/30/15 Page	2 of 6
®
and a purchase agreement was entered into by both corporations
providing for the sale of the Spartans division to Atlantic.
Atlantic then sold 1,500,000 shares of its common stock to
the public, pursuant to a registration statement dated
September 3, 1971, and used the net proceeds to pay part |
of the purchase price to Arlen.
In 1972, Heck's, Inc., which operates a chain of :
discount department stores in West Virginia and other states,
made a successful exchange offer to Atlantic stockholders,
offering its stock for Atlantic's. In connection with this
offer, Heck's filed a registration statement with the SEC
® and mailed its prospectus to the Atlantic stockholders.
‘Because Atlantic allegedly declined to provide current |
financial information, Heck's included with its prospectus
copies of Atlantic's 1971 SEC filings concerning its common
stock offering and a purported disclaimer concerning the
accuracy and completeness of the Atlantic documents.
All of the plaintiffs allege that the Atlantic
registration statement and prospectus contained material
misstatements and omissions concerning the result of past
operations of Atlantic and the prospects for future operations.
They assert that Atlantic and Arlen and their officers,
directors, managing underwriters and accountants are respon-
® sible for these misrepresentations. In five of the six actions.

Case MDL No. 113 Document2 Filed 04/30/15 Page	3 of 6
oo 5
oo the individual plaintiffs seek to represent variously defined E
classes of Atlantic stockholders. Two of the plaintiffs,
Gabor and Annenberg YY also allege that Heck's and its directors
and underwriters conspired to secure control of Atlantic
in violation of the federal securities laws by misstatements
and omissions contained in Heck's 1972 prospectus and the
Atlantic materials distributed with it.
Plaintiff Leggett first moved for the pretrial
consolidation of the two actions then pending. The four
actions filed thereafter were brought before the Panel by
supplemental motions to transfer and by orders to show cause.
® The parties agree, and we find, that the claims concerning
Atlantic's 1971 offering of common stock involve substantial
common questions of fact and that consolidation of all cases
in a single district for pretrial proceedings is necessary.
‘The only opposition to transfer comes from Heck's, ll
Inc., its directors and its managing underwriters	in the
exchange offer. In a written response to the motion to
transfer submitted prior to the filing of the Annenberg
complaint, they argue that most of the allegations of
plaintiff Gabor in the Eastern District of Pennsylvania
are factually distinct from the claims concerning Atlantic's
1971 registration statement and should not be included in
coordinated or consolidated pretrial proceedings. We think
® -
1/ Bernard L. Gabor, et al. v. Harold Fein, et al., E.D.
Pa., Civ. Action No. 72-1609; Norman Annenberg v. Sidney
Mittleman, et al., S.D.N.Y., Civ. Action No. 72 Civ. 3856.

Case MDL No. 113 Document2 Filed 04/30/15 Page	4 of 6
® | a
.there are sufficient common questions of fact, however, both
in the Gabor and Annenberg complaints, to require the pretrial
coordination of the claims involving Heck's with the remainder
of the litigation.
Gabor asserts that the Heck's registration state-
ment fails to disclose the full extent of the Heck's defendants’
knowledge of Atlantic's poor financial condition and of the
misstatements contained in the 1971 registration statement
distributed by Heck's. Annenberg goes further, alleging
that the Heck's transaction was one step in a series of
transactions whereby Atlantic shares were sold to the public
® at an excessive price and then reacquired at a much lower pricefor the benefit of defendant Mittleman, president of Atlantic.
As a result of these allegations, it will be necessary for the
parties to these claims to review many of the same documents
and examine many of the same witnesses as the parties to {
the claims against Atlantic and duplication of discovery
effort will result unless all actions are assigned to a
single judge.
The parties differ on the appropriate transferee
district. The original movant, plaintiff Leggett, proposes
that all cases be transferred to the Southern District	of
New York while Arlan and Atlantic suggest the Northern District
of California, where the first action was filed, and Gabor :
( suggests the Eastern District of Pennsylvania. It appears

Case MDL No. 113 Document2 Filed 04/30/15 Page	5 of 6
® oC -s-
. that both Arlen and Atlantic and the majority of the remaining
defendants are located in the Southern District of New York
and that the transactions under attack occurred in that district.
Although Heck's and a few other defendants are located in
other districts, we see no great inconvenience to them in
requiring their participation in pretrial pvoceedings in
New York. &
IT IS THEREFORE ORDERED that all actions listed
oo on the attached Schedule A be, and the same hereby are,
transferred to the Southern District of New York and assigned
to the Honorable Charles R. Weiner for coordinated
® or consolidated pretrial proceedings with .the actionspending there.
I
.
_ 2/ with the cooperation of all involved, Judge Charles R. Weiner
® of the Eastern District of Pennsylvania , has been
assigned to the Southern District of New York pursuant to
28 U.S.C. §292 and these cases will be assigned to him
for pretrial proceedings.

Case MDL No. 113 Document 2 Filed 04/30/15 Page 6 of 6
So : ~
® SCHEDULE A DOCKET NO. 113
SOUTHERN DISTRICT OF NEW YORK	error	Yao ntl OF NEW YORK
Noel Bleecker Leggett, III, etc. v. Atlantic Civil Action
Department Stores, Inc., et al. No. 72 Civ. 2676
N. S. Nicholas, et al. v. Arlen Realty & Civil Action
Development Corp., et al. No. 72 Civ. 3164
Norman Annenberg v. Sidney Mittleman, et al. Civil Action
No. 72 Civ. 3856
NORTHERN DISTRICT OF CALIFORNIA	—=Renhn Pio iRICT OF CALIFORNIA
Blake Upton and Merrill Steinberg, etc. v. "Civil Action
Atlantic Dept. Stores, Inc., et al. No. C-72-355-8C
CENTRAL DISTRICT OF CALIFORNIAee ee eee ee
Howard H. Bleicher v. Atlantic Dept. Stores, Civil Action
Inc., et al. No. 72-1651-HP
EASTERN DISTRICT OF PENNSYLVANIA
mo wept Reys Of FENNOILVANIA
® Bernard L. Gabor, et al. v. Harold Fein, Civil Action
et al. No. 72-1609
I