Fine v. Bowl America, Inc.

THE FOLLOWING RECITATIONS DO NOT CONSTITUTE FINDINGS OF THE COURT. THE COURT HAS MADE NO FINDINGS WITH RESPECT TO THE FOLLOWING MATTERS, AND THESE RECITATIONS SHOULD NOT BE UNDERSTOOD AS AN EXPRESSION OF ANY OPINION OF THE COURT AS TO THE MERITS OF ANY OF THE CLAIMS OR DEFENSES RAISED BY ANY OF THE PARTIES.

In this Action, Plaintiffs allege that Cheryl A. Dragoo, Merle Fabian, Nancy E. Hull, Gloria M. Bragg and Allan L. Sher (deceased) (the “Defendants”) breached fiduciary duties owed to Bowl America stockholders in connection with the Merger and/or aided and abetted such alleged breaches of duty, as described below. Defendants deny all allegations of wrongdoing and liability.

If you are a member of the Settlement Class, you are subject to the Settlement. The class preliminary certified by the Court solely for purposes of the Settlement consists of:

All former holders of Bowl America common stock who were paid $8.53 per share for each share they held at the time of the Merger with Bowlero on August 18, 2021, and who are not excluded from the Settlement Class.

In consideration of the Settlement of Plaintiffs’ Released Claims against Defendants’ Released Parties, Defendants, Bowlero and/or Bowl America shall cause the Insurance Carriers to pay the Settlement Amount into an interest-bearing escrow account for the benefit of the Class in accordance with the Stipulation. Defendants’ Released Parties (except for the Insurance Carriers or their successors-in-interest) shall bear no personal responsibility for any payment in connection with the Stipulation or the Settlement.

Plaintiffs believe that the claims asserted in the Action have merit, but also believe that the Settlement set forth in the Stipulation provides substantial and immediate benefits for the Class. In addition to the substantial monetary benefit, Plaintiffs and Class Counsel have considered: (i) the attendant risks of continued litigation and the uncertainty of the outcome of the Action; (ii) the probability of success on the merits; (iii) the inherent problems of proof associated with, and possible defenses to, the claims asserted in the Action; (iv) the desirability of permitting the Settlement to be consummated according to its terms; (v) the expense and length of continued proceedings necessary to prosecute the Action through trial and appeals; and (vi) the conclusion of Plaintiffs and Class Counsel that the terms and conditions of the Settlement and the Stipulation are fair, reasonable, and adequate, and that it is in the best interests of the Class to settle the claims asserted in the Action on the terms set forth in the Stipulation.

Based on Class Counsel’s thorough review and analysis of the relevant facts, allegations, defenses, and controlling legal principles, Class Counsel believe that the Settlement set forth in the Stipulation is fair, reasonable, and adequate, and confers substantial benefits upon the Class. Based upon Class Counsel’s evaluation, as well as their own evaluations, Plaintiffs have determined that the Settlement is in the best interests of the Class and have agreed to the terms and conditions set forth in the Stipulation.

Defendants deny any and all allegations of wrongdoing, fault, liability, or damages with respect to Plaintiffs’ Released Claims, including, but not limited to, any allegations that Defendants have committed any violations of law or breach of any duty owed to Bowl America stockholders, that the stockholder vote in favor of the Merger was not fully informed, that the disclosures concerning the Merger were inadequate, that the Merger was not entirely fair to, or in the best interests of, Bowl America stockholders, that Defendants have acted improperly in any way, that Defendants have any liability or owe any damages of any kind to Plaintiffs and/or the Class, and/or that any Defendant was unjustly enriched in the Merger. Defendants maintain that their conduct was at all times proper and in compliance with applicable law, and the Defendants further maintain that their conduct was at all times in the best interests of Bowl America and its stockholders. Defendants also deny that Bowl America’s stockholders were harmed by any conduct of Defendants that was alleged, or that could have been alleged, in the Action. Each of the Defendants asserts that, at all relevant times, such Defendant acted in good faith.

Nevertheless, Defendants have determined to enter into the Settlement on the terms and conditions set forth in the Stipulation solely to put Plaintiffs’ Released Claims to rest, finally and forever, without in any way acknowledging any wrongdoing, fault, liability, or damages. For the avoidance of doubt, nothing in the Stipulation or the Settlement shall be construed as an admission by Defendants of any wrongdoing, fault or liability.

If the Settlement is approved by the Court and the Effective Date occurs, the Net Settlement Fund will be distributed on a pro rata basis to those Settlement Class Members who held Bowl America shares at the time such shares were converted into the right to receive the Merger Consideration in connection with the Closing. Please Note: If you are eligible to receive a payment from the Net Settlement Fund, you do not have to submit a claim form or take any other action in order to receive your payment.

As stated above, the Settlement Amount will be deposited into an interest-bearing escrow account for the benefit of the Class. Based on the estimated number of shares held by Settlement Class Members eligible for a distribution from the Settlement (2,403,537) the Settlement Amount represents approximately $0.90 per share for each Settlement Class Member before deducting any attorneys’ fees or expenses that may be awarded by the Court. If the Settlement is approved by the Court and the Effective Date of the Settlement occurs, the Net Settlement Fund (that is, the Settlement Amount plus any interest accrued thereon less (i) any Taxes or Tax Expenses, (ii) any Administration Costs or Notice Costs, (iii) any Fee and Expense Award awarded by the Court, and (iv) any other costs or fees approved by the Court) will be distributed in accordance with the proposed Plan of Allocation stated below or such other plan of allocation as the Court may approve.

The Net Settlement Fund will not be distributed unless and until the Court has approved the Settlement and a plan of allocation, and the time for any petition for rehearing, appeal, or review, whether by certiorari or otherwise, has expired. Approval of the Settlement is independent from approval of a plan of allocation. Any determination with respect to a plan of allocation will not affect the Settlement, if approved.

The Court may approve the Plan of Allocation as proposed or it may modify the Plan of Allocation without further notice to the Class. Any Orders regarding any modification of the Plan of Allocation will be posted on the Settlement website.

There are some individuals and entities who are excluded from the Settlement Class. In addition, Excluded Persons includes anyone who timely seeks exclusion from the Settlement Class in accordance with the procedures described in FAQs below.

The Net Settlement Fund will be distributed on a pro rata basis to Eligible Stockholders.

Subject to Court approval in the Class Distribution Order, Class Counsel will direct the Settlement Administrator to allocate the Net Settlement Fund among Eligible Stockholders on a pro rata, per-share basis and distribute the Net Settlement Amount to Eligible Stockholders as follows:

1. For Eligible Beneficial Holders whose Merger Consideration was distributed through Cede, as nominee for the Depository Trust Company (“DTC”), the Settlement Administrator shall send their portion of the Net Settlement Fund to DTC for distribution. The Settlement Administrator shall instruct DTC Participants to distribute the Eligible Beneficial Holders’ portion of the Net Settlement Fund to Eligible Beneficial Holders in the same manner in which the DTC Participants distributed proceeds in connection with the Merger. The Settlement Administrator shall provide DTC Participants with a list of Excluded Persons and direct the DTC Participants not to distribute any payment to any Excluded Person. DTC’s sole obligation in connection with the Settlement shall be to distribute the Eligible Beneficial Holders’ portion of the Net Settlement Fund to DTC Participants in accordance with this Paragraph and DTC rules and procedures, and DTC shall not be responsible for any errors in the calculation of any distribution or for any failure by the Settlement Administrator, Defendants, or Class Counsel to identify the Excluded Persons.
2. For Eligible Record Holders, the Settlement Administrator shall send their portion of the Net Settlement Fund to the address listed on the stockholder register or other relevant books and records of Bowl America or its transfer agent.
3. If there is any balance remaining in the Escrow Account after six (6) months from the date of initial distribution (whether by reason of tax refunds; uncashed checks; amounts returned by Excluded Persons, to the extent they receive settlement payments; or for any other reason), Class Counsel may petition the Court for reimbursement of their time at applicable hourly rates and expenses incurred in the administration of the Settlement Fund. After the Court’s consideration and authorization of any such reimbursement, Class Counsel shall, if feasible, reallocate such balance among Eligible Stockholders who deposited the checks sent (or had the funds paid directly by DTC) in the initial distribution in an equitable and economic fashion. Thereafter, any balance which still remains in the Settlement Fund shall be distributed at the direction of the Court.

If the Settlement is approved, the Court will enter an Order and Final Judgment (the “Order and Final Judgment”). Pursuant to the Order and Final Judgment, the claims asserted against Defendants in the Action will be dismissed with prejudice and the following releases will occur:

1. Release of Claims by Plaintiffs and the Class: Upon the Effective Date, Plaintiffs and each and every Class Member, on behalf of themselves and any and all of their respective successors-in-interest, successors, predecessors-in-interest, predecessors, representatives, trustees, executors, administrators, estates, heirs, assigns, and transferees, immediate and remote, and any Person acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors-in-interest, predecessors, successors-in-interest, successors, and assigns, each of the foregoing in their capacities as such only, shall have fully, finally, and forever released, settled, and discharged Defendant Released Parties from and with respect to every one of Plaintiffs’ Released Claims, and shall thereupon be forever barred and enjoined from commencing, instituting, prosecuting, or continuing to prosecute any of Plaintiffs’ Released Claims against any of Defendant Released Parties, except for claims relating to the enforcement of the Settlement or any claims against on behalf of any person who submits a request for exclusion that is accepted by the Court.
2. Release of Claims by Defendant Released Parties: Upon the Effective Date, Defendant Released Parties and any and all of their respective successors-in-interest, successors, predecessors-in-interest, predecessors, representatives, trustees, executors, administrators, estates, heirs, assigns, and transferees, immediate and remote, and any Person acting for or on behalf of, or claiming under, any of them, and each of them, together with their predecessors-in-interest, predecessors, successors-in-interest, successors, and assigns, each of the foregoing in their capacities as such only, shall have fully, finally, and forever released, settled, and discharged Plaintiffs’ Released Parties from and with respect to every one of Defendants’ Released Claims, and shall thereupon be forever barred and enjoined from commencing, instituting, prosecuting, or continuing to prosecute any of Defendants’ Released Claims against any of Plaintiffs’ Released Parties, except for claims relating to the enforcement of the Settlement.

Class Members do not need to attend the Settlement Hearing. The Court will consider any submission made in accordance with the provisions below even if a Class Member does not attend the Settlement Hearing. Class Members can recover from the Settlement without attending the Settlement Hearing or submitting a claim form.

Please Note: The date and time of the Settlement Hearing may change without further written notice to Class Members. In addition, the Court may decide to conduct the Settlement Hearing remotely by telephone or videoconference, or otherwise allow Class Members to appear at the hearing remotely by phone or video, without further notice to Class Members. In order to determine whether the date and time of the Settlement Hearing have changed, or whether Class Members must or may participate remotely by phone or video, it is important that you monitor the Court’s docket and this Settlement website before making any plans to attend the Settlement Hearing. Any updates regarding the Settlement Hearing, including any changes to the date or time of the hearing, or updates regarding in-person or remote appearances at the hearing, will be posted to this Settlement website. Also, if the Court requires or allows Class Members to participate in the Settlement Hearing remotely by telephone or videoconference, the information needed to access the conference will be posted to this Settlement website.

The Settlement Hearing will be held on December 12, 2024, at 9:00 a.m. before The Honorable Stephanie A. Gallagher, either in person at the Court, or remotely by telephone or videoconference (in the discretion of the Court), to, among other things: (i) determine whether to finally certify the Class for settlement purposes only, pursuant to Federal Rules 23(a), and 23(b)(3); (ii) determine whether Plaintiffs and Class Counsel have adequately represented the Class, and whether Plaintiffs should be finally appointed as Class representatives for the Settlement Class and Co-Lead Counsel should be finally appointed as Class Counsel; (iii) determine whether the proposed Settlement should be approved as fair, reasonable, and adequate to the Class and in the best interests of the Class; (iv) determine whether the Action should be dismissed with prejudice and the Releases provided under the Stipulation should be granted; (v) determine whether the Order and Final Judgment approving the Settlement should be entered; (vi) determine whether the proposed Plan of Allocation of the Net Settlement Fund is fair and reasonable, and should therefore be approved; (vii) determine whether to approve the Fee and Expense Application for attorneys’ fees not to exceed twenty-eight percent (28%) of the Settlement Amount, including reimbursement of litigation expenses and any costs and expenses paid to Plaintiffs or Co-Lead Counsel to be paid out of the Settlement Fund, including the reimbursement of $250,000 to Lead Plaintiffs for the advancement of legal fees to Class Counsel; (viii) hear and rule on any objections to the Settlement, the proposed Plan of Allocation, and/or Class Counsel’s application for a Fee and Expense Award; and (ix) consider any requests for exclusion or any other matters that may properly be brought before the Court in connection with the Settlement.

If you want to keep any right you may have to sue or continue to sue Defendants and the other Released Defendant Parties on your own concerning the Released Plaintiffs’ Claims, then you must take steps to remove yourself from the Settlement Class. This is called excluding yourself or “opting out.” Please note: If you decide to exclude yourself from the Settlement Class, there is a risk that any lawsuit you may file to pursue claims alleged in the Action may be dismissed, including because the suit is not filed within the applicable time periods required for filing suit.

To exclude yourself from the Settlement Class, you must mail a signed letter stating that you request to be “excluded from the Settlement Class in Fine, et al., v. Bowl America, Inc., et al., 1:21-cv-01967- SAG (D. Md.).” You cannot exclude yourself by telephone or email. Each request for exclusion must also: (i) state the name, address, telephone number, and email address (if any) of the Person seeking exclusion; and (iii) be signed by the Person requesting exclusion. Requests must be submitted with documentary proof of Bowl America common stock held by the requester at the time of the Merger. A request for exclusion must be mailed so that it is received no later than November 28, 2024, at:

Bowl America, Inc. Settlement
c/o Epiq
P.O. Box 3805
Portland, OR 97208-3805

This information is needed to determine whether you are a member of the Settlement Class. Your exclusion request must comply with these requirements in order to be valid.

If you ask to be excluded, you cannot receive any payment from the Net Settlement Fund. Also, you cannot object to the Settlement because you will not be a Settlement Class Member and the Settlement will not affect you. If you submit a valid exclusion request, you will not be legally bound by the Settlement or anything that happens in the Action, and you may be able to sue (or continue to sue) Defendants and the other Released Defendant Parties in the future.

No. Unless you properly exclude yourself, you will give up any rights to sue Defendants and the other Released Defendant Parties for any and all Released Plaintiffs’ Claims. If you have a pending lawsuit against any of the Released Defendant Parties, speak to your lawyer in that case immediately. You must exclude yourself from this Class to continue your own lawsuit. Remember, the exclusion deadline is November 28, 2024.

Any Class Member may file a written objection to the Settlement, the proposed Plan of Allocation, and/or Class Counsel’s application for the Fee and Expense Award (an “Objector”); provided, however, that no Objector shall be heard or entitled to object unless on or before November 28, 2024, such person (1) files their written objection, together with copies of all other papers and briefs supporting the objection, with the Clerk of the Court, United States District Court, District of Maryland, Northern Division, 101 West Lombard Street, Baltimore, MD 21201; (2) serves such papers (electronically, by hand, by first class U.S. mail, or by express service) on Co-Lead Counsel and Defendants’ Counsel at the addresses set forth below; and (3) emails a copy of the written objection to the below email addresses for Co-Lead Counsel and Defendants’ Counsel.

Objecting is telling the Court that you do not like something about the proposed Settlement, Plan of Allocation, or Co-Lead Counsel’s Fee and Expense Application. You can still recover money from the Settlement. You can object only if you stay in the Settlement Class. Excluding yourself is telling the Court that you do not want to be part of the Settlement Class. If you exclude yourself from the Settlement Class, you have no basis to object because the Settlement and the Action no longer affects you.

Any objections must: (i) identify the case name and civil action number, “Fine, et. al., v. Bowl America, Inc., et. al., .Case No. 21-CV-01967 (SAG)”; (ii) state the name, address, and telephone number of the Objector and, if represented by counsel, the name, address, and telephone number of the Objector’s counsel; (iii) be signed by the Objector; (iv) contain a specific, written statement of the objection(s) and the specific reason(s) for the objection(s), including any legal and evidentiary support the Objector wishes to bring to the Court’s attention, and if the Objector has indicated that he, she, or it intends to appear at the Settlement Hearing, the identity of any witnesses the Objector may call to testify and any exhibits the Objector intends to introduce into evidence at the hearing; and (v) include documentation sufficient to prove that the Objector is a member of the Class. Documentation establishing that an Objector is a member of the Class must consist of copies of monthly brokerage account statements or an authorized statement from the Objector’s broker containing the transactional and holding information found in an account statement. Co-Lead Counsel may request that the Objector submit additional information or documentation sufficient to prove that the objector is a Class Member.

You may file a written objection without having to appear at the Settlement Hearing. You may not, however, appear at the Settlement Hearing to present your objection unless you first file and serve a written objection in accordance with the procedures described above, unless the Court orders otherwise.

You are not required to hire an attorney to represent you in making written objections or in appearing at the Settlement Hearing. However, 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 Court and serve it on Co-Lead Counsel and Defendants’ Counsel at the mailing and email addresses set forth above so that the notice is received on or before November 28, 2024.

The Settlement Hearing may be adjourned by the Court without further written notice to Class Members. If you intend to attend the Settlement Hearing, you should confirm the date and time with Lead Counsel or the Settlement Administrator.

Unless the Court orders otherwise, any Class Member who does not object in the manner described above will be deemed to have waived any objection (including the right to appeal) and shall be forever foreclosed from making any objection to the Settlement, the proposed Plan of Allocation, Class Counsel’s application for the Fee and Expense Award, or any other matter related to the Settlement or the Action, and will otherwise be bound by the Order and Final Judgment to be entered and the releases to be given. Class Members do not need to appear at the Settlement Hearing or take any other action to indicate their approval.

The Notice contains only a summary of the terms of the proposed Settlement. For more detailed information about the matters involved in the Action, you are referred to the papers on file in the Action, including the Stipulation, which may be inspected during regular office hours at the office of the Clerk of the Court, United States District Court, District of Maryland, Northern Division, 101 West Lombard Street, Baltimore, MD 21201. Additionally, copies of the Stipulation, the Complaint, and pertinent orders entered by the Court will be posted on this Settlement website. If you have questions regarding the Settlement, you may contact the Settlement Administrator (EPIQ) at Bowl America, Inc. Settlement, c/o Epiq, P.O. Box 3805, Portland, OR 97208-3805, info@BowlAmericaSecuritiesLitigation.com; or Co-Lead Counsel. If you are a broker or other nominee that held Bowl America common stock at any time during the Class Period for the beneficial interest of persons or entities other than yourself, you are requested, within seven (7) calendar days of receipt of the Notice, to either: (i) request from the Settlement Administrator sufficient copies of the Postcard Notice to forward to all such beneficial owners, and within seven (7) calendar days of receipt of those Postcard Notices forward them to all such beneficial owners; or (ii) provide a list of the names, addresses, and, if available, email addresses of all such beneficial owners to the Settlement Administrator at:

Bowl America, Inc. Settlement
c/o Epiq
P.O. Box 3805
Portland, OR 97208-3805

If you choose the second option, the Settlement Administrator will send a copy of the Postcard Notice to the beneficial owners. Upon full compliance with these directions, such nominees may seek reimbursement of their reasonable expenses actually incurred by providing the Settlement Administrator with proper documentation supporting the expenses for which reimbursement is sought, not to exceed $0.05 plus postage at the current pre-sort rate used by the Settlement Administrator per mailed Postcard Notice. Copies of the Notice and the Postcard Notice may also be obtained from this Settlement website or by calling the Settlement Administrator toll free at 1-888-874-4173 or by emailing the Settlement Administrator at info@BowlAmericaSecuritiesLitigation.com.

DO NOT CALL OR WRITE THE COURT OR THE CLERK’S OFFICE REGARDING THE NOTICE.

All inquiries concerning the Notice should be directed to:

Bowl America, Inc. Settlement
c/o Epiq
P.O. Box 3805
Portland, OR 97208-3805
info@BowlAmericaSecuritiesLitigation.com

We are Epiq, a firm retained by the Lead Counsel in the case, to mail the Court-ordered Notice to potential Settlement Class Members and conduct the Claims Administration process. We are NOT lawyers in the action.

As a long-established legal services firm, our electronic systems, software applications, employee and operational protocols are all designed to afford utmost protection and security for the case information provided to us. Further, we are obligated to fulfill the security requirements mandated by the various Court Jurisdictions and Governmental Entities that oversee the various types of cases we administer.