Audience Shareholder Litigation
HomeCase DocumentsContact Us

Welcome to the Audience Shareholder Litigation Website

This website has been established to provide general information related to the Audience, Inc. ("Audience") Shareholder Litigation.

This is a securities class action litigation currently pending before the Honorable Joan B. Gottschall. in the Superior Court of the State of California, County of Santa Clara (“Court”), and the consolidated case is known as Hall v. Audience, Inc., et al.,Case No. 1-15-CV-280778. The Court appointed the law firms of Faruqi & Faruqi, LLP, Brodsky & Smith LLC, and Levi & Korsinsky, LLP as Co-Lead Class Counsel for Plaintiffs. If you want to be represented by your own lawyer, you may hire one at your own expense.

On April 30, 2015, Audience publicly announced that it had entered into a definitive agreement and plan of merger (“Merger Agreement”) with Knowles in a two-step transaction. Pursuant to the Merger Agreement, under step-one, Orange Subsidiary, Inc., a wholly owned subsidiary of Knowles (“Orange Subsidiary”) would exchange cash and shares of Knowles common stock for all the outstanding shares of Audience common stock, and, under step two, Orange Subsidiary would merge with and into Audience, with Audience surviving the merger as a wholly owned subsidiary of Knowles.

On May 15, 2015, Plaintiff Ken Hall filed a complaint captioned Hall v. Audience, Inc., et al., Case No. 1-15-cv-280778 (the “Hall Action”) against Defendants alleging, among other things, that the members of Audience’s board of directors breached their fiduciary duties to Audience stockholders in connection with the Merger, and that Audience and Knowles aided and abetted these violations.

On May 19, 2015, Knowles and Orange filed with the Securities and Exchange Commission (the “SEC”) a Tender Offer Statement on Schedule TO pursuant to the Merger Agreement. On the same day, May 19, 2015, Audience filed with the SEC its Solicitation/Recommendation Statement on Schedule 14D-9 relating to the tender offer.

On May 20, 2015, Plaintiff Mina Mohamadi filed a complaint captioned Mohamadi v. Gyani, et al., Case No. 1-15-cv-280931 (the “Mohamadi Action”) against Defendants alleging, among other things, that the members of Audience’s board of directors breached their fiduciary duties to Audience stockholders in connection with the Merger, and that Knowles and Orange aided and abetted those alleged violations. It also alleges that Audience failed to publicly disclose all material information about the proposed transaction and that the public disclosures filed by Audience in connection with the proposed transaction contain misleading information.

On May 22, 2015, Knowles and Orange filed with the SEC an Amendment No. 1 to their Tender Offer Statement, previously filed with the SEC on May 19, 2015. On the same day, May 22, 2015, Audience filed with the SEC its Amendment No. 1 to its Schedule 14D-9, previously filed with the SEC on May 19, 2015.

On May 22, 2015, Plaintiff Michael Kamentsev filed a complaint captioned Kamentsev v. Audience, Inc., et al., Case No. 1-15-cv-281063 (the “Kamentsev Action”) against Defendants alleging, among other things, substantially the same claims as set forth in the Hall and Mohamadi Actions.

On May 27, 2015, Plaintiff Raymond De Souza filed a complaint captioned De Souza v. Santos, et al., Case no. 1-15-cv-281131 (the “De Souza Action”) against Defendants alleging, among other things, substantially the same claims as set forth in the Hall and Mohamadi Actions.

Counsel for Plaintiffs and the Defendants agreed to the exchange of expedited discovery, including the production of certain confidential materials which were produced to Plaintiffs by Audience between May 28, 2015 and June 4, 2015.

On May 29, 2015, Plaintiff Mark Malfatti filed a complaint captioned Malfatti v. Audience, Inc., et al., Case No. 1-15-cv-281241 (the “Malfatti Action”) against Defendants alleging, among other things, substantially the same claims as set forth in the Hall and Mohamadi Actions.

On May 29, 2015, the Parties submitted a stipulation and proposed order consolidating the Hall Action, the Mohamadi Action, the Kamentsev Action, the De Souza Action, and the Malfatti Action (collectively the “Actions”) for all purposes into In re Audience, Inc. Shareholder Litigation, and Plaintiffs designated the law firms of Faruqi & Faruqi, LLP, Brodsky & Smith LLC, and Levi & Korsinsky, LLP as Co-Lead Class Counsel for Plaintiffs (the “Co-Lead Counsel” or “Counsel for Plaintiffs”), which the Court granted on June 10, 2015.

On June 2, 2015, Audience filed with the SEC its Amendment No. 2 to its Schedule 14D-9, previously filed with the SEC on May 19, 2015.

On June 4, 2015, Plaintiffs’ Counsel sent a formal demand letter to Defendants’ Counsel in an effort to resolve the Actions (the “Demand Letter”). Subsequent to receipt of the Demand Letter, Plaintiffs and Defendants, through their respective counsel, commenced arm’s length discussions and negotiations regarding the Demand Letter and a potential resolution of the claims asserted in the Actions.

On June 10, 2015, Audience filed with the SEC its Amendment No. 3 to its Schedule 14D-9, previously filed with the SEC on May 19, 2015.

On June 10, 2015, the Parties, by and through their counsel, completed their negotiations regarding a potential settlement and reached an agreement-in-principle providing for the settlement of the Actions on the terms and conditions set forth in a Memorandum of Understanding (“MOU”). Among other things, the MOU set forth the Parties’ agreement-in-principle that, in consideration for the full and final settlement and dismissal with prejudice of the Actions and the release of any and all Released Claims, as defined therein, Audience would make additional disclosures (the “Supplemental Disclosures,” which can be viewed at www.audienceshareholderlitigation.com as Exhibit A) in an amendment to the Schedule 14D-9. The MOU further provided, among other things, that it was subject to certain additional discovery to confirm that the proposed settlement is fair, reasonable, adequate, and in the best interests of Audience’s stockholders.

On June 17, 2015, Audience filed with the SEC its Amendment No. 4 to its Schedule 14D-9, previously filed with the SEC on May 19, 2015.

On July 1, 2015, Audience filed with the SEC its Amendment No. 5 to its Schedule 14D-9, previously filed with the SEC on May 19, 2015.

On July 1, 2015, Knowles announced the completion of its offer for all the outstanding shares of common stock of Audience, Inc. Also on July 1, 2015, in accordance with the Merger Agreement and the “short-form” merger procedure available under Section 251(h) of the Delaware General Corporation Law, Orange Subsidiary filed a Certificate of Merger with the Secretary of State of the State of Delaware whereupon it was merged with and into Audience, and Audience became a wholly owned subsidiary of Knowles.

As part of the confirmatory discovery contemplated by the MOU, Plaintiffs took the depositions of Audience’s former Chief Executive Officer, Peter Santos, on July 21, 2015, and a representative from Audience’s financial advisor, Deutsche Bank, on August 6, 2015.

After conducting this additional confirmatory discovery, Plaintiffs believe that the proposed settlement is fair, reasonable, and adequate to Plaintiffs and the Class (defined herein).

All Parties recognize the time and expense that would be incurred by further litigation, the uncertainties inherent in such litigation and that the interests of the Parties would best be served by a settlement of the Actions. Each Defendant denies having committed any violation of law or breach of fiduciary duty, including breach of any duty to Audience stockholders. There has been no admission or finding of facts or liability by or against any Defendant and nothing herein should be construed as such.

For purposes of the Settlement, the Court has preliminarily certified a class for settlement purposes only, consisting of all persons and entities who held shares of Audience common stock, either of record or beneficially, at any time between and including April 30, 2015 (the date the merger was publicly announced) and July 1, 2015 (the date of consummation of the Merger), including their respective successors in interest, predecessors, representatives, co-owners, trustees, executors, administrators, heirs, assigns, or transferees, immediate and remote (“Class”). Excluded from the Class are Defendants, their successors-in-interest, members of the immediate family of any individual Defendant, any entity in which a Defendant has or had a controlling interest, officers of Audience and its successors-in-interest, and the legal representatives, heirs, successors, or assigns of any such excluded person.

The Court did not decide in favor of Plaintiffs or Defendants. Instead, both sides agreed to a settlement. That way, they avoid the risks and cost of a trial, and the people affected receive something of value. The Class Representatives and their attorneys think the settlement is best for the Class.

Defendants have denied, and continue to deny, that they have committed or aided and abetted in the commission of any violation of law or engaged in any of the alleged wrongful acts, and expressly maintain that they diligently and scrupulously complied with their fiduciary and other legal duties. Defendants deny and do not concede the materiality of any of the additional disclosures provided for in the Settlement. The Defendants are entering into the proposed Settlement solely because the proposed Settlement would eliminate the burden and expense of further litigation.

Plaintiffs’ Counsel believe that Plaintiffs’ claims have merit based on proceedings to date but recognize that Defendants would continue to assert legal and factual defenses to their claims. Plaintiffs’ Counsel have concluded that the proposed Settlement is fair, reasonable, and adequate to the Class and that it is reasonable to pursue the Settlement of the Actions based upon the procedures outlined herein and the substantial benefits provided to the Class.

Although the information on this website is intended to assist you, it does not replace the information contained in the Notice of Pendency of Class Action, Proposed Settlement of Class Action, and Settlement Hearing which can be found and downloaded from this website. We recommend that you read the Notice and other relevant case documents carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THE SETTLEMENT

OBJECT You may write to the Court if you object to the terms of this Settlement.
GO TO THE SETTLEMENT HEARING You may ask to speak to the Court about your concerns relating to the Settlement at the Settlement Hearing.
DEADLINES The Settlement Hearing is scheduled for July 29, 2016, at 9:00 a.m. Any documentation supporting objections must be postmarked on or before June 3, 2016.
MORE INFORMATION More information concerning the Settlement can be obtained by contacting either of Plaintiffs’ Co-Lead Counsel.