A reply motion filed last Thursday by the plaintiffs prosecuting a securities suit against Grubhub Inc. over allegations that the company lied to investors about its financial viability argued that the court should grant final approval of the $42 million settlement and a 30% attorneys’ fee award of $12.6 million.
According to the filing, the settlement objection deadline has passed and not a single class member has objected to or opted-out of the settlement, corroborating that it and the requested fees are fair and reasonable.
The suit dates to 2019 when investors took on the online food ordering and delivery platform for purportedly making false and misleading statements about new growth prospects. Allegedly, the company was not honest about “restaurant density” in new markets as well as “diner quality,” both which contributed to a profit slump.
The class action said that Grubhub’s statements and omissions concealing the truth about its disappointing expansion artificially raised the company’s stock price, which dropped once the truth came to light, thus damaging investors left holding the ball.
In 2021, the Northern District of Illinois court overseeing the suit permitted all claims to proceed. Six months later, the parties engaged in mediation that led to the instant settlement, which the plaintiffs initially sought approval of in October 2022.
Now, the investorsreiterate that the lack of objections and opt-outs means the settlement should win approval. “This positive reaction of the Class confirms that, as set forth in Lead Plainti ff’s opening briefs, the Settlement, the Plan of Allocation, the requested fee and expense awards and Lead Plaintiff awards are fair and reasonable and should be approved,” the filing says.
In addition, plaintiffs’ counsel, led by Robbins Geller Rudman & Dowd LLP, says that the 30% fee request is consistent with fee awards handed down in similar securities class actions in the Seventh Circuit.