Micholle v. Ophthotech Corporation
- Vernon Broderick
- 1:17-cv-00210
- U.S. District Court · Southern District of New York
- 6
In Micholle v. Ophthotech, Judge Broderick overruled Albonico’s objection because his stock purchases occurred outside the settlement class period.
Sergio Albonico’s claim for a share of the Ophthotech settlement proceeds was excluded because the stock was acquired through option exercises outside the settlement class period.
What happened
In Micholle v. Ophthotech Corporation, Sergio Albonico objected to the settlement administrator’s rejection of his claim for settlement proceeds. He had sold put-option contracts during the class period, but the buyers exercised them later, outside the period covered by the settlement.
The settlement defined the class as people who purchased or acquired Ophthotech common stock from March 2, 2015, through December 12, 2016. It also stated that, when stock was acquired through exercising an option, the relevant purchase date was the option’s exercise date. Albonico argued that the earlier sale or assignment of the put options should control instead.
Judge Vernon S. Broderick ruled that the settlement’s plain language made the exercise dates controlling, so Albonico was not a class member. The court overruled his objection and directed the Clerk of Court to terminate the pending motion.
The detailed version
- Micholle v. Ophthotech Corporation · No. 1:17-cv-00210
- Vernon Broderick
- July 24, 2025
Background
Micholle v. Ophthotech Corporation was a securities class action in which the court had approved a settlement, a plan for distributing the settlement fund, and a judgment on September 16, 2022. The judgment defined the settlement class as all persons who purchased or acquired Ophthotech common stock between March 2, 2015, and December 12, 2016, inclusive, subject to exceptions not relevant to this objection.
The settlement documents also provided that, when Ophthotech common stock was purchased or sold through the exercise of an option, the relevant purchase or sale date was the option’s exercise date. The court retained authority to implement, distribute, interpret, and enforce the settlement.
Sergio Albonico sold or assigned put-option contracts on November 22 and 23, 2016. The buyers exercised those options on December 19 and 27, 2016, and January 23, 2017, and Albonico then became the owner of Ophthotech common stock. After receiving notice of the settlement, he submitted a claim for settlement proceeds based on those shares. The settlement administrator rejected the claim because the shares were acquired outside the class period and the put options themselves were not included in the settlement.
Arguments and analysis
Albonico argued that selling a put option and later acquiring stock through assignment should be treated as one investment decision occurring when he sold the option. He relied on three cases from other federal courts, but Judge Broderick found those cases inapplicable because they did not interpret the terms of a class settlement agreement.
Albonico also argued that the settlement provision referring to an option’s exercise date applied only when an investor voluntarily exercised the option. He contended that an assignment, which left him unable to control whether the buyers exercised the options, should instead be treated as occurring when he sold or assigned the options. The court acknowledged that Albonico lacked control over the buyers’ decisions but held that this did not change the settlement’s plain language.
The court further rejected Albonico’s argument that the lead plaintiff’s exclusion of his claim was arbitrary or violated duties to treat class members equitably. Those duties did not permit the parties or the court to disregard the settlement’s express terms. The court also noted that Albonico could have objected to the relevant settlement provision before the final fairness hearing, but the deadline for doing so had passed.
Ruling
Judge Vernon S. Broderick held that the option exercise dates controlled under the Plan of Allocation. Because all of the exercise dates through which Albonico received Ophthotech stock fell outside the class period, the settlement administrator correctly determined that he was not a class member.
The court ruled that Albonico’s objection was without merit and OVERRULED it. The Clerk of Court was directed to terminate the pending motion at Doc. 157.
Read the full 6-page opinion on CourtListener, the free public archive maintained by the Free Law Project.