In re Dynagas LNG Partners LP Securities Litigation

Background

Lead Plaintiffs FNY Partners Fund LP, Mario Epelbaum, and Scott Dunlop, together with Plaintiff Irving Braun, filed a motion seeking, among other things, preliminary approval of a proposed settlement and preliminary certification of the plaintiffs as a class. Their submissions included a settlement stipulation, a proposed order concerning preliminary settlement approval and class notice, a proposed notice to class members, and a proposed summary notice.

Issues Identified by the Court

The court said it was inclined to issue the proposed order but wanted to hear from the parties about two concerns. First, the stipulation referred to a confidential supplemental agreement between the lead plaintiff and Dynagas addressing the circumstances in which Dynagas could terminate the settlement. The court noted that courts generally approved settlements referring to such agreements only after the parties filed the agreements with the court under seal, meaning in a restricted court filing.

Second, paragraph 21 of the proposed order would temporarily enjoin the lead plaintiffs and other members of the settlement class from starting or pursuing released claims against released defendants while the court considered final settlement approval. The proposed paragraph did not explain why the restriction should be imposed or provide legal authority for the injunction.

Order

Judge Alison J. Nathan ordered the parties to file the confidential supplemental agreement under seal by June 9, 2021, or show cause in writing by that date why it should not be filed with the court. The court also ordered that, if the parties wished to keep paragraph 21, they had to submit a supplemental brief by June 9 explaining why the court could and should issue the proposed injunction. The order did not finally approve the settlement or finally certify the plaintiffs as a class.