Settlement Alert: In re Roadrunner Transportation Systems, Inc. Securities Litigation

7/10/2019 - Lead Plaintiff, the Public Employees’ Retirement System of Mississippi, on behalf of itself and a class of investors in the common stock of Roadrunner Transportation Systems, Inc. (“Roadrunner”) and defendants in In Roadrunner Transportation Systems, Inc. Securities Litigation have agreed to settle the litigation for $20,000,000.00 in cash.  On June 19, 2019, the court granted preliminary approval of the proposed settlement, and directed that the Notice and Proof of Claim forms be made available to all potential Class Members.1  On September 26, 2019, the court granted final approval to the settlement, resolving all claims in the action.  A copy of the final approval order is avaiilable here and a copy of the final judgment is available here.

If you are a member of the class, your rights will be affected and you may be eligible for a payment from the settlement, unless you timely request to be excluded.  The class consists of:

All Persons who purchased or otherwise acquired Roadrunner's publicly traded common stock on the open market between March 14, 2013 and January 30, 2018, inclusive.

Certain persons and entities have been excluded from the Class (see paragraph 6 of the Notice), as are those who request exclusion pursuant to the instructions set forth in the Notice.  Please read the Notice carefully to fully understand your rights and options.  The Notice is available here and the Proof of Claim form is available here.  You may also visit the Settlement website established by Heffler Claims Administration, at, for more information about the Settlement.

Payments to eligible claimants will be made only after any appeals are resolved, and after the completion of all claims processing.  Please be patient, as this process will take some time to complete.


In this Action, Lead Plaintiff alleged that, from March 14, 2013 through January 30, 2017, inclusive (the "Class Period"), Roadrunner, its then-current Chief Executive Officer, Mark A. DiBlasi, and its then-current Chief Financial Officer, Peter Armbruster, (collectively the "Roadrunner Defendants") made, or caused to be made, false and misleading representations and omissions about Roadrunner's financial results and performance metrics, including net income and earnings per share, debt leverage ratios, business status and the Company's expenses associated with its Tractor Lease Guarantee Program, which Roadrunner used to recruit and maintain independent contractor drivers.  Lead Plaintiff also alleged that HCI Equity Partners, LLC and HCI Equity Management, L.P., investors in, and alleged "control persons" of, Roadrunner (the “HCI Entities”), and their general manager, Scott D. Rued, who they were able to elect as Chairman of the Board of Roadrunner (collectively, the "HCI Defendants"), influenced and controlled  the Roadrunner Defendants and were able to influence the content of Roadrunner’s Annual Reports filed with the SEC during the Class Period.  Lead Plaintiff also alleged that defendants DiBlasi, Armbruster and the HCI Entities sold substantial amounts of their Roadrunner common stock at artificially inflated prices during the Class Period, including through an offering of Roadrunner common stock in August 2013.  The Roadrunner Defendants and the HCI Defendants deny that they violated the federal securities laws. The HCI Defendants further deny that they were control persons of Roadrunner with respect to any of the misconduct alleged by Lead Plaintiff.

On January 30, 2017, Roadrunner announced that it would restate its financial statements for the years ended December 31, 2014 and December 31, 2015, and all quarterly reports therein, as well as the quarterly reports for the quarters ending March 31, June 30, and September 30, 2016, and that investors should not rely on the financial statements as originally issued. 

On and after January 31, 2017, three putative securities class action complaints were filed in the United States District Court for the Eastern District of Wisconsin on behalf of purchasers of Roadrunner’s publicly-traded common stock, alleging that Defendants had violated the federal securities laws.  On May 19, 2017, the court consolidated these actions into a single action entitled In re Roadrunner Transportation Systems, Inc., No. 17-cv-144-PP (E.D. Wis.) and appointed the Public Employees’ Retirement System of Mississippi as Lead Plaintiff, pursuant to §21D(a)(3)(B) of the Securities Exchange Act of 1934 (the “Exchange Act”), as amended by the Private Securities Litigation Reform Act of 1995, and approved their selection of Barrack, Rodos & Bacine as Lead Counsel.

A year later, before the market opened on January 31, 2018, Roadrunner restated its prior financial results, including reductions in previously materially over-reported net income and materially under-reported expenses.  On March 12, 2018, Lead Plaintiff filed a Consolidated Amended Class Action Complaint for Violations of the Federal Securities Laws ("Complaint"), alleging that the Roadrunner Defendants violated Section 10(b) of the Exchange Act and Rule 10-b5 promulgated thereunder and that all Defendants violated Section 20(a) of the Exchange Act.

On May 7, 2018, counsel for Lead Plaintiff and Defendants, along with representatives of Defendants’ insurance carriers, among others, participated in an all-day mediation in Newport Beach, California, before retired United States District Court Judge Layn R. Phillips, a private mediator engaged by the Settling Parties.  This initial all-day mediation session did not resolve the dispute.  Thereafter, the parties continued to engage in settlement discussions.

On July 23, 2018, the Defendants moved to dismiss the Complaint.  On September 21, 2018, Lead Plaintiff, responded to and opposed the Motions to Dismiss.  

On October 22, 2018, after the opening and opposition briefing on the motions to dismiss and before the deadline for Defendants’ reply brief, Judge Phillips conducted a second mediation session.  The session also concluded without a resolution of the Action.

On November 19, 2018, after further direct communications between the parties and involving Judge Phillips, Lead Plaintiff and Defendants reached an agreement in principle to settle this Action and executed a "Confidential Settlement Term Sheet and Memorandum of Understanding" pursuant to their agreement. On June 19, 2019, the Court issued an Order Preliminarily Approving Settlement and Providing for Notice, thereby allowing the Notice and Claim Form to be issued and made available to all potential Class Members.  Pursuant to the Court’s Minute Entry of August 6, 2019 (ECF No. 90), and subsequent Order of August 14, 2019 (ECF No. 92, available here), on August 14, 2019, Lead Plaintiff, working in conjunction with Heffler Claims Group, the court-appointed claims administrator, disseminated an Amended Notice, available here and on the settlement website at:


Claim Filing Deadline:  Claim Forms must be postmarked no later than November 7, 2019 to be eligible for a payment from the Settlement.

Exclusion Deadline:  To exclude yourself from the Class, you must submit a written request for exclusion so that it is received no later than September 3, 2019, in accordance with the instructions in the Notice.

Objection Deadline:  Any objections to the proposed Settlement, the proposed Plan of Allocation, and/or the request for attorneys’ fees and reimbursement of expenses, must be received no later than September 3, 2019, in accordance with the instructions in the Notice.

The Settlement Hearing: The Settlement Hearing was held on September 23, 2019 at 11:00 a.m., before the Honorable Lynn Adelman, in Courtroom 390 of the United States Courthouse, 517 E. Wisconsin Avenue, Milwaukee, Wisconsin 53202.  On September 26, 2019, the court determined that, among other things, the proposed Settlement is fair, reasonable and adequate and should be approved; the proposed Plan of Allocation is fair and reasonable and should be approved; and Lead Counsel’s motion for an award of attorneys’ fees and reimbursement of expenses should be approved.

More information about the litigation and the settlement are available at the website established by Heffler Claims Administration at


1 All capitalized words are defined in the Settlement Agreement, available here.