In re BigBand Networks, Inc. Securities Litigation

The information below is only a short summary. For additional information, click here to download a copy of the Notice of Pendency of Class Action and Proposed Settlement with All Defendants, Motion for Attorneys’ Fees, and Settlement Hearing (the “Notice”) or call the BigBand Networks, Inc. Securities Litigation Settlement Helpline at 866-905-8125 to request a copy of the Notice by mail.

The Class consists of those individuals or entities that purchased BigBand Networks, Inc. (“BigBand” or the “Company”), common stock (Ticker Symbol NASDAQ: BBND) from March 15, 2007 to October 30, 2007, inclusive (the “Class Period”). If you have purchases during the Class Period, you could get a payment from this class action settlement.

The settlement resolves a federal class action lawsuit alleging that BigBand, certain of its officers and directors, and the underwriters of its March 15, 2007 initial public offering (“IPO”) violated the federal securities laws by including materially untrue and/or misleading statements and/or omissions in BigBand’s prospectus and registration statement issued in connection with its IPO.

Defendants (defined below) deny Lead Plaintiff’s (defined below) allegations. The Settling Parties^[1] disagree on whether Defendants violated any federal securities laws, whether the alleged violations actually caused any damages to the Class Members, and the average amount of damages per share that would be recoverable if Lead Plaintiff prevailed on his claims.

The federal court has certified for settlement purposes only a class consisting of all Persons or entities that purchased the common stock of BigBand pursuant or traceable to BigBand’s March 15, 2007 Initial Public Offering Prospectus and Registration Statement (the “Prospectus”), or on the open market from March 15, 2007 to October 30, 2007, inclusive (the “Class”).^[2]

The settlement will provide an $11,000,000 cash Settlement Fund for the benefit of investors (“Class Members”) who bought shares of common stock of BigBand pursuant or traceable to the Prospectus or on the open market from March 15, 2007, to October 30, 2007, inclusive, and held them until after May 4, 2007. The average per-share benefit to Class Members from this settlement will be $0.86 before deduction of Court-approved fees and expenses.

The Court-appointed lead plaintiff in this case is Gwyn Jones (“Lead Plaintiff”). The defendants are BigBand; Company officers and/or directors Amir Bassan-Eskenazi, Ran Oz, Frederick Ball, Gal Israely, Dean Gilbert, Ken Goldman, Lloyd Carney, Bruce Sachs, Robert Sachs, and Geoffrey Yang (“Individual Defendants”); and Morgan Stanley & Co. Incorporated, Merrill Lynch, Pierce, Fenner & Smith Incorporated, Jefferies & Company, Inc., Cowen and Company, LLC, and ThinkEquity LLC, formerly known as ThinkEquity Partners LLC (“Underwriter Defendants”) (collectively, “Defendants”).

Your legal rights are affected whether you act or do not act. Read this notice carefully.

YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT
SUBMIT A CLAIM FORM BY SEPTEMBER 25, 2009	The only way to get a payment in this settlement. Click here to download the Claim Form.
EXCLUDE YOURSELF FROM THE LAWSUIT BY SUBMITTING AN OPT-OUT FORM BY AUGUST 18, 2009	Get no payment pursuant to this settlement. This is the only option that allows you to be a part of any other lawsuit against the Defendants and their affiliates involving the claims released by this settlement. Additional details about the requirements for an effective exclusion request are described in the Notice in the answer to Question No. 4.
OBJECT BY AUGUST 18, 2009	Write a letter to the Court objecting to the settlement. You must still file a claim if you want to receive payment from the settlement. Additional details about the requirements for filing an objection are described in the Notice in the answer to Question No. 12.
GO TO A HEARING ON SEPTEMBER 15, 2009	Ask to speak in Court about the settlement. Additional details about the hearing are included in the Notice in the answer to Question No. 14.
DO NOTHING	Get no payment from this settlement. You will also be giving up your rights regarding all claims released by this settlement and any other lawsuit as to the stock issued pursuant to the IPO.

These rights and options—and the deadlines to exercise them—are explained in the Notice.
The Court in charge of this case still has to decide whether to approve the settlement. Payments will be made if the Court approves the settlement and after any appeals by Class Members are resolved.

SUMMARY NOTICE

Statement of Class Recovery Under the Settlement

Pursuant to the settlement described herein, an $11,000,000 cash Settlement Fund has been established. Lead Plaintiff estimates that there were approximately 12.7 million shares of BigBand common stock traded during the Class Period that may have been damaged. Lead Plaintiff estimates that the “average recovery per damaged share” of BigBand common stock under the settlement is $0.86 before deduction of fees and expenses. A Class Member’s actual recovery will be a proportion of the Net Settlement Fund (defined below), determined by that Claimant’s recognized loss (i.e., a loss proved by timely submission of a valid Proof of Claim and Release form (“Claim Form”)) as compared to the total recognized losses of all Class Members. This proportional allocation is called “proration.” Seethe Plan of Allocation beginning on Page 6 for more information.

Statement of Claims, Issues, Defenses, and Potential Outcome of Case

Lead Plaintiff alleges that the Defendants violated Sections 11, 12(a)(2), and 15 of the Securities Act of 1933 by issuing or participating in the issuance of the Prospectus. Lead Plaintiff alleges the Prospectus contained materially untrue or misleading statements or omissions regarding BigBand’s cable modem termination system products, business model, revenues, and obsolete inventory. The Defendants denied Lead Plaintiff’s allegations and filed motions to dismiss the Class Action Complaint for Violation of Securities Laws (the “Complaint”). The Defendants argued that BigBand’s Prospectus was not false or misleading, that Lead Plaintiff did not adequately allege any valid claim under the federal securities laws, and that Lead Plaintiff did not have standing to assert certain of the claims. The Settling Parties reached the settlement described in this notice before the Court considered the Defendants’ motions to dismiss the Complaint.

At the time the settlement was reached, Lead Plaintiff faced the possibility that the Complaint would be dismissed. Even if the Complaint was not dismissed, Lead Plaintiff also faced the possibility that the proposed Class would not be certified or that some or all of the claims would be dismissed before trial. Had the case gone to trial, Defendants would have asserted that BigBand’s Prospectus fully complied with federal securities laws and did not contain any false or misleading statements or omissions. Defendants would also contest (1) the amount of damages, if any; (2) the extent to which the various statements that Lead Plaintiff alleged were materially false or misleading influenced (if at all) the trading prices of BigBand’s common stock at various times during the relevant time period; and (3) whether Lead Plaintiff had standing to assert all the claims in the Complaint. Thus, had this action continued, Lead Plaintiff and the proposed Class faced the possibility that they would not obtain any recovery. This settlement enables the Class to recover a percentage of the alleged damages as calculated by Co–Lead Counsel in conjunction with their consultants, without incurring any additional risk. As a result, Lead Plaintiff and Co–Lead Counsel believe this settlement is a fair and reasonable recovery.

Statement of Attorneys’ Fees and Costs Sought

Co–Lead Counsel will move the Court to award attorneys’ fees in an amount not greater than one quarter (25%) of the gross Settlement Fund and reimbursement of expenses incurred in connection with the prosecution of this action not to exceed $100,000. The requested fees and expenses would amount to an average of not more than $0.22 per damaged share in total for fees and expenses. SeeQuestions 8–11 below for more information. In addition, Co–Lead Counsel will seek reimbursement to Lead Plaintiff for reasonable time, costs, and expenses incurred directly related to representation of the Class, in an amount up to $12,500. Class Members are not personally liable for any such fees, expenses, or compensation.

Further Information

Further information regarding the action and the Notice may be obtained by contacting Co–Lead Counsel: Lewis S. Kahn, Esq., Kahn Swick & Foti, LLC, 650 Poydras Street, Suite 2150, New Orleans, LA 70130, telephone: 504-455-1400; or Reed R. Kathrein, Esq., Hagens Berman Sobol Shapiro LLP, 715 Hearst Avenue, Suite 202, Berkeley, CA 94710, telephone: 510-725-3000.

Reasons for the Settlement

For Lead Plaintiff, the principal reason for the settlement is the benefit to be provided to the Class now. This benefit must be compared to the risk that no recovery might be achieved after a contested trial and likely appeals, possibly years into the future. Lead Plaintiff further considered, after conducting a substantial investigation into the facts of this case, the risks to proving liability and damages and, if successful in doing so, whether a larger judgment could ultimately be collected. For Defendants, who deny all allegations of wrongdoing or liability whatsoever, the principal reason for the settlement is to eliminate the expense, risks, and uncertain outcome of the litigation.

Additional documents regarding the case are also available for download on this site by clicking here.

If you have questions about how to file a claim or general questions regarding this Action, you may call the BigBand Networks, Inc. Securities Litigation Settlement Helpline at 866-905-8125 or send an email to info@bigbandsecuritieslitigation.com.

^[1]All capitalized terms not otherwise defined on this page shall have the meaning provided in the Stipulation of Settlement.

^[2] Excluded from the Class are the Defendants, the officers and directors of the Defendants at all relevant times, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which the Defendants have or had a controlling interest. Also excluded from the Class are those Persons who timely and validly request exclusion from the Class pursuant to the procedures explained below.