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Settlement of the InkStop Lawsuits

InkStop, Inc. (“InkStop”) went out of business on October 2, 2009, leaving employees unpaid for work performed after September 13. On October 4, we filed a Lawsuit against InkStop and two of its Executive Officers, Dirk Kettlewell and Dawn Callahan-Kettlewell.

On November 5, InkStop filed a Chapter 7 petition in Bankruptcy Court. Thereafter, InkStop was dropped as a defendant in the first Lawsuit, leaving only the Kettlewells as defendants. Simultaneously, we filed a second Lawsuit against other Executive Officers and Directors.

We are now pleased to announce that we reached a Settlement of the Lawsuits with the former members of the Board of Directors of InkStop. The Settlement is explained below.

The Settlement makes substantial Settlement Payments available to all eligible employees of InkStop in the following two groups: (a) all salaried and hourly employees of InkStop, Inc. who were not paid for work performed after September 13, 2009 (“the Non-Payment Group”); and (b) all salaried Store Managers of InkStop, Inc. after January 7, 2008 (“the Store Manager Group”).

The Settlement was reached between the Representative Plaintiffs and all the former members of InkStop’s Board of Directors, and on March 31, 2010, was approved by the U.S. District Court as fair, reasonable, and adequate.

A. Settlement Payments to InkStop Employees and Released Claims
The Total Settlement Amount is $660,000. That amount, after deductions approved by the Court, will be divided into Individual Payments to eligible employees as follows. Ninety percent (90%) will be allocated to employees in the Non-Payment Group, who are eligible for Individual Payments proportionate to their respective unpaid wages for work performed after September 13, 2009 as calculated by the Department of Labor, up to a maximum payment of $4,920.50. Ten percent (10%) will be allocated to employees in the Store Manager Group, who are eligible for a per person payment in the amount of $169.34. Store Managers who fall within both Groups are eligible for two Individual Payments, one from each category.

The deductions approved by the Court include attorneys’ fees in the amount of 16.66% of the Total Settlement Amount. (To maximize the Individual Payments to employees, Plaintiffs’ Counsel chose to reduce their customary attorneys’ fee of 33.33% by one-half). Also approved by the Court are reimbursements of litigation expenses of approximately $6,500, and service awards of $2,500 each to the Representative Plaintiffs for their service in the lawsuits.

In exchange, the InkStop Lawsuits will be dismissed, and participating employees will release all claims for unpaid wages under the Fair Labor Standards Act as well as state statutes and common law against InkStop, Inc. and any related persons and entities including its directors, officers, and employees. The released claims include any claims that were or could have been made in the InkStop Lawsuits, as well as any claims in the InkStop bankruptcy.

B. Advantages of the Settlement and Plaintiffs’ Counsel’s Recommendation
We strongly recommend the Settlement. It offers substantial settlement payments to employees, without the delay, uncertainty, and risk of continuing with the InkStop Lawsuits or awaiting the outcome of the InkStop bankruptcy (which may provide no recovery at all). Before deduction of attorneys’ fees, expenses, and service awards, participating employees in the Non-Payment Group will recover approximately 97.37% of their recoverable wages under the Fair Labor Standards Act. The individual payments to the Store Manager Group, although lower in amount, are fair and equitable considering the less certain nature of their claim for unpaid overtime compensation.

To participate in the settlement, you must complete and return a Settlement Form entitled “Consent to Opt-Into Lawsuit, Release and Dismiss Claims.” You can return the Settlement Form by: (a) mailing it to Plaintiffs’ Counsel; (b) faxing it to Plaintiffs’ Counsel at 216-696-7005; or (c) scanning and emailing it to Plaintiffs’ Counsel at

You will receive a formal notice in the mail from the Court, and that Notice will include a copy of your Settlement Form. You can also receive your Settlement Form now by emailing us at

The amount of your Settlement Payment will be printed on your Settlement Form.

There are two payment dates. Eligible employees who return signed Settlement Forms by April 28, 2010 will receive settlement checks in approximately May, 2010.

The final deadline for returning signed Settlement Forms will be several months later. Checks will be mailed at the conclusion of the case which is anticipated to be August or September 2010.

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