 |
Settlement List |
Top 5 Plaintiffs' Law Firms: 2008 Final Settlement Amounts Click to see the full accompanying graphic. |
Feature StoryRiskMetrics Group Releases SCAS 50 ReportBernstein Litowitz
obtained the most in final 2008 settlement dollars.
Case UpdateThe latest settlements and dismissals of securities class-action suits.Check Your MailboxFunds recently have been disbursed (or approved for disbursal) in the following cases.In The NewsJudge Dismisses Enron Investor Lawsuit Against Three BanksThe SEC allows Alaska Air
Group to exclude a novel shareholder proposal, a review of
litigation over mistimed stock options. Comments WelcomeFor comments on the content of the
newsletter, please contact Ted Allen, the
editor-in-chief. |
Feature StoryRiskMetrics Group Releases SCAS 50 Report
RiskMetrics Group has released its annual Securities Class Action Services list of the top 50 plaintiffs’ law firms. The law firms on the SCAS 50 list are ranked by the total dollar amount of final securities class-action settlements occurring in 2008 in which the firms served as lead or co-lead counsel. Bernstein Litowitz Berger & Grossmann obtained the most final settlement dollars, negotiating 11 settlements totaling $711.95 million. Barroway Topaz Kessler Meltzer & Check was second with 15 accords totaling $536.15 million, followed by Coughlin Stoia Geller Rudman & Robbins (29 settlements totaling $484.39 million); Labaton Sucharow (12 accords totaling $380.71 million); and Grant & Eisenhofer ($326.85 million through three settlements). Grant & Eisenhofer achieved the highest average settlement, averaging $109 million in its three settlements. The average settlement amount is an important indicator of which law firms are consistently bringing and settling high-impact cases. Coughlin Stoia led all firms in total final settlements obtained (29), followed by Barroway Topaz (15) and the Milberg firm (13). According to Adam Savett, director of Securities Class Action Services, “We can expect the number of new cases filed, and thus eventual settlements to continue trending at or above historical levels, due in part to the ongoing expansion of the fallout from the credit crisis. While there weren’t any so called ‘mega-settlements’ finalized in 2008, we saw more than a dozen settlements valued at more than $50 million.” RiskMetrics has published its SCAS 50 list for the past six years. The list is intended to help institutional investors maximize shareholder value by highlighting those firms bringing in the most settlement dollars and playing the most active role in U.S. class-action cases. The SCAS 50 list was compiled using data from the SCAS database, which tracks, among other things, federal and state shareholder class actions. SCAS also contacted each law firm to seek confirmation of settlement data. The SCAS 50 does not include data on ERISA or derivative lawsuits. The SCAS 50 reflects only those final settlements that resulted in the creation of a settlement fund on behalf of shareholders. Cases which resulted in no settlement fund being created, but instead had only non-monetary settlement terms (such as corporate governance changes, changes in the terms of a merger, etc.) are not included. Further information on such settlements can be found in the SCAS database. The SCAS 50 credits law firms that served as lead or co-lead counsel in a case with the entire settlement fund, regardless of how many other firms served as lead or co-lead counsel in the case. Thus, for a settlement of $1 million dollars where there were two lead counsel, the SCAS 50 credits both law firms with a $1 million settlement rather than dividing the settlement fund in half. For purposes of this report, law firms are considered to be lead or co-lead counsel if they are identified as such in the notice of settlement distributed to shareholders. To access the SCAS 50 for 2008 report, please visit here.
|
Case UpdatesTentative SettlementsSunrise Senior Living Virginia-based Sunrise offers senior living services, including independent living and assisted living care for individuals with Alzheimer's, as well as nursing and rehabilitative care. http://scas.issproxy.com/casesummary.php?CaseId=29709 American International Group (2004) New York-based AIG, which was rescued by the U.S. government in September, is engaged in a broad range of insurance and insurance-related activities in the United States and abroad. http://scas.issproxy.com/casesummary.php?CaseId=29060&SettlementId=14157 Hawaiian Airlines (SEC) Hawaiian serves 20 domestic and international destinations in the Pacific region. The company specializes in air transportation among the Hawaiian Islands and bringing visitors to Hawaii from points in the Western U.S. and the South Pacific. http://scas.issproxy.com/casesummary.php?CaseId=30966
Other recent tentative settlements include: Targanta Therapeutics, Michael Baker Corp., Sterling Financial, MBNA (2005) and BP Prudhoe Bay Royalty Trust (2006) (W.D. Wash.).
Dismissals
Impac Mortgage Holdings (2007) Impac is a real estate investment trust with executive offices in Irvine, California. http://scas.issproxy.com/casesummary.php?CaseId=30002
Medtronic (2007) Minneapolis-based Medtronic engages in the development,
manufacture, and marketing of medical devices worldwide.
PXRE Group PXRE, a Bermuda corporation, provides catastrophe reinsurance
products and services to both primary insurers and
reinsurers.
Other recent dismissals include: Orthoclear Holdings, MFS Funds, Genelabs Technologies (N.D. Cal.), Xinhua Finance Media, Penn National Gaming, Biovail (2006), Wachovia (2008) (E.D.N.Y.) and VMWare.
Tentative DismissalsThe United Rentals (2007) (D. Conn.) and GPC Biotech cases were tentatively dismissed by a court. The investor plaintiffs were given leave to file an amended complaint. If they do not do so, and don't appeal, the dismissal will become final.
Class CertificationThe court ruled in favor of class certification in the following cases: Boston Scientific (2005), Infineon Technologies, Prestige Brands Holdings, and Tellabs.
|
In the NewsBy Ted Allen, Director of Publications
Judge Dismisses Enron Investor Lawsuit Against Three BanksOn March 5, a judge rejected an attempt by Enron investors to revive their class-action lawsuit against Credit Suisse, Barclays, and Merrill Lynch over the energy company’s 2001 bankruptcy. The three banks declined to join earlier settlements totaling $7 billion that investors negotiated with Citigroup, JPMorgan Chase, Canadian Imperial Bank of Commerce, and other defendants from 2004 to 2006. In March 2007, a federal appeals court dismissed class-action claims against the non-settling banks. After the Supreme Court refused to hear the investors' appeal in 2008 and issued a ruling in a separate case that limited the liability of advisers and business parties, the Enron plaintiffs revised their theory of liability. The plaintiffs argued that the investment banks had a duty to disclose what they knew about Enron because they issued underwriting documents and reports on the company. However, U.S. District Judge Melinda Harmon concluded that “the financial institution defendants owed no duty to Enron investors or the market at large” to disclose their transactions, according to Bloomberg News. “We are naturally disappointed by this latest ruling but will be reviewing it carefully to determine possible next steps in pursuing the case,” said Trey Davis, director of special projects for the University of California, the lead plaintiff in the case. The ruling does not affect the settlements reached by the other banks. The plaintiffs will not have an opportunity to further amend their complaint. Shareholder Proposal on Litigation Reform Excluded at Alaska AirA novel securities reform proposal will not appear on the ballot at Alaska Air Group after the company prevailed in a no-action challenge at the Securities and Exchange Commission. The proposal was rejected on technical grounds without a decision on its merits. In a March 5 ruling, the staff of the SEC’s Corporation Finance Division said it concurred with the company’s argument that investors had violated Rule 14a-8(c), which limits each shareholder to one proposal per meeting. The resolution, filed by Alaska Air employee Steve Nieman, was part of trio of proposals submitted under a common fax page by Richard Foley, who represented Nieman and two other investors. While the SEC did not elaborate on its reasoning, it appears that the staff was persuaded by the company’s argument that the investors granted too much proxy authority to Foley to act on their behalf, which made him the beneficial owner of their shares, and thus ineligible to file the three resolutions. Nieman's resolution urged directors to initiate the process to amend the company’s certificate of incorporation to provide a partial waiver of the “fraud of the market” presumption that underlies many class-action cases. That presumption, which was recognized by the U.S. Supreme Court in Basic v. Levinson in 1988, allows investors to file lawsuits under Rule 10b-5 even if they did not directly rely on a particular corporate misstatement or omission. The first-of-its-kind resolution was based on a model proposal prepared by Professor Adam Pritchard of the University of Michigan. (For more details, please see the November 2008 edition of the SCAS Alert.) In his supporting statement, Nieman says the proposal would reduce the incentive for plaintiffs’ lawyers to sue the company after a stock drop and would instead target lawsuits toward executives who reap large compensation gains as a result of fraud. Pritchard told the SCAS Alert that he has purchased Alaska Air shares so he can file his resolution at the company next year. To see the SEC’s ruling, click here. An Update on Backdating CasesOf the 39 stock-option backdating cases that have been filed as securities class actions, 26 have now reached a resolution, according to March 10 SCAS report. Of the resolved cases, nine of those cases have been dismissed and 17 have settled. The 17 settlements total $1.41 billion, for an average of $83.1 million. If one excludes the largest accord (UnitedHealth Group’s $895 million settlement), the average would be $32.37 million. The options backdating cases have settled more quickly on average than other securities cases, according to SCAS data. The 17 cases have settled in an average of 585 days. Removing the two outliers, Mercury Interactive, and Brocade Communications, which were filed earlier and added the options backdating allegations in a later amended complaint, drops the average time from the filing of an initial complaint to a tentative settlement for the remaining 15 cases to 537 days. The numbers have been slowly creeping up as the remaining cases linger, but the average is still below historical levels. Adam Savett, director of SCAS, contributed to this article. |
