In re Charles Schwab Corp. Securities Litigation

Filing 1134

ORDER APPROVING (1) DISTRIBUTION OF REMAINING SETTLEMENT FUNDS TO CLASS MEMBERS; (2) PAYMENT OF ADMINISTRATION FEES; AND (3) PAYMENT OF SECOND HALF OF ATTORNEY'S FEE AWARD by Judge Alsup granting #1112 Motion for Disbursement of Funds (whalc2, COURT STAFF) (Filed on 3/20/2012)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA
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IN RE:

No. C 08-1510 WHA

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For the Northern District of California

United States District Court

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CHARLES SCHWAB CORPORATION
SECURITIES LITIGATION.

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This Document Relates to
All Cases.

ORDER APPROVING (1) DISTRIBUTION
OF REMAINING SETTLEMENT FUNDS
TO CLASS MEMBERS; (2) PAYMENT
OF ADMINISTRATION FEES, AND
(3) PAYMENT OF SECOND HALF
OF ATTORNEY’S FEE AWARD

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Class counsel, in its fourth supplemental filing, has moved for distribution of the

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remaining settlement funds to class members, payment of reasonable claims administration fees,

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and payment of the second half of the attorney’s fee award (Dkt. No. 1132). Final approval of the

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settlement was granted on April 19, 2011 (Dkt. No. 1101). The first mailing of settlement checks

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took place on June 27, 2011 (Dkt. No. 1132 at 2).

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On January 12, 2012, a status conference was held and class counsel was ordered to do a

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second mailing to class members who had uncashed checks in an amount above $25. Prior to the

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second mailing, class counsel requested approval to include all class members who had not

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cashed their checks in the second mailing (Dkt. No. 1125). Approval was granted. An additional

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5,410 class members requested that their checks be reissued, representing a total value of

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$5,044,350.79 (Dkt. No. 1132 at 2). The checks were reissued (Dkt. No. 1133 at 3).

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Class counsel reported approximately 94% of all checks mailed to members of the Federal

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class were cashed and approximately 95% of all checks mailed to members of the California class

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were cashed (Dkt. No. 1132 at 2–3) (representing the number of checks cashed).

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Class counsel has indicated that assuming all recently distributed checks are cashed, and

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that the outstanding balance owed to Gilardi is paid, there will be approximately $1,900,000

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remaining to redistribute to federal class members and $220,000 to redistribute to California class

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members after the fees and expenses of making the proposed redistribution are reserved (id. at 2).

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The stipulations of settlement provided for the redistribution of remaining settlement

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funds after six months from the initial distribution, if possible (Dkt. Nos. 693-1 and 784). Six

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months has now passed since the initial distribution. A second mailing to all class members has

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been completed. It is now time to proceed with redistribution of the remaining settlement funds.

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Class counsel proposes to redistribute remaining settlement funds to class members who
cashed their checks, subject to a $100 minimum. This would result in approximately 1,830

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For the Northern District of California

United States District Court

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federal class members and 620 California class members receiving a redistribution check (Dkt.

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No. 1132 at 3). The remaining balances in the federal distribution account and the California

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distribution account, after paying the balance owed to Gilardi (as set forth below), and making the

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necessary reserves for all reissued checks and the estimated fees and costs associated with the

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redistribution, shall be redistributed to class members who cashed their settlement check. Each

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eligible class member’s share of the reallocation will be paid pro rata based on his or her total

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recognized loss as calculated in the initial distribution. This redistribution will be subject to a

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minimum $100 check size to make it cost-effective.

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Class counsel also seeks approval of payment to Gilardi, the class administrator. The

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outstanding balance owed to Gilardi is $1,782,519.44 (Dkt. No. 1333 at ¶ 8). Class counsel

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proposes splitting payment of this amount between the settlements funds as follows: $178,251.94

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from the California settlement fund and $1,604,267.50 from the federal settlement fund. The

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Court has reviewed the detailed breakdown of all tasks performed by Gilardi in the settlement

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notice, claims processing, and distribution stages of the settlement administration, and finds it to

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be reasonable. Payment to Gilardi in the amount of $1,782,519.44 is APPROVED, with

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$178,251.94 paid from the California distribution account and $1,604,267.50 paid from the

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federal distribution account.

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Class counsel requests payment of the second half of the attorney’s fee award plus

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interest. The second half of the fee installment, which has been sitting in escrow, is in the

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following amounts: $8,806,785.98 in the federal escrow account and $2,051,098.39 in the

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California escrow account. Class counsel were awarded attorney’s fees of $17,604,474.07 from

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the federal settlement and $4,100,166.51 from the California settlement, plus interest (Dkt. No.

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1101 at 15). The interest earned on these amounts comes to $9,097.89 and $2,030.27,

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respectively, bringing the total attorney’s fee award to $17,613,571.96 and $4,102,196.78 (Dkt.

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No. 1113 at ¶ 10). No problems have been reported in 30 days of the distribution and

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approximately 94% of all checks mailed to members of the Federal class were cashed and
approximately 95% of all checks mailed to members of the California class were cashed. Checks

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For the Northern District of California

United States District Court

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have been redistributed to those class members who responded to the second mailing. It is now

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time to pay the second half of the attorney’s fee award to class counsel. Payment to class counsel

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in the following amounts: $8,806,785.98 from the federal escrow account and $2,051,098.39

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from the California escrow account, is APPROVED.

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Finally, class counsel requests reimbursement of $7,435.49 from the federal distribution

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account and 1,243.18 from the California distribution account “for escrow fees that were incurred

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but not assessed until shortly after the monies were transferred out of escrow for distribution to

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class members. As a result, these costs were deducted from the attorney’s fee award that

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remained in escrow, but should have been paid out of the settlement fund” (Dkt. No. 1132 at 4).

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Reimbursement to class counsel in the amounts of $7,435.49 from the federal distribution account

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and $1,243.18 from the California distribution account is APPROVED.

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IT IS SO ORDERED.

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Dated: March 19, 2012.

WILLIAM ALSUP
UNITED STATES DISTRICT JUDGE

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