General Retirement System of the City of Detroit v. The Wells Fargo Mortgage Backed Securities 2006-AR18 Trust et al

Filing 480

Order by Hon. Lucy H. Koh granting 478 Motion for Approval of Distribution Plan.(lhklc1, COURT STAFF) (Filed on 5/30/2013)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA - SAN JOSE DIVISION

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IN RE WELLS FARGO MORTGAGEBACKED CERTIFICATES
LITIGATION

Civil Action No. 09-cv-01376-LHK
CONSOLIDATED CLASS ACTION
ECF

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ORDER APPROVING DISTRIBUTION PLAN
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Case No. 09-cv-01376-LHK

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Lead Plaintiffs the Alameda County Employees’ Retirement Association, Government of

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Guam Retirement Fund, New Orleans Employees’ Retirement System and Louisiana Sheriff’s

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Pension and Relief Fund (collectively, “Lead Plaintiffs”), on notice to Defendants’ Counsel, moved

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this Court for an order approving the distribution plan for the Net Settlement Fund in the above-

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captioned class action (the “Action”), and the Court having considered all the materials and

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arguments submitted in support of the motion, including the Declaration of Jennifer M. Keough in

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Support of Motion for Approval of Distribution Plan (the “Keough Declaration”) and Lead Plaintiffs’

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Notice of Unopposed Motion and Motion for Approval of Distribution Plan; Memorandum of Points

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and Authorities in Support Thereof, submitted therewith;

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NOW, THEREFORE, IT IS HEREBY ORDERED THAT:

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1. This Order incorporates by reference the definitions in the Stipulation of Settlement dated

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July 5, 2011 (the “Stipulation,” ECF No. 440), and all terms used herein shall have the

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same meanings as set forth in the Stipulation and the Keough Declaration.

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2. This Court has jurisdiction over the subject matter of the Action and over all parties to the
Action, including all Class Members.

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3. The administrative recommendations to accept claims, including the otherwise valid

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claims filed after the original December 7, 2011 deadline (“Late Claims”) but before

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November 27, 2012, and to reject wholly ineligible or otherwise deficient claim, as

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recommended by the Claims Administrator, The Garden City Group, Inc. (“GCG”), as

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stated in the Keough Declaration, are adopted;

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4. Lead Plaintiffs’ plan for distribution of the Net Settlement Fund to Authorized Claimants
is APPROVED. Accordingly,

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a. GCG will calculate award amounts to all Authorized Claimants as if the entire Net

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Settlement Fund was to be distributed now by calculating their pro rata share of

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the fund in accordance with the Court-approved Plan of Allocation (the Claimant’s

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“Distribution Amount”).

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b. GCG will, pursuant to the terms of the Court-approved Plan of Allocation,
eliminate from the distribution list any Authorized Claimant whose Distribution
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Amount calculates to less than $10.00. Such Claimants will not receive any

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distribution from the Net Settlement Fund.

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c. After eliminating Claimants who would have received less than $10.00 from the

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distribution list, GCG will recalculate the distribution amounts for Authorized

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Claimants who would have received $10.00 or more pursuant to the calculations

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described in subparagraph b. above.

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d. GCG will then conduct an Initial Distribution of the Net Settlement Fund as
follows:

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i. With respect to Authorized Claimants whose distribution amount calculates

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to less than $100 pursuant to subparagraph c. above, GCG will distribute to

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such Claimants their full distribution amount (“Claims Paid in Full”).

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These Claimants will get no additional funds in subsequent distributions.

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ii. With respect to Authorized Claimants whose distribution amount calculates

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to $100 or more pursuant to subparagraph c. above, GCG will distribute to

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such Claimants 95% of their distribution amounts. The remaining 5% of

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their payments will be held in reserve (the “Reserve”) to address any

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claims that ultimately are determined to be eligible to participate in the

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Settlement, and for any other contingencies that may arise. To the extent

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the Reserve is not depleted, the remainder will be distributed in subsequent

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distributions as ordered by the Court.

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e. In order to encourage Authorized Claimants to promptly cash their Distribution

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checks, and to avoid or reduce future expenses relating to unpaid Distribution

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checks, all Distribution checks will bear a notation “CASH PROMPTLY, VOID

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AND SUBJECT TO RE-DISTRIBUTION IF NOT CASHED BY [DATE 90

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DAYS AFTER ISSUE DATE].”

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f. So that as many Authorized Claimants as possible cash their checks, GCG will

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perform extensive follow-up with those Authorized Claimants whose checks are

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initially uncashed, either because they are returned as undeliverable or because the
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Authorized Claimant simply did not cash the check after a period of time elapses.

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For Authorized Claimants whose checks are returned as undeliverable, GCG will

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endeavor to locate new addresses by running the undeliverable addresses through

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the USPS National Change of Address database and, where appropriate, via

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Internet search techniques and by calling the Authorized Claimants. Where a new

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address is located, GCG will update the database accordingly and re-issue a

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distribution check to the Authorized Claimant at the new address. For any

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Authorized Claimants whose distributions are not returned, but who simply do not

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cash their checks, beginning 30 days after the checks are distributed and

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continuing through the 90th day, GCG will use a mix of automated and

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personalized telephone calls to urge such Authorized Claimants to cash their

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distribution checks. Authorized Claimants will be informed that, if they do not

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cash their checks within 90 days from the mail date, their payment check will

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lapse, their entitlement to recovery will be irrevocably forfeited, and the funds will

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be re-allocated to other Authorized Claimants. In the event an Authorized

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Claimant loses or damages his, her or its check, or otherwise requires a new check,

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GCG will issue replacements. Distribution re-issues will be undertaken only upon

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written instructions from the Authorized Claimant, provided that the Authorized

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Claimant returns the first check, where appropriate. If a distribution is deemed

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lost, GCG will void the initial payment check prior to re-issuing a payment.

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g. Authorized Claimants who do not cash their Initial Distribution checks within the

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time allotted will irrevocably forfeit all recovery from the Settlement. The funds

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allocated to all such stale-dated checks will be available in the re-distribution to

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other Authorized Claimants. Similarly, Authorized Claimants who do not cash

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subsequent distributions within the time allotted will irrevocably forfeit any further

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recovery from the Settlement.

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h. GCG will conduct a second distribution of the Net Settlement Fund (the “Second

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Distribution”), pursuant to which any amount remaining in the Net Settlement
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Fund, after the Initial Distribution (including the Reserve and the funds for all void

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stale-dated or returned checks), after deducting GCG’s reasonable fees expected to

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be incurred in connection with the Second Distribution and the expenses incurred

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in connection with administering the Settlement for which GCG has not yet been

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paid, and after the payment of any estimated escrow fees and taxes and the costs of

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preparing appropriate tax returns, will be distributed to all Authorized Claimants

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from the Initial Distribution who (1) were not Claims Paid in Full, (2) cashed their

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distribution payment, and (3) are entitled to at least $10 from the redistribution

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based on their pro rata share of the remaining fund.

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i. In order to allow a final distribution of any remaining funds in the Net Settlement

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Fund after completion of the Second Distribution, whether by reason of returned

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funds, tax refunds, interest, uncashed checks, or otherwise:

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i. If cost effective, not less than six months after the Second Distribution is

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conducted, GCG will conduct a further distribution of the Net Settlement

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Fund, pursuant to which all funds remaining in the Net Settlement Fund,

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after payment of any unpaid expenses or fees incurred or to be incurred in

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connection with administering the subsequent distributions from the Net

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Settlement Fund, and after the payment of any estimated escrow fees or

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taxes and the costs of preparing appropriate tax returns, shall be distributed

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to Authorized Claimants who cashed their Second Distribution checks and

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who would receive at least $10 in such further distribution, with additional

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redistributions thereafter to be conducted on the same terms in six-month

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intervals until GCG and Lead Counsel determine that further redistribution

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is not cost-effective; and

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ii. At such time as GCG and Lead Counsel determine that further

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redistribution is not cost-effective, Lead Counsel shall seek direction from

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the Court with respect to the disposition of the balance of the Net

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Settlement Fund, after payment of any unpaid expenses or fees incurred in
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connection with administering the Net Settlement Fund and after the

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payment of any estimated escrow fees and taxes and the costs of preparing

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appropriate tax returns.

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j. All persons involved in the review, verification, calculation, tabulation, or any

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other aspect of the processing of the Proofs of Claim submitted herein, or

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otherwise involved in the administration or taxation of the Settlement Fund or the

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Net Settlement Fund, are released and discharged from any and all claims arising

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out of such involvement, and all Class Members, whether or not they receive

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payment from the Net Settlement Fund, are barred from making any further claims

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against the Net Settlement Fund, Lead Plaintiffs, Lead Counsel, the Claims

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Administrator, the Escrow Agent or any other agent retained by Lead Plaintiffs or

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Lead Counsel in connection with the administration or taxation of the Settlement

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Fund or the Net Settlement Fund beyond the amount allocated to Authorized

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Claimants.

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k. Unless otherwise ordered by the Court, no Proof of Claim received after

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November 27, 2012, may be accepted for payment, and no further adjustments to

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Proofs of Claim received may be made after November 27, 2012.

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l. Unless otherwise ordered by the Court, one year after the Initial Distribution, GCG

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will destroy the paper copies of the Proofs of Claim and all supporting

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documentation, and three years after the final distribution, GCG will destroy

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electronic copies of the same.

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5. All of the fees and expenses incurred by GCG in connection with its administration of the

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Settlement and to be incurred in connection with the Initial Distribution are approved;

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accordingly, Lead Counsel shall direct payment of $240,895.63 out of the Settlement Fund

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to GCG for such remaining unpaid fees and expenses; and

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6. The Court retains jurisdiction to consider any further applications concerning the

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administration of the Settlement, and such other and further relief as this Court deems

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appropriate.
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IT IS SO ORDERED

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Dated: May 30, 2013

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________________________________
HONORABLE LUCY H. KOH
UNITED STATES DISTRICT JUDGE

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