Anwar et al v. Fairfield Greenwich Limited et al

Filing 1081

ENDORSED LETTER: addressed to Judge Victor Marrero from David A. Barrett dated 3/13/2013 re: Accordingly, Morning Mist has failed to show any legitimate need for discovery, nor offered any cogent factual objections to the settlement. "see In re Ford Motor supra. Morning Mist's untimely request for discovery of confidential financial information should be rejected. ENDORSEMENT: The Clerk of Court is directed to enter into the public record of this action the letter above submitted to the Court by Lead Plaintiffs. So Ordered. (Signed by Judge Victor Marrero on 3/13/2013) (js)

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March 13.2013

BY FACSIMILE
Judge Victor Marrero
United States District Court
Southern District of New York
500 Pe::arl Slred

New York, New York 10007
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Anwar, ef al. v. Fairfield GreenwiciJ l.imited, et al.
Master File No. 09-CV-OO]] 8 (VM) (FM)

Dear Judge Marrero:
On behalf of Plaintiffs, we respond to the March 11. 2013 letter (Dkt. No. 1078)
from counsel for the .Mon1ing Mi!.t Derivative Plaintiffs ('"Morning Mist"). Morning
Mist is seeking acct:ss to pt:rsonal financial information that was providt:t1 by the FG
Defendants to Plaintiffs. pursuant to a confidentiality agreement, in connection with
negotiation of the proposed ~ettlement. Plaintiff.c; respectfully submit that Morning
Mist'5 request is meritlcss, as it is both untimely and tmsupported by Jawor tact!>. Thwi.
no pre-motion conference is necessary. The Settling Defendants have advised they
concur that Morning Mist's request should be denied.
!)iseovcry by objecting class members is allowed only if the objector offers
"cogent factual obj~ctions to the settlement." In re Ford A4"otor Cu. Bronco II Prods.
Liab. Litig., 1994 WI, 593998, at *4 (E.D. La. Oct. 28. 1994): see Weinherger v.
Kendrick, 69S F.2d 61, 79 (2d eir. 1982). Nor is discovery into settlement negotiations

or

pennissible absent evidence suggesting the settlement may be the product
collusion.
See Grant ThorTon v. ,">yracuse Sav. Bank, 961 F .2d 1042. 1046 (2d Cir. 1992); In re
Lorazepam & Clorazepalt: AnlilruSllilix., 205 F.R.D. 24. 28 (D.D.C. 2001). Morning
Mi5l fai Is both of these tests. The thrust Ml)rning Mist's Objection to the Settlement
(Dkt. t\o. 1(47) is not factual, but concerns the legal point of release of <'l derivative claim
by settling class member~.1 No discovery is sought or warranted on that point. On the
second lest, the Court has already found that the Stipulation of SdtJement "resulted from
good faith, arm's-length negotiations:' Prellminary Approval Order (Dkt. No. I 008) ~ 5.
And as shown below, Morning Mist's application is untimely, and its allegation that
Plaintiff's' counsel have made inconsistent statement'> conceming the fG Defendants'

tinancial pOSition is frivolous.
The only mention by Morning MIst of the amount of the settlement is a single instance
on page 10 of it!; Ohjeclion \vhere it references the "FG Defendants' limited assets"
without objecting to the amount of the settlement
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Judge Victor Marrero
March J3. 2013

Page ,2

Timeliness. Morning Mist's objection is that Class ~fembers ",,'ho participate in
the Settlement mll~t release individual derivative claims against the FG Defendants
arisi~g Ii'om tht: :-;amc factual circumslan(:(:s {\s Anwar..')'e: Dk!, Nu. 1047. 2 Morning
Mist knew when the Stipulation of Settlement and supporting papers were filed over four
months ago, on Novemher 6, 2012, that "the FG Defendants. as part of the settlement
process, provided Plainrlffs' Lead Counsel with wriIten disclosures about their assets and
liabilities" (proposed Notice (Okt. No. 9%-2) at 9-10), and that "the settlemcnt
consideration represents a substantial porlion o~· the assets that might be recovered from
the~e FO Defendants." Prelim. Approval Mem. (Dkt. No. 998) at 5-6.
PlainliiTs n~vt:r said that the Settlement would lcav(: the FG Defendants destilute,
but rather that the Settlement was in. the "best interests of the Settlement Class" in "light
of the [FG Defendants'] depleted finances, continued payment of large legal fees and
e)(penses. and the substantial potential difficulties in collecting on a jUdgment." See Joint
Oed in Support of Proposed Settlement (Dkt. No.1 035) ~ 131; Final Approval Mem.
(Dkt. No. J033) at 3 ("The FG Individual Defendanls. __ could not be expeCi.ed to
contrihute 100% 0 f their available assets to settlement of this action alone. ").
Lnder the Coun's Preliminary Approval Order (Dkt. No. 1008 '123). Morning
Mist wa., required to object to the Settlement or request e-xdusion from the Settlement
Class no later than february 15, 2013. Any objections not made by that date were
waived and are properly denied on that basis. See Yarrington \'. ,,,'o/vay Pharm_ , Inc., (i97
F. Supp. 2d 1057. 1064 (D. Minn. 2010) (collecting cases); In 1'': Initial Public O/ferinK
Sec. Litig.. 671 r. Supp. 2d 467,491 n.179 (S.DN.Y. 2009). Although Morning Mist's
objection mentioned "the FG Defendants' limited a.,;!\ets," it did not raise ;:my factual
i!;slle in that n;gard. See Dkt. No. 1047 at 10. If Morning Mist believed that the t;:xtcnl of
the FG Defendants' remaining assets after funding the Settlement was gignificant, it was
on notice months before its counsel first contacted Plaintiffs' counsel seeking
confidential financial information on March 4, 2013. over two weeks after the deadline

for ohjecti(ln~.

Lack of Factual Basis. Moming Mist's objection to the terms of the release
contained in the Settlement essentially ra.ises a question oflaw. Morning Mist's attempt
to manuiacture a factual dispute by pointing to a statement by Plaintiffs' counsel that "the
~ Although PlaintilT::: responded tC) Morning Mist's Ohjection on the merit~ (.ife
PlaimilT.s' Rl..:ply Memo. (Dkl. No.1 073 a\ 6-10»), the Objection was defective in that it
failed to include. among other things, "the dates and number and dollar amonnts
shares
or limited partnership interests purchased [hy the (')hjector~]. and redeemed if applicable"
andlo "supply documentary proof' of the investments. See proposed NotIce (Dkl. No.
996-2) at 19.

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Judge Victor MCirn:ru
March 13. 20 I J

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Defendants will have assets remaining "fier funding the Settlement" (sc:C Dkt. No.1 060
at 3) is nonsense. That statement is entirely consistenl wit.h <':uLlnsci'~ prior statement").
cited above, that the Hi Defendants are funding the Settlement with "a su bstantial
portion of the assets that mi~bl be recovt:rcd" and "could not be expected to contrihute

100%,"
Accordingly. Morning Mi!)t ha'i lailed to show any legitimate need for discovery,
nor offered "any cogent factual objection) to the settlement." See Tn re Ford }\I'/otor,
supra. Moming IvIisfs untimely request fur di£>covcry of confidential tinancial
information should he rejected.

RC1:::r;~

~Barrett
C<.::

Rubert A. Wallner (by email)

Counsel in Anwar (by email)