Anwar et al v. Fairfield Greenwich Limited et al
Filing
1398
SETTLEMENT AGREEMENT Citco Defendants. Document filed by Julia Anwar. (Attachments: #1 Exhibit A, #2 Exhibit A-1, #3 Exhibit A-2, #4 Exhibit A-3, #5 Exhibit B)(Finkel, Robert)
EXHIBIT A-1
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
PASHA S. ANWAR, et al.,
Plaintiffs,
v.
FAIRFIELD GREENWICH LIMITED, et al.,
Master File No. 09-cv-118 (VM)
Defendants.
NOTICE OF PROPOSED PARTIAL SETTLEMENT OF CLASS ACTION AND
SETTLEMENT FAIRNESS HEARING, AND MOTION FOR ATTORNEYS’
FEES AND REIMBURSMENT OF EXPENSES
Your legal rights may be affected – Please read this Notice carefully.
To: All beneficial owners of shares or limited partnership interests in Fairfield Sentry
Limited (“Sentry”), Fairfield Sigma Limited (“Sigma”), Fairfield Lambda Limited
(“Lambda”), Greenwich Sentry, L.P. (“Greenwich Sentry”) and Greenwich Sentry
Partners, L.P. (“Greenwich Sentry Partners”) (collectively, the “Funds”) as of December
10, 2008 (whether as holders of record or traceable to a shareholder or limited partner
account of record) (“Beneficial Owners”), who suffered a Net Loss of principal invested
in the Funds (collectively, the “Settlement Class”).
If you meet the above definition of the Settlement Class, you could get a payment from a
class action settlement.
A federal court authorized this Notice. This is not a solicitation from a lawyer.
The purpose of this Notice is to inform you of a proposed partial settlement of this class
action (the “Action”) as against the Citco Defendants (defined below) for a cash payment
of $125,000,000 (the “Settlement Fund”) and the scheduling of a settlement fairness
hearing with respect to the proposed partial settlement and the motion of the
Representative Plaintiffs and Plaintiffs’ Counsel (collectively “Plaintiffs”) for an award
of attorneys’ fees and reimbursement of expenses. Documents related to the proposed
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settlement are available on the Settlement website established by the Notice and Claims
Administrator (the “Claims Administrator”) at www.fairfieldgreenwichlitigation.com.
This Notice describes important rights you may have and what steps you must take if you
wish to participate in the Settlement or wish to be excluded from the Settlement Class.
Deadlines
YOUR LEGAL RIGHTS AND OPTIONS IN THIS SETTLEMENT:
SUBMIT A CLAIM
FORM
Deadline: ______ ([120 days from mailed notice]). This
is the only way to receive a payment from the Settlement
Fund.
EXCLUDE YOURSELF
FROM THE
SETTLEMENT CLASS
Deadline: _____ ([35 days before the Settlement
Hearing]). Receive no payment from the Settlement. If
the Court approves the Settlement, this is the only option
that allows you ever to participate in any other lawsuit
against the Citco Defendants and other Released Parties
(defined below) which involves the Released Claims
(defined below).
OBJECT
Deadline: _____ ([35 days before the Settlement
Hearing]). You may write to the Court if you do not like
this Settlement or the request for an award of attorneys’
fees and reimbursement of expenses. You may not object
if you have excluded yourself from the Settlement.
GO TO THE
SETTLEMENT
HEARING
Settlement Hearing Date: ______ Whether or not you
object to the Settlement, you may ask to speak in Court
about the fairness of the Settlement. The Deadline to ask
to speak in Court about the Settlement is ____ ([35 days
before the Settlement Hearing]).
Plaintiffs must file their motion papers for Final Approval
of the Settlement and for Approval of Attorneys’ Fees
and Expenses on or before ______ ([50 days before the
Settlement Hearing]).
DO NOTHING
Receive no payment if you do not submit a claim form.
These rights and options — and the deadlines to exercise them — are explained in this
Notice.
The Court presiding over this case must decide whether to approve the Settlement.
Payments will be made only if the Court approves the Settlement, and if there are any
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appeals, after appeals are resolved, and the Claims Administrator has had an opportunity
to process all claim forms. Please be patient.
Your legal rights are affected whether you act or do not act. Please read this Notice
carefully.
SPECIAL NOTICE TO NOMINEES OR CUSTODIANS
Pursuant to an Order of the District Court dated November 30, 2012, and a Notice of
Proposed Partial Settlement dated December 17, 2012, the District Court requested that
Persons who held any shares or limited partnership interests as nominee, custodian or
other holder for a Beneficial Owner (“Nominee”) assist in providing notice of the FG
Settlement (defined below) to Beneficial Owners of the Funds as of December 10, 2008.
A copy of that Order and Notice are on the Claim Administrator’s website. If you are a
Nominee and provided the December 17, 2012 Notice and related Proof of Claim and
Release form ( the “2012 Proof of Claim”) directly to Beneficial Owners and did not
provide the Claim Administrator with a list of the names and addresses of the Persons to
whom the Notice and 2012 Proof of Claim were delivered, you must within ten (10) days
after you receive this Notice, at your option, either (i) send this Notice and Proof of
Claim and Release (“Proof of Claim”) to the Beneficial Owner, or (ii) request the Claims
Administrator to send you additional copies of this Notice and the Proof of Claim
sufficient to deliver to all Beneficial Owners, and within ten (10) days after receipt
thereof make such delivery to all Beneficial Owners, or (iii) provide a list of the names
and addresses or email addresses of all Beneficial Owners to the Claims Administrator,
who will send those Persons a copy of this Notice and the Proof of Claim by first class
mail or email. Nominees who elect to themselves deliver the Notice and Proof of Claim
to their Beneficial Owners shall send a statement to the Claims Administrator confirming
that the delivery was made as directed, and subject to any confidentiality agreement,
statute or regulation that may limit their ability to do so, shall provide the Claims
Administrator with a list of the names and addresses of the Persons to whom the Notice
and Proof of Claim were delivered.
If you choose to deliver the Notice and Proof of Claim yourself, you may obtain from the
Claims Administrator (without cost to you) as many additional copies of these documents
as you will need to complete the delivery, by submitting a request to:
Fairfield Greenwich Securities Litigation
c/o Rust Consulting, Inc.
P.O. Box 2874
Faribault, MN 55021-8674
(by regular or express mail)
Fairfield Greenwich Securities Litigation
c/o Rust Consulting
201 Lyndale Ave. S.
Faribault, MN 55021
(by express delivery service)
Regardless of whether you choose to complete the delivery yourself or elect to have the
delivery performed for you, you may obtain reimbursement for reasonable administrative
costs actually incurred in connection with forwarding the Notice and Proof of Claim and
which would not have been incurred but for the obligation to forward the Notice and
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Proof of Claim, upon submission of appropriate documentation to the Claims
Administrator. The Claims Administrator has also maintained on its website pdf versions
of this Notice and the Proof of Claim. Delivery to Beneficial Owners may be effected
through electronic means.
SUMMARY OF NOTICE
Summary of the Proposed Partial Settlement
The Representative Plaintiffs and the Citco Defendants have entered into a
proposed partial settlement releasing all claims that were asserted or could
have been asserted by the Representative Plaintiffs in the Action, individually
and on behalf of the Settlement Class, against the Citco Defendants and other
Released Parties.
According to Plaintiffs’ allegations in this Action, the Citco Defendants
comprised the administrator and custodian of the Funds and the Funds’ assets.
Plaintiffs alleged in their Second Consolidated Amended Complaint
(“SCAC”) filed with the Court on September 29, 2009, that the Citco
Defendants made misrepresentations to investors in connection with sales of
interests in the Funds and in acting as administrators and custodians for the
Funds and breached fiduciary duties and contracts relating to investments in
the Funds. The District Court, in Orders dated July 29, 2010 and August 18,
2010 (728 F. Supp. 2d 354 and 728 F. Supp. 2d 372) sustained in part the
claims asserted against the Citco Defendants in the Action. On August 6,
2012, the Court granted the Citco Defendants’ (and other Defendants’)
renewed motion to dismiss all negligence-based claims asserted against them
on behalf of initial investors in the Funds. 2012 WL 345478. Subsequently,
Plaintiffs amended the SCAC to add allegations against the Citco Defendants,
and on the basis of those amendments, the Court, on May 13, 2014, reinstated
Plaintiffs’ negligence-based claims related to initial investments asserted
against the Citco Defendants. Dkt. No. 1267. Copies of those opinions are
available on the Claims Administrator’s website.
Under the terms of the proposed partial Settlement, the aggregate amount of
$125,000,000 (one hundred twenty-five million dollars) will be paid into the
Settlement Fund. These funds (less Court-approved attorneys’ fees and
reimbursement of expenses) shall be paid to the Settlement Class pursuant to
the Plan of Allocation.
As further additional settlement consideration, subject to the conditions set
forth in the Stipulation, the Citco Defendants have agreed to waive all rights
to seek recovery on claims for contribution or indemnity that they hold or may
hold against the Fund, the FG Defendants, GlobeOp, the PwC Defendants, or
any party indemnified by the Funds for any expenses incurred or amounts paid
in connection with the Action. Nothing in this provision precludes the Citco
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Defendants from arguing that the Settlement proceeds in this case are an offset
against claims that may be made against them in other proceedings.
This is a partial settlement only. Plaintiffs will continue to prosecute pending
claims against the PwC Defendants (PricewaterhouseCoopers LLP [Canada]
and PricewaterhouseCoopers Accountants Netherlands N.V). The PwC
Defendants were auditors of the Funds. In the July 29, 2010 and August 18,
2010 Orders, the District Court sustained certain claims against the PwC
Defendants. The District Court subsequently denied in part two separate
motions to reargue the August 18, 2010 Order (800 F. Supp. 2d 571 and 2012
WL 345478). However, the Court, on the second motion to reargue, limited
the claims against the PwC Defendants to subsequent investor and holder
claims asserted by already existing investors in the Funds. Copies of these
decisions are available on the Claims Administrator’s website.
On March 25, 2013, the Court entered an Order approving the settlement of
Plaintiffs’ claims against the FG Defendants (the “FG Settlement”) for
$80,250,000 ($30,000,000 of which continues to be held in escrow). That
Order was affirmed on appeal. On November 22, 2013, the Court entered an
Order approving the settlement of Plaintiffs’ claims against GlobeOp
Financial Services LLC (the “GlobeOp Settlement”) for $5,000,000. Proceeds
from the FG Settlement and the GlobeOp Settlement have been distributed to
eligible claimants.
The Settlement provides for a court order barring the PwC Defendants and
other similarly situated Persons from asserting claims for contribution,
indemnification or other similar claims against the Released Parties. To
compensate such Persons for the release of these claims against the Released
Parties, any judgment that may be obtained by a Settlement Class Member
against such Persons shall be reduced, to the extent permitted by applicable
law, by the greater of (i) the amount that corresponds to the percentage of
responsibility attributed to the Released Parties; and (ii) the gross monetary
consideration provided to such Representative Plaintiff or other Settlement
Class Member or Members pursuant to this Settlement.
In addition to amounts that they have received under the FG Settlement and
the GlobeOp Settlement and would receive under the Citco Settlement,
Settlement Class Members also are likely to receive additional cash
distributions from liquidation or bankruptcy proceedings involving the Funds
(including based on distributions from the BLMIS Trustee). Liquidation
proceedings involving Sentry, Sigma, and Lambda are pending in the British
Virgin Islands (Claim No. 0074/2009 (Lambda), Claim No. 0136/2009
(Sentry), Claim No. 0139/2009 (Sigma)). Bankruptcy proceedings involving
Greenwich Sentry and Greenwich Sentry Partners are pending in the U.S.
Bankruptcy Court for the Southern District of New York (Case No. 10-16229
(BRL)). In addition, Settlement Class Members who filed proofs of claim
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should be entitled to additional distributions from the Madoff Victim Fund
administered by Special Master Richard C. Breeden.
Further, the FG Defendants have pledged security interests up to an additional
$30,000,000 to a separate Escrow Fund. To the extent funds remain in the
Escrow Fund following the final resolution or disposition (including appeals)
of certain other claims commenced against the FG Defendants by June 15,
2016, the balance in the Escrow Fund less any additional attorneys’ fee award
permitted by the Court shall be paid to the Settlement Class pursuant to the
Plan of Allocation for the FG Settlement.
Statement of Settlement Class Members’ Recovery
In connection with the FG Settlement, some 2,960 Settlement Class Members
filed Claim Forms comprising $3,265,638,105 of Net Losses. As stated herein,
Settlement Class Members may elect to utilize the same Claim Form to participate in this
Citco Settlement, as long as they sign the Release. Assuming that Settlement Class
members with Net Losses of $3,265,638,105 file claims in this settlement, the proration,
prior to payment of attorneys’ fees or expenses, would be approximately 3.8%.
Any amounts received by Settlement Class Members from continued proceedings
against the PwC Defendants, from the FG Settlement Escrow Fund, and from the
liquidation and bankruptcy proceedings concerning the Funds, as well as distributions
from the Madoff Victim Fund, would be in addition to the foregoing amounts from the
Citco Settlement.
Membership in the Settlement Class
The Settlement Class consists of Beneficial Owners of shares or limited
partnership interests in the Funds as of December 10, 2008 (whether as holders of record
or traceable to a shareholder or limited partner account of record), who suffered a Net
Loss of principal invested in the Funds. Plaintiffs’ Lead Counsel, with the assistance of
the Claims Administrator, will in the first instance determine, and make
recommendations to the Court, as to the identity of investors who file claim forms who
are appropriately Settlement Class Members. Determinations as to membership in the
Settlement Class will be reviewable by the Court.
Statement of Potential Outcome of Settled Claims
The Settlement must be compared to the risk of no recovery on the relevant
claims after contested dispositive motions, trial and likely appeals. The claims being
settled involve numerous complex legal and factual issues, many of which would require
expert testimony. Among the many key issues about which Plaintiffs and the Citco
Defendants do not agree are: (1) whether any of the Citco Defendants violated state or
federal law or otherwise engaged in any wrongdoing; (2) whether any of the Citco
Defendants acted negligently, recklessly, or with intent to defraud; (3) whether the
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misrepresentations and omissions alleged by Plaintiffs were material, false, misleading or
otherwise actionable; (4) the extent to which Plaintiffs relied on the Citco Defendants’
alleged misrepresentations and omissions; (5) whether any of the Citco Defendants owed
Plaintiffs a fiduciary duty; (6) whether Plaintiffs’ state law claims are preempted by the
Securities Litigation Uniform Standards Act of 1998; (7) whether Plaintiffs have standing
to pursue their state law claims, including whether Plaintiffs are third-party beneficiaries
of contracts between the Citco Defendants and the Funds; (8) whether a litigation class
can be certified (as opposed to a settlement class); (9) where the relevant transactions
occurred and whether the Plaintiffs’ federal securities law claims are barred by United
States Supreme Court authority with respect to extraterritorial jurisdiction over foreign
claims; and (10) the method for determining whether, and the extent to which, investors
suffered injury and damages that could be recovered at trial. In addition, even if
Plaintiffs were to obtain a judgment against the Citco Defendants that is affirmed on
appeal, complex legal and factual issues may be presented by Plaintiffs’ efforts to collect
such a judgment from the Citco Defendants.
Reasons for Settlement
Plaintiffs entered into the proposed partial settlement after over six years of
litigation, when they were fully familiar with the facts and circumstances of the Action.
Plaintiffs’ Counsel reviewed more than nine million pages of documents produced by the
Citco Defendants and other Defendants; and reviewed and produced to counsel for the
defendants more than 75,000 pages of documents on behalf of the Representative
Plaintiffs and certain other Named Plaintiffs. Plaintiffs’ Lead Counsel have conducted
approximately 30 merits depositions of the Citco Defendants and approximately 48
merits depositions of former and current employees of the other Defendants in locations
including New York, Miami, Toronto, Bermuda and Amsterdam, and 13 depositions of
experts designated by the Citco and PwC Defendants. Twenty individuals associated
with the Representative Plaintiffs and other Named Plaintiffs (including each of the
Representative Plaintiffs and other plaintiffs named in the SCAC), were deposed in
Arizona, Cleveland, and New York, some of whom traveled from international residences
including Israel, Bahrain, and Belgium. In addition, all eight of plaintiffs’ liability and
damages experts were deposed by the Citco and PwC Defendants.
Further information concerning Plaintiffs’ litigation efforts is contained in the
Stipulation of Settlement dated August 12, 2015, available on the Claim Administrator’s
website.
Beginning in August 2013, at the suggestion of the Court and with the assistance
of retired U.S. District Judge Layn Phillips, a highly experienced mediator, Plaintiffs and
the Citco Defendants engaged in extensive, arm’s-length negotiations, including three
separate full-day meetings conducted over a two year period. In this process, Judge
Phillips made a mediator’s proposal that was ultimately accepted by the parties.
All seven Representative Plaintiffs and all of Plaintiffs’ Lead Counsel, who have
extensive experience in securities and complex shareholder class-action litigation, believe
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that the Settlement provides the Settlement Class with significant and certain benefits
now and eliminates the risk of no recovery following what would be years of further
uncertain litigation, including final disposition of the class certification motion on the
claims against the Citco Defendants, motions for summary judgment, and if summary
judgment is not granted to Citco, a contested trial and likely appeals on the claims against
the Citco Defendants, with the possibility of no recovery at all. In this connection, the
Citco Defendants vigorously maintain that they did not know about wrongdoing at
BLMIS until it was revealed to the public in December 2008, were entitled under written
contracts and industry practice to rely on the accuracy of information provided by
BLMIS in the absence of manifest error, relied on the activities of the FG Defendants in
conducting due diligence of BLMIS, the PwC Defendants in auditing the Funds’ financial
statements, and the SEC in regulating BLMIS as an investment advisor, and were among
many financial firms and regulators that were fooled by Madoff’s complex and longlasting Ponzi scheme. They also point to the efforts to conceal the fraud by Madoff and
others who have pleaded guilty or been convicted of crimes, including creating false trade
blotters, trade confirmations and account statements and DTC reports and aspects of
Madoff’s activities that were not typical of a Ponzi scheme, including refusing new
investments and redeeming tens of billions of dollars to investors upon request over many
years.
Plaintiffs, in proposing that the Court approve the $125,000,000 partial settlement
as fair, reasonable and adequate to the Settlement Class, have considered, among other
factors, Plaintiffs’ ability to prevail on the contested factual and legal issues summarized
in the Statement of Potential Outcome of Settled Claims above. There is a significant
risk that Plaintiffs’ claims could be dismissed or limited prior to or at trial, or on appeal
from a jury verdict. In addition, Plaintiffs’ Lead Counsel considered that, by reducing the
number of defendants and defense counsel in the litigation, and the factual and legal
issues in dispute, the Settlement may have a beneficial effect on Plaintiffs’ ability to
successfully litigate the remaining claims against the PwC Defendants, which may
through settlement or judgment provide significant additional compensation to the
Settlement Class.
Plaintiffs’ Lead Counsel also considered the likely difficulty of obtaining a
significantly larger recovery from the Citco Defendants in light of their continued
payment of large legal fees and expenses, and the substantial potential difficulties in
collecting on a judgment. Among other things, the Citco Defendants, as part of the
settlement process, provided Plaintiffs’ Lead Counsel with certain financial information.
Plaintiffs’ Lead Counsel further considered that even if a jury verdict were obtained
against the Citco Defendants and upheld on appeal, collection of such a judgment could
be complex and uncertain due to the need to enforce it in multiple foreign jurisdictions,
the possible intervention of foreign banking regulators; and the risk that the Citco
Defendants would be forced into bankruptcy, all of which could take years and result in
collection of significantly less than the verdict amount. Plaintiffs’ Lead Counsel
determined, based on these matters and their assessment of other legal and factual risks of
continuing the Action against the Citco Defendants and proving their claims at trial, some
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of which are discussed above, that the proposed settlement is in the best interests of the
Settlement Class.
Plaintiffs will file with the Court on or before ____ [50 days prior to the
Settlement Hearing] a formal motion for approval of the proposed Settlement further
discussing the reasons justifying the settlement.
The Citco Defendants have denied and continue to deny each and all of the claims
and contentions alleged in the SCAC and believe that they have meritorious defenses to
those claims and contentions. The Settlement shall in no event be construed as, or
deemed to be evidence of, an admission or concession by any of the Citco Defendants or
Released Parties with respect to any claim of any fault or liability or wrongdoing or
damage to the Representative Plaintiffs, the Settlement Class Members, or any Person.
Statement of Attorneys’ Fees and Expenses
Plaintiffs’ Lead Counsel will ask the Court to approve payment from the
Settlement Fund of attorneys’ fees of up to 30% of the Settlement Fund and for
reimbursement of expenses that were advanced by Plaintiffs’ Counsel through July 20,
2015 in connection with the litigation directly related to their representation of the
Settlement Class not to exceed $5,500,000.
If the above amounts are requested and approved by the Court, based upon current
information, fees and expenses are estimated at approximately 34.4% of the Settlement
Fund.
Dismissal and Releases
If the proposed Settlement is approved, the Court will enter a Final Judgment and Order
of Dismissal with Prejudice (the “Final Judgment”). The Final Judgment will dismiss
with prejudice the claims asserted in the Action against the Citco Defendants. The Final
Judgment will also provide that all Settlement Class Members shall be deemed to have
released and forever discharged all Released Claims against all Released Parties. The
specific terms of the releases, including the meaning of the term “Released Claims,” are
set forth in the Stipulation. This release does not include any claims asserted or which
may be asserted by the Funds, or the pending (though dismissed) derivative litigation
brought in connection with the Funds; provided, however, that to the extent that any such
claims have been or may be asserted, the Released Parties shall not be prevented from
asserting any defenses or raising any argument as to liability or damages with respect to
such claims or, with the exception of the claims for indemnity or contribution in
connection with the Action, prevent the Released Parties from asserting any rights,
remedies or claims against the Funds or in the pending (though dismissed) derivative
litigation.
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Unless you exclude yourself from the Settlement Class, you will be releasing
claims you may have against the Released Parties. However, you will not be required to
give up any claims you may have against any other individuals or entities (including the
PwC Defendants) relating to your losses in the Funds.
WHAT THIS NOTICE CONTAINS
BASIC INFORMATION………………………………………………
1.
Why did I receive this notice package?
2.
What is this lawsuit about?
3.
Why is this a class action?
4.
Why is there a partial settlement?
WHO IS IN THE SETTLEMENT………………………………………………
5.
How do I know if I am part of the settlement?
6.
What are the exceptions to being included?
7.
I’m still not sure if I’m included.
THE SETTLEMENT BENEFITS – WHAT YOU
GET…………………………………………
8.
What does the settlement provide?
9.
How much will my payment be?
HOW YOU GET A PAYMENT – SUBMITTING A CLAIM
FORM……………………………
10.
How can I obtain a payment?
11.
When will I receive my payment?
12.
What am I giving up to receive a payment?
13.
If I stay in the Settlement Class may I still recover additional amounts
from other sources?
THE LAWYERS REPRESENTING YOU………………………………………………
14.
Do I have a lawyer in the case?
15.
How will the lawyers be paid?
EXCLUDING YOURSELF FROM THE SETTLEMENT
16.
How do I exclude myself from the Settlement?
17.
If I do not exclude myself from the Settlement, can I sue the Released
Parties for the same thing later?
18.
If I exclude myself, can I get money from this Settlement?
OBJECTING TO THE SETTLEMENT………………………………………………
19.
How do I tell the Court that I do not like the Settlement?
20.
What is the difference between objecting and requesting exclusion?
THE COURT’S SETTLEMENT HEARING………………………………………………
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21.
22.
23.
When and where will the Court decide whether to approve the settlement?
Do I have to come to the Hearing?
May I speak at the Hearing?
IF YOU DO NOTHING………………………………………………
24.
What happens if I do nothing at all?
GETTING MORE INFORMATION………………………………………………
25.
Are there more details about the settlement?
THE PLAN OF ALLOCATION………………………………………………
BASIC INFORMATION
1.
Why Did I Receive This Notice Package?
You or someone in your family may have purchased or acquired an investment in
Fairfield Sentry Limited, Fairfield Sigma Limited, Fairfield Lambda Limited, Greenwich
Sentry, L.P. or Greenwich Sentry Partners, L.P. (the “Funds”).
This Notice was sent because you have a right to know about a proposed partial
settlement of a class action lawsuit concerning the Funds, and about all of your options,
before the Court decides whether to approve the partial Settlement. If the Court approves
the partial Settlement and after any objections or appeals are resolved, the Claims
Administrator appointed by the Court will recommend that payments be made to those
Settlement Class Members who timely submit valid claims in the manner described
below. Persons who are not Settlement Class Members may have received this Notice.
If you seek to obtain a distribution from the Settlement Fund (or the Escrow Fund) in this
Action, it is your responsibility to demonstrate that you are a member of the Settlement
Class.
This Notice explains the lawsuit, the Settlement, your legal rights, what benefits
are available, who is eligible for them, and how to get them.
The Court in charge of the case is the United States District Court for the
Southern District of New York, and the case is known as Anwar, et al. v. Fairfield
Greenwich Limited, et al., Civil Action No. 09 Civ, 118.
Certain of the entities and individuals who brought this action -- Pacific West
Health Medical Center Employees Retirement Trust, Harel Insurance Company Ltd.,
Martin and Shirley Bach Family Trust, Natalia Hatgis, Securities & Investment Company
Bahrain, Dawson Bypass Trust, and St. Stephen’s School -- are called Representative
Plaintiffs.
The defendants settling this action are Citco Fund Services (Europe) B.V., Citco
(Canada) Inc., Citco Bank Nederland N.V. Dublin Branch, Citco Global Custody N.V.,
Citco Fund Services (Bermuda Limited), The Citco Group Limited, Brian Francoeur, and
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Ian Pilgrim (the “Citco Defendants”). All claims against the Citco Defendants will be
released if the Settlement is approved. The District Court has previously approved partial
settlements with the FG Defendants for $80 million ($30 million of which continues to be
held in escrow) and GlobeOp Financial Advisors, LLC (for $5 million). Funds from
these settlements have been distributed to investors. Documents concerning these
settlements are on the Claim Administrator’s website.
Whether or not the Settlement is approved, Plaintiffs’ Counsel will continue to
prosecute the Action against the PwC Defendants, consisting of PricewaterhouseCoopers
LLP Canada and PricewaterhouseCoopers Accountants Netherlands N.V.
The Settling Parties are the Representative Plaintiffs and the Citco Defendants.
2.
What Is This Lawsuit About?
This lawsuit alleges that the Citco Defendants engaged in deceptive conduct,
made materially false and misleading statements and omissions, and breached their duties
and contractual obligations with respect to the administration and custody of shares in,
and assets of the Funds. The Citco Defendants deny the allegations.
3.
Why Is This a Class Action?
In a class action, one or more people or entities called class representatives (in
this case the Representative Plaintiffs) sue on behalf of people who have similar claims.
Here, all these people are called a class or class members, and those included in this
Settlement are called a Settlement Class or Settlement Class Members. One court
resolves the issues for all class members, except for those who timely and validly
excluded themselves from the class. United States District Judge Victor Marrero is in
charge of this class action.
4.
Why Is There a Partial Settlement?
The Court did not decide in favor of the Plaintiffs or the Citco Defendants.
Instead, the Settling Parties agreed to a settlement. This permits them to avoid the cost
and uncertainty of a trial, and permits eligible Settlement Class Members who submit
valid claims to receive compensation. The Representative Plaintiffs and their attorneys
believe the Settlement is in the best interests of all Settlement Class Members. The Citco
Defendants have concluded that further defense of the Action would be protracted and
expensive, and also have taken into account the uncertainty, risks and distractions
inherent in any litigation, especially in a complex case such as the Action. The
Settlement is “partial” because there is no settlement with the PwC Defendants, and
Plaintiffs’ Counsel will continue to prosecute the Action against them.
WHO IS IN THE SETTLEMENT
To see if you will receive money from this Settlement, you first have to determine
if you are a Settlement Class Member.
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5.
How Do I Know if I Am Part of the Settlement?
For purposes of the Settlement, the Court has provisionally approved the
following definition of the Settlement Class:
All Persons who were Beneficial Owners of shares or limited
partnership interests in the Funds as of December 10, 2008
(whether as holders of record or traceable to a shareholder or
limited partner account of record), and who suffered a Net Loss of
principal invested in the Funds.
6.
What Are the Exceptions to Being Included?
The Settlement Class excludes (i) those Persons who timely and validly request
exclusion from the Settlement Class; (ii) Fairfield Sigma Limited, (iii) Fairfield Lambda
Limited, (iv) any Person who has been dismissed from this Action with prejudice or is
barred by prior judgment or settlement from asserting the claims against the Citco
Defendants set forth in the SCAC; and (v) the Defendants (including the Citco
Defendants, the FG Defendants, GlobeOp, and the PwC Defendants) and any entity in
which the Defendants have a controlling interest, and the officers, directors, affiliates,
legal representatives, attorneys, immediate family members (as defined in 17 C.F.R.
240.16a-1(e)), heirs, successors, subsidiaries and/or assigns of any such individual or
entity in their capacity as such. Fairfield Sigma Limited and Sentry Lambda Limited
were both investors in Fairfield Sentry Limited and are excluded from the definition of
the Settlement Class because investors in those Funds are already included in the
Settlement Class to the extent such investors sustained a Net Loss.
7.
I’m Still Not Sure if I Am Included.
If you are still not sure whether you are included, you can ask for free help.
Settlement Class Members were required to submit claim forms in connection with the
FG Settlement and GlobeOp Settlement. The Settlement classes in those settlements
were defined in the same manner as the Settlement Class here, with the exception that the
GlobeOp settlement class only included investors in the domestic funds (Greenwich
Sentry, L.P., and Greenwich Sentry Partners, L.P.). If you completed a claim form in one
or both of those settlements and received a distribution of those settlement funds, you are
a member of the Citco Settlement Class and are entitled to share in the recovery from the
Citco Settlement.
You can also request additional information from the persons identified in
Question 25 below. Or you can fill out and return the claim form described in question
10, to see if you qualify.
13
THE SETTLEMENT BENEFITS — WHAT YOU GET
8.
What Does the Settlement Provide?
The Citco Defendants have agreed to pay $125,000,000 in cash into the
Settlement Fund. The Settlement Fund, after payment of Court-approved attorneys’ fees
and expenses and the costs of claims administration, including the costs of printing and
mailing this Notice and the cost of publishing notice (the “Net Settlement Fund”), will be
divided among all eligible Settlement Class Members who send in valid claim forms
pursuant to the Plan of Allocation described below.
9.
How Much Will My Payment Be?
Your share of the Net Settlement Fund will depend on the size of your Net Loss
of principal in the Funds compared to the aggregate Net Loss of principal of all
Settlement Class Members who submit valid claim forms.
You can calculate your Net Loss in accordance with the explanation below in the
Plan of Allocation. After the deadline for submitting a Proof of Claim, the payment you
receive will reflect your Net Loss in relation to the total Net Loss of all Settlement Class
Members who submit valid Proofs of Claim. The Net Loss is not the amount of the
payment that you can expect, but is used to determine how the Net Settlement Fund will
be allocated among all Settlement Class Members who submit valid claims.
HOW YOU OBTAIN A PAYMENT — SUBMITTING A CLAIM FORM
10.
How Will I Obtain a Payment?
To qualify for payment, you must be an eligible Settlement Class Member, submit
a valid Proof of Claim, and properly document your claim as described in the Proof of
Claim. A Proof of Claim form is enclosed with this Notice. You may also get a Proof of
Claim form on the internet at www.FairfieldGreenwichLitigation.com. Read the
instructions carefully, fill out the Proof of Claim, include the documents the form asks
for, sign it, and submit it so that it is received by the Claims Administrator no later than
[
]. You are required to submit a Proof of Claim form in this Settlement
even if you submitted a prior claim form in the FG Settlement or GlobeOp Settlement,
although you are not required to submit documentation to support your claim if it was
previously submitted.
11.
When Will I Receive My Payment?
The Court will hold a hearing on November ___, 2015, to decide whether to
approve the Settlement. If Judge Marrero approves the Settlement, there may be appeals.
It is always uncertain how these appeals will be resolved, and resolving them can take
time, perhaps more than a year. After any approval by Judge Marrero and any appeals
are decided favorably, it will take several months for the Claims Administrator to process
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all of the Proof of Claim forms and to determine and pay the ultimate distribution
amounts.
12.
What Am I Giving Up to Receive a Payment?
Unless you timely exclude yourself from the Settlement Class by the
___________ deadline, you are a member of the Settlement Class and will be bound by
the release of claims against the Citco Defendants and the Released Parties. That means
that you cannot sue, continue to sue, or be part of any other lawsuit against the Citco
Defendants or the Released Parties about the Released Claims. The specific terms of the
release are included in the Stipulation.
13.
If I Stay in the Settlement Class, May I Still Recover Additional
Amounts from Other Sources?
Yes. If you participate in this class Settlement, then you will not be required to
give up any claims you may have against any individuals or entities other than the
Released Parties. Investors in the Funds may recover on claims against the PwC
Defendants, against whom Plaintiffs’ Counsel are continuing to pursue in this litigation.
The Court has limited the claims against the PwC Defendants to subsequent investor and
holder claims asserted by already existing investors in the Funds. Investors in the Funds
also are likely to receive distributions from the liquidation or bankruptcy proceedings
overseen by the respective liquidators or trustees of the Funds, and from the Madoff
Victim Fund.
THE LAWYERS REPRESENTING YOU
14.
Do I Have a Lawyer in This Case?
The law firms of Boies, Schiller & Flexner LLP, Wolf Popper LLP, and Lovell
Stewart Halebian Jacobson LLP brought the Action on behalf of Representative Plaintiffs
and they represent you and all other Settlement Class Members. These lawyers are called
Plaintiffs’ Lead Counsel. You will not be charged for these lawyers. If you want to be
represented by your own lawyer, you may hire one at your own expense.
15.
How Will the Lawyers Be Paid?
Plaintiffs’ Counsel will ask the Court for attorneys’ fees up to 30% of the
$125,000,000 Settlement Fund, and for expenses that were advanced through July 20,
2015 by Plaintiffs’ Counsel in connection with the litigation, not to exceed $5,500,000.
These expenses that were advanced by Lead Counsel are in addition the costs previously
awarded by the Court with respect to the FG and GlobeOp settlements. Such sums as
may be approved by the Court will be paid from the Settlement Fund. Plaintiffs’ Counsel
may seek additional attorneys’ fees at a later date based on any other recoveries.
Settlement Class Members are not personally liable for any such fees or expenses.
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The attorneys’ fees and expenses requested represent payment to Plaintiffs’ Lead
Counsel and other such counsel involved in the Action on behalf of the Plaintiffs
(collectively “Plaintiffs’ Counsel”) for their efforts in achieving this Settlement and for
their risk in undertaking this representation on a wholly contingent basis. Since the case
began in 2008, Plaintiffs’ Counsel has undertaken extensive work necessary to prepare
the case for trial. Plaintiffs’ Counsel has conducted all of the investigation, drafted the
SCAC, reviewed millions of documents, taken and defended dozens of depositions,
employed experts, performed an enormous amount of legal research and filed many legal
briefs on novel and complex issues, including opposing dismissal of the claims,
supporting class certification and arguing discovery issues. Plaintiffs’ Counsel have
expended through July 20, 2015 in excess of 107,000] hours of attorney and paralegal
time. Plaintiffs’ counsel were previously awarded fees of $12,562,500 and $1,250,000
and expenses of $1,279,242 and $19,825 in connection with the FG and GlobeOp
Settlements, respectively. A 30% fee award, combined with the fees previously awarded
by the Court, would amount to less than 70% of Plaintiffs’ Counsel’s combined lodestar
through July 20, 2015 at current rates.
Plaintiffs’ Lead Counsel shall file a motion with the Court for approval of the
Settlement, the Plan of Allocation, and the request for attorneys’ fees and reimbursement
of expenses by [50 days prior to the Settlement Hearing. Copies of that motion will be
posted on the Claim Administrator’s website. The Citco Defendants take no position
with respect to the request for attorneys’ fees and reimbursement of expenses. The Court
determines the amount counsel should receive from the Settlement Fund for fees and
expenses separately from its determination of whether the Settlement is fair, reasonable
and adequate, and may award less than the amount Plaintiffs’ Lead Counsel has
requested.
EXCLUDING YOURSELF FROM THE SETTLEMENT
16.
How Do I Exclude Myself From the Settlement?
If you want to retain the right to sue or to continue to sue the Released Parties on
your own about the claims being released in this Settlement, then you must take steps to
exclude yourself from the Settlement. This is referred to as opting out of the Settlement
Class, and persons who do so are referred to as “Opt-Outs”.
Excluding yourself is not the same as doing nothing in response to this Notice.
Each member of the Settlement Class shall be bound by all determinations and judgments
in the Action concerning the Settlement, whether favorable or unfavorable, unless such a
Person delivers to the Claims Administrator a written request for exclusion from the
Settlement Class, so that it is received by the Claims Administrator no later than
________ addressed to:
16
Fairfield Greenwich Securities Litigation
c/o Rust Consulting
201 Lyndale Ave. S.
Faribault, MN 55021
(by express delivery service)
Fairfield Greenwich Securities Litigation
c/o Rust Consulting, Inc.
P.O. Box 2874
Faribault, MN 55021-8674
(by regular or express mail)
No Person may exclude himself, herself or itself from the Settlement Class after
______, 2015. In order to be valid, each request for exclusion by a Person seeking to optout must state the name, address and telephone number of the Person seeking exclusion;
state that the Person “requests exclusion from the Settlement Class in Anwar, et al. v.
Fairfield Greenwich Limited, et al., Case No. 09-cv-118,” and state (i) the full name of
the Fund(s) purchased, (ii) the number and dollar amount of shares or limited partnership
interests purchased, and redeemed if applicable, (iii) the dates and amounts of each
purchase and any redemption transactions, any other recoveries received by the Person on
the Person’s investment in the Fund(s), and (iv) the number of shares or limited
partnership interests held by the Person in the Fund(s) as of December 10, 2008. Each
Person seeking to opt-out also must supply documentary proof of each purchase and
redemption transaction and of the Person’s membership in the Settlement Class. Any
such request for exclusion must be signed by the Person requesting exclusion.
Even if you opted-out of the FG Settlement or the GlobeOp Settlement, you need
to separately opt-out of this Citco Settlement.
Requests for exclusion shall not be effective unless the request includes the
required information and documentation and is made within the time period stated above,
or the exclusion is otherwise accepted by the Court. Only Beneficial Owners may file a
request for exclusion with respect to each share or limited partnership interest in the
Funds. Where the record owner of shares or limited partnership interests is a nominee,
custodian, or other Person acting in a materially similar fashion on behalf of one or more
Beneficial Owners, that nominee, custodian or other Person is not a Beneficial Owner
and may not file a request for exclusion on behalf of any such Beneficial Owners.
If you ask to be excluded, you will not receive any payment from this Settlement,
and you cannot object to the Settlement. You will not be legally bound by anything that
happens in the Action with respect to Released Claims and may be able to sue (or
continue to sue) the Released Parties in the future. Even if you ask to be excluded from
the Settlement Class, you will be entitled to participate in the continuing litigation against
the PwC Defendants. In the event a class is certified and notice mailed as to the claims
asserted against the PwC Defendants, you will be given a subsequent opportunity to
request exclusion from that class.
Any Settlement Class Member who submits a Request for Exclusion shall not
be deemed to have submitted to the jurisdiction of any Court in the United States for
any matter on account of such submission, and any Settlement Class Member who
submits a Proof of Claim thereby submits to the jurisdiction of this Court with respect
only to the subject matter of such Proof of Claim and all determinations made by this
17
Court thereon and shall not be deemed to have submitted to the jurisdiction of this
Court or of any court in the United States for any other matter on account of such
submission.
Except where a Settlement Class Member who submits a Request for Exclusion
commences or otherwise prosecutes or pursues a Released Claim against a Released
Party, all information submitted by a Settlement Class Member in a Request for
Exclusion or a Proof of Claim shall be treated as confidential protected information and
may not be disclosed by the Claims Administrator, its affiliates or the Settling Parties to
any third party absent a further order of this Court upon a showing of
necessity, and any such information that is submitted to the Court shall be filed under
seal.
If the aggregate Net Loss of Opt-Outs exceeds the threshold specified in a
separate “Supplemental Agreement” between the Settling Parties, then the Citco
Defendants shall have, in their sole and absolute discretion, the option to terminate this
Settlement and to render it null and void in accordance with the procedures set forth in
the Supplemental Agreement.
17.
If I Do Not Exclude Myself From the Settlement, Can I Sue the
Released Parties For the Same Thing Later?
No. Unless you exclude yourself, you give up any rights to bring a lawsuit or
claim in any forum asserting any of the Released Claims against the Released Parties. If
you have a pending lawsuit or claim in any forum that you believe concerns the Released
Claims or the same matters alleged in this Action, speak to your lawyer immediately.
You will likely have to exclude yourself from the Settlement Class if you wish to
continue your own lawsuit or claim. Remember, the exclusion deadline is _______.
18.
If I Exclude Myself, Can I Get Money From This Settlement?
No. You will however, retain any right you may have to bring a lawsuit, to
continue to pursue an existing lawsuit, or to be part of a different lawsuit asserting a
Released Claim against a Released Party.
OBJECTING TO THE SETTLEMENT
19.
How do I Tell the Court that I Do Not Like the Settlement or the
Request for Attorneys’ Fees and Reimbursement of Expenses?
If you are a Settlement Class Member, you can object to the Settlement if you do
not like any part of it, including the Plan of Allocation and the request for attorneys’ fees
or expenses. You can state the reasons why you think the Court should not approve it,
and the Court will consider your views. To object, you must submit a letter saying that
you object to the Settlement in Anwar, et al. v. Fairfield Greenwich Limited, et al., Case
No. 09-cv-118. Be sure to include your name, address, telephone number, your
18
signature, the full name of the Fund(s) purchased, the dates and number and dollar
amounts of shares or limited partnership interests purchased, and redeemed if applicable,
and other recoveries you have received on your investment in the Fund(s), and to supply
documentary proof of the purchase or any redemption transactions and of your
membership in the Settlement Class, and the reasons you object. Any objection letter
must be delivered such that it is received by each of the following no later than
___________, 2015:
Court:
Clerk of the Court
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
United States Courthouse
500 Pearl Street
New York, NY 10007-1312
Plaintiffs’ Counsel Designee:
Citco Defendants’ Counsel
Designee:
Andrew G. Gordon, Esq.
Paul, Weiss, Rifkind, Wharton &
Garrison LLP
1285 Avenue of the Americas
New York, NY 10019
Robert C. Finkel, Esq.
Wolf Popper LLP
845 Third Avenue
New York, NY 10022
20.
What is the Difference between Objecting and Requesting Exclusion?
Objecting is simply telling the Court that you do not like something about the
proposed Settlement. Objecting does not prevent you from participating and recovering
money in the Settlement. However, you can object only if you stay in the Settlement
Class. Excluding yourself is telling the Court that you do not want to be part of the
Settlement Class. If you exclude yourself, you have no basis to object because the
Settlement no longer affects you.
THE COURT’S SETTLEMENT HEARING
The Court will hold a hearing to decide whether to approve the Settlement. You
may attend and you may ask to speak, but you do not have to.
21.
When and Where Will the Court Decide Whether to Approve the
Settlement?
The Court will hold a Settlement Hearing at ______, on November ____, 2015 at
the Daniel Patrick Moynihan United States Courthouse, 500 Pearl Street, New York, NY
10007-1312, Courtroom 20B. At this hearing the Court will consider whether the
settlement is fair, reasonable and adequate. If there are objections, the Court will
consider them. The Court will also consider the application by Plaintiffs’ Lead Counsel
19
for fees and expenses and whether the Plan of Allocation is fair, reasonable and adequate.
The Court may decide these issues at the hearing or take them under consideration for a
later decision.
22.
Do I Have to Come to the Hearing?
No. Plaintiffs’ Lead Counsel will answer questions Judge Marrero may have.
But, you are welcome to come at your own expense. If you send an objection, you do not
have to come to Court to talk about it. As long as you submitted your written objection
on time, the Court will consider it. You may also pay your own lawyer to attend, but it is
not necessary.
23.
May I Speak at the Hearing?
You may ask the Court for permission to speak at the Settlement Hearing. To do
so, you must submit a letter saying that it is your intention to appear in Anwar, et al. v.
Fairfield Greenwich Limited, Case No. 09-cv-118. Be sure to include your name,
address, telephone number, your signature, the full name of the Fund(s) purchased, the
number and dollar amount of shares or limited partnership interests purchased, and
redeemed if applicable, to supply documentary proof of the purchase and any redemption
transactions and of your membership in the Settlement Class, and other recoveries you
have received on your investment in the Fund(s), and the reasons you want to speak at the
hearing. Your notice of intention to appear must be received no later than [35 days prior
to the Settlement Hearing], by the Clerk of the Court, Lead Counsel Designee and Citco
Defendants’ Counsel Designee, at the three addresses listed in question 19.
IF YOU DO NOTHING
24.
What Happens If I Do Nothing at All?
If you do nothing, all of your claims against the Released Parties will be released,
but you will not receive any money from this Settlement, because in order to receive
money it is necessary to submit a valid Proof of Claim.
GETTING MORE INFORMATION
25.
Are There More Details About the Settlement?
This Notice summarizes the proposed Settlement. More details are in the
Stipulation of Settlement dated as of [July 31, 2015]. You can obtain a copy of the
Stipulation of Settlement or more information about the Settlement by contacting the
Claims Administrator.
20
Fairfield Greenwich Securities
Litigation
c/o Rust Consulting, Inc.
P.O. Box 2874
Faribault, MN 55021-8674
(by regular or express mail) (by
express delivery service)
Fairfield Greenwich Securities
Litigation
c/o Rust Consulting
201 Lyndale Ave. S.
Faribault, MN 55021
or Plaintiffs’ Counsel:
David A. Barrett
Howard L. Vickery, II
BOIES, SCHILLER & FLEXNER LLP
575 Lexington Avenue
New York, NY 10022
[Need one Email address for contacting
counsel]
(212) 446-2300
Robert C. Finkel, Esq.
WOLF POPPER LLP
845 Third Avenue
New York, NY 10022
irrep@wolfpopper.com
1-877-370-7703
Stuart H. Singer
Carlos Sires
Sashi Bach Boruchow
Eli J. Glasser
BOIES, SCHILLER & FLEXNER LLP
401 East Las Olas Blvd., #1200
Ft. Lauderdale, Florida 33301
[email]
(954) 356-0011
Christopher Lovell
Victor E. Stewart
LOVELL STEWART HALEBIAN
JACOBSON LLP
61 Broadway, Suite 501
New York, NY 10006
[email]
(212) 608-1900
or by visiting www.fairfieldgreenwichlitigation.com
You can also obtain a copy from the Clerk’s office during regular business hours:
Clerk of the Court
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
Daniel Patrick Moynihan
United States Courthouse
500 Pearl Street
New York, NY 10007-1312
PLEASE DO NOT CONTACT THE COURT REGARDING THIS NOTICE
21
PLAN OF ALLOCATION OF NET SETTLEMENT FUND AMONG CLASS
MEMBERS
The Net Settlement Fund shall be distributed to Settlement Class Members who
submit a valid Proof of Claim (“Authorized Claimants”) according to the terms below.
The purpose of this Plan of Allocation of the Net Settlement Fund (“Plan of Allocation”
or “Plan”) is to establish a reasonable and equitable method of distributing the Net
Settlement Fund among Authorized Claimants. The Plan is not intended to replicate an
assessment of damages that could have been recovered had the Representative Plaintiffs
prevailed at trial.
Because the Net Settlement Fund is less than the total losses alleged to have been
suffered by Settlement Class Members, the formulas described below for calculating Net
Losses are not intended to estimate the amount that will actually be paid to Authorized
Claimants. Rather, these formulas provide the basis on which the Net Settlement Fund
will be distributed among Authorized Claimants.
Approval of the Settlement is independent from approval of the Plan of
Allocation. Any determination with respect to the Plan of Allocation will not affect the
Settlement, if approved. The Plan of Allocation set forth herein is the plan that is being
proposed by Representative Plaintiffs and Plaintiffs’ Lead Counsel to the Court for
approval. The Citco Defendants take no position with respect to the Plan of Allocation.
The Court may approve this plan as proposed or it may modify the Plan of Allocation
without further notice to the Settlement Class. Any orders regarding a modification of
the Plan of Allocation will be posted on the settlement website,
www.fairfieldgreenwichlitigation.com.
Payment pursuant to the Plan of Allocation approved by the Court shall be final
and conclusive against all Settlement Class Members. No person shall have any claim of
any kind against the Citco Defendants or their counsel with respect to the administration
of the settlement, including the Plan of Allocation. No person shall have any claim
against Representative Plaintiffs, Plaintiffs’ Counsel, or the Claims Administrator or
other agent designated by Plaintiffs’ Counsel arising from distributions made
substantially in accordance with the Stipulation, the Plan of Allocation, or further orders
of the Court. Representative Plaintiffs, the Citco Defendants, their respective counsel,
and all other Released Parties shall have no responsibility or liability whatsoever for the
investment or distribution of the Settlement Fund consistent with the terms of the
Stipulation, the Plan of Allocation, or the determination, administration, calculation, or
payment of any Proof of Claim or nonperformance of the Claims Administrator, the
payment or withholding of taxes owed by the Settlement Fund, or any losses incurred in
connection therewith.
Distributions will be made to Authorized Claimants after all claims have been
processed and after the Court has finally approved the Settlement (including the
resolution of any appeals) pursuant to the following terms:
22
a. The Net Loss for each Authorized Claimant will be the Net Loss of principal with
respect to each Fund. Net Loss means the total cash investment made by a Beneficial
Owner in a Fund, directly or indirectly through one or more intermediaries, less the total
amount of any redemptions or withdrawals or recoveries by that Beneficial Owner from
or with respect to the same Fund. A Settlement Class Member may have a Net Loss on
more than one Fund. Any transactions in foreign securities will be converted to a Net
Loss in U.S. dollars at the exchange rate in effect as of the date of the Final Hearing.
b. For the avoidance of doubt, where a fund, trust, or similar investment vehicle was
a registered shareholder or limited partner of record or otherwise invested in a Fund, the
fund, trust or similar investment vehicle is the Beneficial Owner for purposes of this
Stipulation, not the underlying investors in the fund or similar investment vehicle. Only
one Proof of Claim or request for exclusion can be submitted with respect to each share
or limited partnership interest in the Funds.
c. Only those Authorized Claimants who suffered a Net Loss of principal with
respect to a Fund are entitled to a payment from the Net Settlement Fund with respect to
that Fund.
d. Please note that the term “Net Loss” is used solely for calculating the amount of
participation by Authorized Claimants in the Net Settlement Fund. It is not the actual
amount an Authorized Claimant can expect to recover.
e. The Claims Administrator will determine each Authorized Claimant’s share of the
Net Settlement Fund. Each Authorized Claimant will receive a disbursement determined
by multiplying the Net Settlement Fund by a fraction, the numerator of which is the
Authorized Claimant’s Net Loss and the denominator of which is the sum total of all
Authorized Claimants’ Net Losses with respect to all of the Funds.
f. If there is any balance remaining in the Net Settlement Fund (whether by reason
of unclaimed funds, tax refunds, uncashed checks, or otherwise), at a date one hundred
eighty (180) days from the later of (a) the date on which the Court enters an order
directing the Net Settlement Fund to be distributed to Authorized Claimants, or (b) the
date the Settlement is final and becomes fully effective, then Plaintiffs’ Counsel shall,
upon approval of the Court, disburse such balance among Authorized Claimants as many
times as is necessary, in a manner consistent with this Plan of Allocation, until each
Authorized Claimant has received its Net Loss (but no greater than its Net Loss) as
defined in this Plan. If Plaintiffs’ Lead Counsel determines that it is not cost-effective to
conduct such further disbursement, or following such further disbursement any balance
still remains in the Net Settlement Fund, Plaintiffs’ Counsel shall, upon approval of the
Court, and without further notice to Settlement Class Members, cause the remaining
balance to be disbursed cy pres. Plaintiffs’ Lead Counsel shall also consider the potential
for additional distributions to be made from the Escrow Fund or other settlements or
judgments in proposing supplemental distributions from the Net Settlement Fund.
23
DATED: _______________, 2015
BY ORDER OF THE COURT
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF NEW YORK
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