class action worldcom

[FaGal]

Per WorldCom le banche pagano

DAL NOSTRO INVIATO NEW YORK • La class action per i bond WorldCom è diventata la causa collettiva su titoli finanziari che ha recuperato il maggior importo della storia per gli investitori traditi. Anche varie banche non statunitensi, infatti, tra cui Banca Intesa, hanno scelto di pagare per non affrontare il processo che si aprirà settimana prossima a New York: secondo l'accusa, le banche europee, come le altre che vendettero bond WorldCom nel 2001, non potevano non sapere, o comunque erano tenute a sapere attraverso una doverosa due diligence, del già avanzato dissesto del gruppo finito in bancarotta. Caboto Holding Sim del gruppo Intesa ha accettato di pagare 37,5 milioni di dollari per il settlement, la tedesca West LB 75 milioni, il gruppo olandese Abn Amro 278 milioni di dollari, la Bnp Paribas Securities 37,5 milioni. Alla transazione hanno aderito anche due società giapponesi: Mitsubishi Securities pagherà 75 milioni e Mizuho 37,5 milioni.
Alan G. Hevesi, il Controller dello Stato di New York nominato Lead Plaintiff ( principale rappresentante degli attori nel procedimento), ha annunciato raggiante che con questi ulteriori 540,5 milioni di dollari la class action di WorldCom ha già recuperato per i risparmiatori circa 3,7 miliardi di dollari: il maggior importo mai raggiunto in una securities class action, superiore al precedente record di 3,18 miliardi rastrellato nello scandalo della Cendant Corporation. Non solo: Hevesi ha sottolineato che le quattro banche straniere, che sottoscrissero in totale il 12% dell'offerta di bond WorldCom del maggio 2001, hanno pagato proporzionalmente più ( il 5% Abn, il 13% le altre 3) degli istituti che avevano già accettato settlement in precedenza, a partire da Citigroup che il 12 novembre scorso ha dato la sua disponibilità a versare ben 2,6 miliardi di dollari. La scorsa settimana è stata la volta di BankAmerica con 460,5 milioni, Lehman Brothers con 62,7 milioni, nonché Credit Suisse, Ubs e Goldman Sachs con 12,5 milioni ciascuno.
Mentre una giuria è in camera di consiglio da una settimana per decidere il destino di Bernard Ebbers, l'ex Ceo di WorldCom accusato di un ruolo chiave nella truffa da 11 miliardi di dollari che causò la bancarotta, la class action contro le banche, i revisori e 12 ex dirigenti della società che dovrebbe iniziare il 17 marzo vede tra i convenuti ancora quattro istituti di credito. Capofila JP Morgan Chase e Deutsche Bank, sempre che non accettino un settlement in extremis, verosimilmente più ( proporzionalmente) oneroso di quello di Citigroup. Per JP Morgan, dovrebbe trattarsi di una cifra vicina a 1,5 miliardi.
http://www.assinews.it/rassegna/arti...e110305bo.html

[pietro66]

Citigroup: $2.575 billion
Bank of America: $460.5 million
Deutsche Bank Securities: $325 million
ABN Amro: $268.3 million
West LB AG: $75 million
Tokyo Mitsubishi: $75 million
Lehman Brothers: $62.7 million
Caboto Holding SIM: $37.5 million
BNP Paribas: $37.5 million
Mizuho Int'l: $37.5 million
CS First Boston: $12.54 million
Goldman Sachs: $12.54 million
UBS AG: $12.54 million

TOTAL: $3.991 billion

[FaGal]

meno male che qualcuno legge

[FaGal]

More courthouse steps settlements in WorldCom class action

Deutsche Bank AG, German bank WestLB AG and Italian bank Caboto Holding Sim joined most of the other financial institution-defendants in the WorldCom class action yesterday in agreeing to settle fraud allegations for their participation in the sale of WorldCom Inc. bonds in 2000 and 2001. The settlements come on the eve of a scheduled trial of the case next week, and leaves JP Morgan Chase and a couple of smaller financial institutions as the only remaining defendants in the case. This link will take you to the previous posts on the WorldCom class action settlements.

Deutsche Bank's settlement amount is $325 million, while WestLB agreed to pay $75 million and Caboto $37.5 million. Those amounts increase the WorldCom class action settlement pot to about $3.7 billion, which is for the time being the largest recovery ever in in a securities class-action lawsuit. Nevertheless, sharpies on such matters are already betting that the settlement pot and/or damages awarded against the financial institution-defendants in the Enron class action will lap the WorldCom settlement pot by several billion.

[FaGal]

MAY 16, 2005

LEGAL AFFAIRS

The Kings Of Class Actions
Max Berger and Sean Coffey are riding high after making WorldCom's bankers pay up

Here's what life is like for Max W. Berger these days: The maitre d' at Manhattan restaurant Cité prances around the 58-year-old founding partner of plaintiffs' law firm Bernstein Litowitz Berger & Grossmann LLP (BLBG) as Berger is delivered to his favorite corner table. He is offered a sampling of fine wine, and his filet mignon is on the house after he complains that the first one is too fatty. Berger soaks up the attention. But the real treat arrives with dessert. Jonathan J. Lerner, a partner at venerable law firm Skadden, Arps, Slate, Meagher & Flom LLP, who opposed Berger in a massive shareholder lawsuit five years ago, saunters up and says to his dinner companion: "This guy took $3 billion from me. He's the best lawyer in New York."

Berger and his partner, senior trial attorney John P. "Sean" Coffey, are feeling pretty good about themselves these days. Coffey, 49, has just finished up a $65 million settlement with accounting firm Arthur Andersen LLP over its dubious number-crunching at disgraced telecom company WorldCom Inc. That's a paltry amount, but it marks the end of an exhausting two-year battle against WorldCom on behalf of a group of investors led by the New York State Common Retirement Fund. Coffey and Berger's real achievement, and the main reason for their newfound prominence, came in March, after the two persuaded 17 financial titans, including Citigroup (C ) and JPMorganChase & Co., to pay investors $6.2 billion for pushing WorldCom bonds when the banks allegedly knew the company's financial condition had deteriorated. The banks all denied liability. BLBG will get about $100 million for the partners' efforts.

It has been an exceptionally rich time for plaintiffs' lawyers, and for Berger and Coffey in particular. BLBG has helped win the five largest securities litigation settlements ever and more than $15 billion in damages for investors over the past decade. On May 1, Securities Class Action Services, a unit of Institutional Shareholder Services, named the firm the top shareholder litigators in 2004, with settlements worth $3.5 billion, almost four times the amount won by well-heeled competitor Milberg Weiss Bershad & Schulman LLP. The fees from all those cases amount to some $200 million for BLBG.

With that success comes more scrutiny. Berger still keeps his credit cards wrapped in a green rubber band, and he and Coffey still ride the subway to court in Manhattan. They say they never chase frivolous cases and are always prepared to make good on the threat of going to trial. But they can't avoid the charge that their fees are excessive; in fact, after their case against travel and real estate company Cendant Corp. (CD ) in 1999 a judge ordered them and their co-lead counsel, Barrack, Rodos & Bacine, to cut their take from $262 million to $55 million. And there's not a plaintiffs' attorney around who wouldn't say he's trying to restore integrity to his besmirched profession. For the record, Berger says he would never take a lousy case just for the fee: "We will never practice law on an eat-what-you-kill basis."

Plaintiffs' lawyers are also criticized for being too cozy with big institutional shareholders, especially the public pension funds they often represent. Berger and Coffey get grief for political contributions Berger gave to New York politicians who control the state's pension fund, in what is commonly regarded as an unsavory "pay-to-play" arrangement. Before being hired in the WorldCom case, Berger raised $10,000 for H. Carl McCall, New York's former comptroller, who did in fact hire BLBG after the fund lost more than $300 million when WorldCom collapsed. Berger has also raised money for Alan G. Hevesi, the current comptroller. Berger calls these contributions "getting a foot in the door" and insists that his firm's record of big settlements for investors speaks for itself. Hevesi says the allegations of favoritism are "nonsense."

DIVIDE AND CONQUER
There's no denying that the WorldCom case is what allowed BLBG to enter the upper echelon of plaintiffs' law firms. After WorldCom tumbled into bankruptcy in July, 2002, amid an $11 billion accounting scandal, oodles of shareholder suits alleging fraud against former Chairman Bernard J. Ebbers, execs and directors, as well as Arthur Andersen, followed. Working with lead plaintiff Hevesi and Barrack Rodos again, Berger and Coffey devised a plan to go after the 17 banks that helped WorldCom raise $17 billion in bonds.

Their strategy relied in large part on the complex liability system for investor lawsuits. Under the Securities Act of 1933, a defendant can be held "jointly and severally liable" for damages sought by the plaintiffs. That meant that as banks settled individually, those left could be held responsible for all remaining damages, even if the amount would be higher than the corresponding percentage of bonds they actually sold. The defendants also faced the very real prospect of a trial -- and former New York prosecutor Coffey, unlike many plaintiffs' lawyers, relished that. "It wasn't going to get any easier for them," he says.

Lawyers for the 17 banks initially offered to settle for just $35 million, according to sources familiar with the talks. Berger and Coffey considered that an insult. They demanded $10 billion. Then, one by one, they picked off defendants. Citigroup, dogged by allegedly tainted research from telecom analyst Jack B. Grubman and suggestions that it may have used his reports to win business from WorldCom, recognized that it risked losing a trial. It settled for $2.65 billion last May. Then, in January, 11 WorldCom directors agreed to pony up $54 million (later reduced to $20.25 million) in personal funds, while denying liability. By the end of March, the 16 other banks had hammered out deals. JPMorganChase was the last to give in and, as a result, ended up paying $2 billion -- which, measured against the share of WorldCom bonds it underwrote, was about 45% more than Citigroup agreed to.

It was a divide-and-conquer strategy aimed squarely at Jay B. Kasner, lead counsel for the group of 17 banks as well as JPMorgan Chase individually -- and widely blamed for bungling the case. Those near Kasner, in turn, accuse Berger and Coffey of distorting public accounts of the negotiations and call the news leaks "dirty pool." They say Kasner was hamstrung by the difficulty of coordinating strategies among 17 different banks.

Berger and Coffey do share a street-tough attitude. Born in a Bronx housing project, Berger grew up sharing a bedroom with his sister in a Queens tenement. His father, Izzy, managed the RKO Palace Theater and, Berger says, "never made any money." Berger earned an accounting degree from City College of New York and got through Columbia Law School on a scholarship and by working three jobs. He and three partners founded BLBG in 1983.

Coffey, the eldest of seven children, grew up a self-described B.I.C. -- Bronx Irish Catholic. Both parents came to the U.S. in the 1950s and sent the kids back to Ireland each summer. Coffey's dad, a janitor and guitar player, drank hard and worked little. His mom, Mary, ran the family with a wry sense of humor, once joking she may have used boric acid instead of baking soda in the bread she made for Coffey's boss, then-Vice-President George H.W. Bush. Coffey attended the Naval Academy and became a spotter on the P-3C Orion plane, a submarine chaser that hunted Soviet vessels in the Atlantic. Later, while serving as Bush's personal aide, Coffey attended Georgetown Law School at night. "I am proud of his accomplishments and his reputation," Bush told BusinessWeek.

Next on the docket: HealthSouth Corp. (HLSH ) BLBG and another firm represent Retirement Systems of Alabama, the state employees' pension fund, in a class action against the troubled hospital chain; its founder, Richard M. Scrushy, is on trial for fraud. Coffey and Berger say they'll ask for billions in damages in the civil case. If they prevail, the lawyers of the moment will earn more bragging rights -- along with some $10 million in fees.


By Brian Grow in New York

http://www.businessweek.com/magazine...0/b3933091.htm