NEW YORK, July 6, 2015 /PR Newswire/ -- The following statement is being issued by Bernstein Litowitz Berger & Grossmann LLP regarding the Washington Mutual, Inc. Securities Litigation.
UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
IN RE WASHINGTON MUTUAL, INC. SECURITIES LITIGATION, This Document Relates to: ALL ACTIONS
No. 2:08-md-1919 MJP
Lead Case No. C08-387 MJP
SUMMARY NOTICE OF PROPOSED SETTLEMENT OF CLASS CLAIM FILED IN THE SIPA LIQUIDATION OF LEHMAN BROTHERS INC.
TO: All persons or entities who purchased or acquired any of the WMI Class Securities during the period from October 19, 2005 to July 23, 2008, were damaged thereby and who are members of the Class certified in the above captioned Action.1
YOU ARE HEREBY NOTIFIED, pursuant to Rule 23(e) of the Federal Rules of Civil Procedure and an Order of the United States District Court for the Western District of Washington, that Plaintiff Brockton Contributory Retirement System ("Brockton"), a certified representative of the Class in the above-captioned action (the "Action") has reached a proposed settlement with the trustee for the liquidation of Lehman Brothers Inc. ("Lehman") under the Securities Investors Protection Act of 1970 ("SIPA") that provides for the resolution of the Class Claim in Lehman's SIPA liquidation proceeding in the United States Bankruptcy Court (the "Settlement").
If the Settlement is approved by the Court, it will result in the allowance of a general, unsecured creditor claim against Lehman's estate in the SIPA Proceeding in the amount of $16,500,000 for the benefit of the Class (the "Allowed Class Claim"). The proposed settlement is in addition to the three settlements totaling $208.5 million that Plaintiffs previously achieved in this Action.2
The amount that will ultimately be recovered from Lehman's estate with respect to the Allowed Class Claim is currently unknown but it is estimated that it will potentially be 50% of the value of the Allowed Class Claim, or approximately $8,250,000. This estimate is based on the amount of the distributions made to date in the SIPA Proceeding and the estimated potential amount of all future distributions. Future distributions will depend on several factors, including how other disputed unliquidated contingent claims are resolved as well as litigation in which the SIPA Trustee is currently involved. The SIPA Trustee has agreed to reserve funds with respect to the Class Claim to bring it in parity with payments already made on other allowed claims and such amount will become payable to the Class upon the occurrence of the Effective Date of the Settlement. As of this date, a total of 27% of the allowed amount of the Class Claim, or approximately $4,455,000, has been reserved by the SIPA Trustee as a catch-up payment. The balance of the estimated potential $8,250,000 recovery will be paid as future distributions are made.
If the Settlement is approved by the Court, the amount recovered, less Court-approved fees and expenses, will be allocated among eligible Authorized Claimants. Please note: only those Authorized Claimants (i) who purchased Floating Rate Notes, 7.250% Notes and/or Series R Stock (the "Relevant Securities") during the Class Period; (ii) whose claim calculated to a Securities Act Loss under the Court-approved Plan of Allocation; (iii) who received a distribution with respect to that loss; and (iv) who cashed their distribution checks will be eligible to share in the funds obtained through the Settlement.3
You do not need to submit a claim form or take any other action to be eligible to receive funds obtained through the proposed Settlement. If the Settlement is approved, funds received in connection with the Allowed Class Claim will be distributed to eligible Authorized Claimants together with future distributions of the net settlement funds from the previously achieved settlements.
Lehman served as an underwriter of WMI's offerings of the Relevant Securities. In the Complaint filed in this Action, Plaintiffs asserted claims against Lehman for violations of the Securities Act of 1933 in connection with these offerings. However, the Action could not be prosecuted against Lehman because, after the commencement of Lehman's SIPA Proceeding in September 2008, an automatic stay was triggered under the Bankruptcy Code.
Plaintiffs timely filed a general creditor claim on behalf of the Class in Lehman's SIPA Proceeding based on Lehman's alleged violations of federal securities laws as asserted in this Action. After extensive arm's-length negotiations, Lead Counsel and Plaintiff Brockton and the SIPA Trustee have agreed that the Class Claim in the SIPA Proceeding shall have an allowed value of $16,500,000. The Allowed Class Claim will receive proportionally the same payments or distributions as are generally received by holders of other allowed general, unsecured claims against the Lehman estate in the SIPA Proceeding.
In exchange for the Allowed Class Claim, Brockton, on behalf of itself, its successors and assigns, and on behalf of any other party, person, or entity claiming by, through or under it (the "Claimant Releasing Parties"), will forever waive and release (i) the Class Claim and the individual claim filed by Brockton in the SIPA Proceeding (the "Claims") and (ii) any and all claims, liabilities, causes of action, demands, and damages (of whatever kind or nature and whether known or unknown or asserted or unasserted) that the Claimant Releasing Parties may prior to the Effective Date4 have ever had, may at the Effective Date have, or at any time after the Effective Date can, could, shall, or may have against Lehman, its estate, the SIPA Trustee, and the SIPA Trustee's agents or attorneys, related to or arising out of any of the matters, transactions, and accounts that are the subject of the Claims. If any Class Members have timely filed their own individual proofs of claim in Lehman's SIPA Proceeding, the proposed Settlement will not bar, release or otherwise affect such claims.
Brockton and Lead Counsel believe, in light of the substantial size of the recovery, the hurdles to recovering on a disputed claim in the SIPA Proceeding, the costs of achieving a recovery on such a claim through litigation and the uncertainty of the amount, if any, that could be recovered even if they prevailed, that the proposed Settlement is in the best interests of the Class.
A Settlement Hearing will be held on January 15, 2016 at 9:00 a.m. before the Honorable Marsha J. Pechman in the United States District Court for the Western District of Washington, United States Courthouse, 700 Stewart Street, Courtroom 14206, Seattle, WA 98101. At the Settlement Hearing, the Court will consider whether the proposed Settlement is fair, reasonable, and adequate and should be approved; and whether a motion by Lead Counsel for an award of attorneys' fees in an amount not to exceed 7.5% of the proceeds of the Settlement and reimbursement of litigation expenses in an amount not to exceed $225,000 should be approved.
Please review the full Notice of Proposed Settlement of Class Claim Filed in the SIPA Liquidation of Lehman Brothers Inc. (the "Notice"), which provides more details about the proposed Settlement and the definitions of capitalized terms used in this Summary Notice. The Notice is available for downloading at www.WashingtonMutualSecuritiesLitigationSettlement.com and from Lead Counsel's website, www.blbglaw.com. Copies of the Notice can also be requested by writing to In re Washington Mutual, Inc. Securities Litigation, c/o Garden City Group, LLC, P.O. Box 91310, Seattle, WA 98111-9410, by toll-free telephone at (888) 588-3788, or by emailing a request to info@WashingtonMutualSecuritiesLitigationSettlement.com, at any time prior to the Settlement Hearing.
Any objections to the proposed Settlement and/or Lead Counsel's motion for attorneys' fees and expenses, must be filed with the Court and delivered to Lead Counsel and counsel for the SIPA Trustee such that they are received no later than December 26, 2015, in accordance with the instructions set forth in the Notice.
PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE REGARDING THIS NOTICE. Inquiries, other than requests for the Notice, may be made to Lead Counsel: Hannah G. Ross, Esq., BERNSTEIN LITOWITZ BERGER & GROSSMANN LLP, 1285 Avenue of the Americas, 38th Floor, New York, NY 10019, Tel. No.: (800) 380-8496, email: firstname.lastname@example.org.
By Order of the Court
1 The WMI Class Securities are: Washington Mutual, Inc. ("WMI") common stock; Floating Rate Notes due August 24, 2009, offered in August 2006 ("Floating Rate Notes"); 7.250% Subordinated Notes due November 1, 2017, offered in October 2007 ("7.250% Notes"); 7.75% Series R Non-Cumulative Perpetual Convertible Preferred Stock, offered in December 2007 ("Series R Stock"); and Washington Mutual Capital Trust 2001's 5.375% Trust Preferred Income Equity Redeemable Securities (PIERS) Units, maturing July 1, 2041. Please note, however, that only purchasers of Floating Rate Notes, 7.250% Notes and Series R Stock will be eligible to receive proceeds of the Settlement, if it is approved.
The full definition of the Class is set forth in the Stipulation and Agreement of Settlement with the Underwriter Defendants dated June 30, 2011 (the "Underwriter Stipulation"). All capitalized terms that are not otherwise defined herein have the meanings provided in the Stipulation and Order Regarding Proofs of Claim of Brockton Contributory Retirement System, et al. (No. 5765, as Amended by No. 6802, and 5762) and Limited Related Stay Relief dated March 20, 2015 (the "Stipulation") or in the Underwriter Stipulation, both of which are available at www.WashingtonMutualSecuritiesLitigationSettlement.com.
2 The earlier settlements were: (i) a $105 million settlement with certain former officers and directors of Washington Mutual Inc. ("WMI") and WMI; (ii) an $85 million settlement with certain underwriters of WMI securities' offerings other than Lehman (the "Underwriter Settlement"); and (iii) an $18.5 million settlement with Deloitte & Touche LLP.
3 Class Members who purchased any of the Relevant Securities and receive a distribution with respect to those securities as the result of a Claim-in-Process or Disputed Claim that is approved for payment will also be eligible.
4 "Effective Date" means the date on which the District Court enters an order approving the Settlement on the terms and conditions set forth in the Stipulation and that order has become Final (as that term is defined in the Stipulation).
SOURCE Bernstein Litowitz Berger & Grossmann LLP