Sonterra Capital Master Fund Ltd. v. Credit Suisse Group AG

Background

The order concerns a proposed settlement between the plaintiffs and Deutsche Bank AG and DB Group Services (UK) Ltd., collectively called Deutsche Bank. The opinion’s caption identifies Fund Liquidation Holdings LLC as the assignee and successor-in-interest to Sonterra Capital Master Fund Ltd. The plaintiffs alleged conduct concerning Swiss-franc London Interbank Offered Rate (LIBOR)-based derivatives, including alleged manipulation of Swiss-franc LIBOR under the Commodity Exchange Act and other legal theories. The order does not decide whether Deutsche Bank committed wrongdoing or whether the plaintiffs suffered damages.

Settlement Class and Notice

For settlement purposes only, the court finally certified a class of all persons and entities that purchased, sold, held, traded, or otherwise had an interest in Swiss-franc LIBOR-based derivatives during the class period, subject to the exclusions stated in the settlement agreement. The excluded groups include the defendants and certain related entities or alleged co-conspirators, as well as the United States Government.

The court found that the settlement class satisfied the requirements of Rule 23 of the Federal Rules of Civil Procedure for settlement purposes. It found numerosity, common questions, typicality, adequate representation, predominance of common issues, and superiority of a class action. The court appointed the named plaintiffs as settlement-class representatives and appointed Lowey Dannenberg, P.C. as class counsel.

The court also found that the mailed notice, publication notice, website, and other parts of the notice plan were the best practicable notice and reasonably informed class members about the case, the settlement, the right to exclude themselves, the right to object, the fairness hearing, the distribution plan, and requests for fees, expenses, and incentive awards. The order’s text contains formatting or scanning irregularities concerning the number of exclusions and objections, so it does not clearly establish those numbers.

Ruling

Judge Sidney Stein finally approved the settlement under Rule 23, finding it fair, reasonable, adequate, and in the best interests of the settlement class. The court found that the settlement resulted from arm’s-length negotiations by experienced counsel, that class counsel and the plaintiffs adequately represented the class for settlement purposes, and that class members were treated equitably. The parties were directed to carry out the settlement according to its terms.

The court approved the settlement fund’s fiduciary account as a qualified settlement fund under section 468B of the Internal Revenue Code. It approved the distribution plan and the proof-of-claim and release form. Epiq Class Action and Claims Solutions, Inc. was confirmed as settlement administrator. A settling class member must submit the required release and promise not to sue to receive a share of the net settlement fund, but the order states that claims are released and barred under the settlement agreement even if the member does not execute that document.

The court approved the release and promise not to sue and directed that the action be dismissed fully, finally, and with prejudice as to Deutsche Bank and its released parties. The dismissal does not apply to the other defendants. The order permanently bars covered claims against Deutsche Bank and its released parties, including related class proceedings and certain contribution or indemnification claims. The order states that the settlement and final approval order are not admissions, adjudications, or evidence of liability or wrongdoing. The court reserved exclusive jurisdiction over implementing and enforcing the settlement and stated that attorneys’ fees, expense reimbursement, and incentive awards would be addressed in a separate order.