Safron Capital Corp v. Morgan Stanley

Background

The filing concerns Safron Capital Corp. v. Morgan Stanley and the related action brought by the Estate of Bernard J. Sherlip and The Barrett Living Trust against Morgan Stanley and Morgan Stanley Smith Barney LLC. The parties submitted a joint letter about consolidating the two actions, appointing interim class counsel, filing a consolidated complaint, and setting deadlines for the defendants’ response.

The cases concern allegations about the interest rates paid through cash-sweep programs. Safron Capital also supported a pending request to the Judicial Panel on Multidistrict Litigation to centralize cash-sweep cases involving multiple financial institutions in one federal court. Safron Capital argued that the cases involved a common practice and that centralization would promote efficiency. The Sherlip plaintiffs and the defendants opposed that request, arguing that the institutions’ contracts, disclosures, and decision-making processes differed and that there were no meaningful common factual issues.

Parties’ Proposed Schedules

The Sherlip plaintiffs and the defendants proposed deadlines beginning with motions to appoint interim class counsel, followed by responses and replies, a consolidated complaint 45 days after appointment, and a defense answer or motion to dismiss 45 days after the consolidated complaint. Safron Capital proposed waiting until 30 days after the Judicial Panel on Multidistrict Litigation decided the centralization request before filing a consolidated complaint. Safron Capital proposed shorter response and briefing periods after that complaint was filed.

The letter also stated that another action, McKinney v. Morgan Stanley et al., had been filed and that Safron Capital believed it should be related and consolidated with the other two actions. The other parties had not yet taken a position on that request.

Order

Judge Valerie E. Caproni ordered the parties to submit, no later than Wednesday, November 27, 2024, a joint letter stating whether they believed McKinney should be consolidated with the Safron and Sherlip actions if it was assigned to Judge Caproni as a related case. The letter had to be filed on the dockets of all three cases.

The provided text does not show a separate ruling on whether the two existing cases were consolidated, which proposed schedule applied, whether interim class counsel was appointed, or whether the broader centralization request was granted or denied. It also contains no ruling on the merits of the underlying claims.