FrontPoint Asian Event Driven Fund, Ltd. v. Citibank, N.A.

Background

The representative plaintiffs—Fund Liquidation Holdings LLC, as assignee and successor-in-interest to FrontPoint Asian Event Driven Fund L.P., Moon Capital Partners Master Fund Ltd., and Moon Capital Master Fund Ltd.—asked the court to give final approval to a class-action settlement with Credit Suisse AG. The opinion describes the action as involving alleged manipulation of derivatives based on the Singapore Interbank Offered Rate (SIBOR) and/or Singapore Swap Offer Rate (SOR). Credit Suisse consented to the motion for final approval.

Settlement class

For settlement purposes only, the court finally certified a class of all people and entities that purchased, sold, held, traded, or otherwise had an interest in SIBOR- and/or SOR-based derivatives during the period from January 1, 2007, through December 31, 2011. The United States, the defendants and their parents, subsidiaries, affiliates, and agents, and any alleged co-conspirators were excluded. The court found that the settlement class met the requirements of Federal Rule of Civil Procedure 23(a) and Rule 23(b)(3), including numerosity, common issues, typicality, adequate representation, predominance, and superiority. The court approved the representative plaintiffs as class representatives and Lowey Dannenberg, P.C. as class counsel, solely for purposes of the settlement.

Notice and objections

The court found that the mailed, published, website, and class-notice procedures were the best practicable notice and reasonably informed class members about the action, their rights to opt out or object, the fairness hearing, the distribution plan, and requests for fees, expenses, and incentive awards. The court also found that Credit Suisse complied with the Class Action Fairness Act’s notice requirements. One settlement class member validly opted out and therefore received no settlement payment and had no rights under the settlement against Credit Suisse. No objections were submitted.

Ruling

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

The court approved the settlement fund’s establishment as a qualified settlement fund, approved the distribution plan and proof-of-claim-and-release form, and confirmed A.B. Data, Ltd. as settlement administrator. Class members generally had to submit a release and promise not to sue to receive a distribution, but the settlement’s release applied regardless of whether a class member submitted that release. The settlement and order were given binding and claim-preclusive effect for released claims.

The court approved the release and promise not to sue and directed dismissal of the action against Credit Suisse and the released parties fully, finally, and with prejudice. The order expressly stated that this dismissal did not apply to any other defendant. The court also permanently barred and enjoined released claims and certain contribution, indemnification, setoff, and related claims described in the order. The settlement did not admit liability, wrongdoing, the truth of the allegations, or the validity of the claims. The court retained exclusive jurisdiction over implementing and enforcing the settlement and the final approval order. The request for attorneys’ fees, expense reimbursement, and incentive awards was reserved for a separate order.