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

Background

The order concerns a proposed settlement between the representative plaintiffs and Deutsche Bank AG in an action captioned Fund Liquidation Holdings LLC, et al. v. Citibank, N.A., et al. The claims involved alleged manipulation of the Singapore Interbank Offered Rate (SIBOR) and Singapore Swap Offer Rate (SOR), and derivatives based on those benchmarks. The order did not decide whether Deutsche Bank or any other defendant violated the law. It states that the settlement and related materials are not admissions or evidence of liability, wrongdoing, damages, or the truth of the allegations.

Settlement Class

For settlement purposes only, the court finally certified a class of persons and entities that purchased, sold, held, traded, or otherwise had an interest in SIBOR- or SOR-based derivatives during the period from January 1, 2007, through December 31, 2011. The class excluded the defendants, their specified affiliates and agents, alleged co-conspirators, and the United States Government.

The court found that the requirements of Rule 23 of the Federal Rules of Civil Procedure were met for purposes of the settlement. It found that the class was sufficiently numerous, that common legal and factual questions existed, that the representative plaintiffs’ claims were typical, that their interests did not conflict with absent class members, and that class counsel adequately represented the class. It also found that common issues predominated and that a class action was superior to other methods of resolving the dispute. The representative plaintiffs were approved as class representatives, and Lowey Dannenberg, P.C. was appointed class counsel for the settlement.

Notice and Exclusion

The court found that the mailed notice, publication notice, website, and other notice procedures were the best practicable notice and reasonably informed class members about the action, their rights to exclude themselves or object, the fairness hearing, the distribution plan, and the requests for fees and incentive awards. The court also found that Deutsche Bank complied with its obligations under the Class Action Fairness Act.

One settlement class member validly excluded itself. That member was not entitled to payment or rights under the settlement and was treated as excluded from the action against Deutsche Bank. The court found that no objections had been submitted, but independently reviewed the settlement.

Ruling and Effect

Judge Alvin K. Hellerstein finally approved the settlement, finding it fair, reasonable, adequate, and in the best interests of the settlement class. He found that it resulted from arm’s-length negotiations by experienced counsel and that class members were treated equitably. The court approved the distribution plan and the proof-of-claim and release form, approved the settlement fiduciary account, and directed the parties to implement the settlement according to its terms.

The order binds settling class members and gives the settlement preclusive effect for released claims against Deutsche Bank and the other released parties identified in the settlement. Class members must execute a release and covenant not to sue to receive a share of the net settlement fund, although their claims are released under the settlement even if they do not execute that document. The court permanently barred specified lawsuits and related claims based on the released claims, including certain contribution and indemnification claims.

The court directed that the action be dismissed against Deutsche Bank 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 retained exclusive jurisdiction over implementing and enforcing the settlement, and stated that the request for attorneys’ fees, expense reimbursement, and incentive awards would be addressed in a separate order. If the settlement were validly terminated, disapproved, or failed to become final under its terms, the order provided that the settlement-related rulings would become null and void as specified in the order.