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

Background

The plaintiffs, including Fund Liquidation Holdings LLC as assignee and successor-in-interest to Sonterra Capital Master Fund Ltd., sought final approval of a class-action settlement with TP ICAP plc and related entities, Gottex Brokers SA, and Velcor SA. The opinion refers to these entities collectively as the settling brokers. The underlying action alleged conduct involving Swiss franc 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 the alleged manipulation or other alleged wrongdoing occurred.

Settlement Class and Notice

For settlement purposes only, the court finally certified a class consisting of people and entities that purchased, sold, held, traded, or otherwise had an interest in specified Swiss franc LIBOR-based derivatives during the class period. The order excluded defendants, certain affiliates, agents, and alleged co-conspirators, as well as the United States Government. The court reconfirmed that the requirements of Federal Rule of Civil Procedure 23 were satisfied for the settlement, including numerosity, common questions, typicality, adequate representation, predominance, and superiority.

The court approved the plaintiffs as settlement-class representatives and appointed Lowey Dannenberg, P.C. as class counsel. It found that the mailed notice, publication notice, website, and other parts of the notice plan were the best practicable notice and gave class members an opportunity to exclude themselves, object, appear at the fairness hearing, and address the distribution plan and fee requests. The order also found that the settling brokers complied with the notice obligations under the Class Action Fairness Act.

Ruling

The court finally approved the settlement under Rule 23 and found it fair, reasonable, adequate, and in the best interests of the settlement class. It found that the settlement resulted from arm’s-length negotiations, that the plaintiffs and class counsel adequately represented the class for settlement purposes, and that class members were treated equitably. It also approved the distribution plan and proof-of-claim and release form.

Settling class members must submit a proof of claim and release to receive a share, if any, of the net settlement fund. The order states, however, that the claims are released and barred under the settlement agreement regardless of whether a class member signs a separate release and covenant not to sue. The order gives the settlement and released claims binding and preclusive effect in covered proceedings against the released parties.

The court directed dismissal of the action against the settling brokers and released parties, but not any other defendant, fully, finally, and with prejudice. It permanently barred covered claims against the settling brokers and released parties and addressed related contribution and indemnification claims. The court retained exclusive jurisdiction over settlement implementation, enforcement, disputes concerning the settlement and settlement fund, and certain administration costs and distributions. The order states that requests for attorneys’ fees, expense reimbursement, and incentive awards would be decided in a separate order. The court’s settlement-only class certification does not prevent defendants from challenging a later request to certify a class in the litigation.