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

Background

The plaintiffs in the action included Fund Liquidation Holdings LLC, as assignee and successor-in-interest to Sonterra Capital Master Fund Ltd., and other named plaintiffs. They pursued claims concerning Swiss franc LIBOR-based derivatives against multiple defendants. The order addressed only the proposed settlement with NatWest Markets PLC, formerly known as the Royal Bank of Scotland PLC, which the order calls “RBS.”

The court held a fairness hearing on September 27, 2023, after mailed notice, publication notice, a website, and other notice measures were implemented for settlement class members. The order states that the notice informed class members about the action, their rights to exclude themselves or object, the fairness hearing, the distribution plan, and requests for attorneys’ fees, incentive awards, and expense reimbursement.

Settlement class and approval

For settlement purposes only, the court finally certified a class consisting 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. The United States Government and the defendants, their specified affiliates and agents, and alleged co-conspirators were excluded.

The court reconfirmed that the requirements of Rule 23 of the Federal Rules of Civil Procedure were met for purposes of this settlement. It found that the class was sufficiently numerous, that common legal and factual questions existed, that the plaintiffs’ claims were typical, that the plaintiffs’ 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 controversy.

The court approved the plaintiffs as settlement-class representatives and appointed Lowey Dannenberg, P.C. as class counsel. It found that the settlement was fair, reasonable, adequate, and in the best interests of the settlement class; resulted from arm’s-length negotiations; and treated class members equitably. It approved the distribution plan and the proof-of-claim and release form. The order states that a separate order would address class counsel’s request for attorneys’ fees, expense reimbursement, and incentive awards.

Release, dismissal, and injunctions

The settlement released specified claims relating to conduct alleged, or that could have been alleged, in the action concerning Swiss franc LIBOR-based derivatives and certain similar financial instruments. The order stated that claims against named defendants other than RBS were not released by this settlement, subject to the specific terms described in the order.

The court approved the release and covenant not to sue. It directed that the action be dismissed against RBS and the released parties “fully, finally and with prejudice,” while expressly stating that the dismissal did not apply to other defendants. Settling class members were bound by the settlement regardless of whether they submitted a proof of claim and release, although they had to execute the required release and covenant not to sue to receive a share of the net settlement fund. The order confirmed Epiq Class Action and Claims Solutions, Inc. as settlement administrator.

The court permanently barred releasing parties and settling class members from bringing, prosecuting, joining, or assisting other proceedings based on the released claims against RBS or the released parties. It also addressed contribution, indemnification, setoff, and related claims involving RBS, the released parties, and other defendants. The order gave the settlement and final approval order preclusive effect in covered pending and future proceedings against the released parties.

Other provisions and disposition

The settlement and approval order were not admissions, adjudications, or evidence of a legal violation, wrongdoing, liability, injury, or damage by RBS or any released party. The court also stated that certification of the settlement class did not affect future requests to certify a class or challenges to the plaintiffs’ ability to represent a class.

The court reserved exclusive jurisdiction over implementing and enforcing the settlement, resolving disputes concerning the settlement and settlement fund, and considering administration costs, fees, and distributions. The order also approved the settlement fund’s establishment as a qualified settlement fund and required protection of claimants’ submitted data and personal information.

Judge Sidney H. Stein therefore entered a final approval order for the settlement with NatWest, certified the class solely for settlement purposes, approved the releases and related injunctions, and directed dismissal against RBS and the released parties with prejudice. The order provided that the approval would become null and void as to the settlement if the settlement were validly terminated, disapproved, or failed to become final under its terms.