Court Opinion

ID: 4293303
Source: CourtListenerOpinion
Date Created: 2018-07-11 20:05:28.314889+00
Date Added: 2024-06-11T14:38:30.555908
License: Public Domain

IN THE UNITED STATES COURT OF FEDERAL CLAIMS

FRANK P. SLATTERY, JR., et al.,

               Plaintiffs,
                                                           Civil Action No. 93-280 C
                                                           (Loren A. Smith, Senior Judge)
       v.
                                                           December 15, 2011
THE UNITED STATES,

               Defendant.

                                         FINAL ORDER

       1.      Pursuant to the Court’s Published Opinion and Order dated November 18, 2011,
and Order dated December 1, 2011, Intervenors’ Steven Roth and Interstate Properties
(“Intervenors”) Second Amended Complaint is DISMISSED.

       2.      Pursuant to the Court’s decisions in this matter dated August 14, 2002 and
February 10, 2006, and in light of the decisions of the three-judge Panel of the Federal Circuit,
Slattery v. United States, 583 F.3d 800, 829 (Fed. Cir. 2010), and of the en banc Panel, Slattery
v. United States, 635 F.3d 1298, 1321 (Fed. Cir. 2011), this Court awards Plaintiffs Frank P.
Slattery, et al. (“Plaintiffs”), acting derivatively on behalf of the Federal Deposit Insurance
Corporation, as receiver for Meritor Savings Bank (the “Receiver”), TWO HUNDRED
SEVENTY-SIX MILLION DOLLARS AND NO CENTS ($276 million) in damages from the
Defendant, which sum is to be deposited with the Receiver.

       3.      Out of the $276 million, the Receiver shall pay the common fund litigation costs
and attorneys’ fees hereby approved by the Court as set forth on attachment A to this Order to
Winston & Strawn LLP, which shall thereafter promptly make arrangements to further distribute
the monies in accordance with Attachment A. The Court specifically approves and awards
Winston & Strawn LLP (“Winston”) $23,990,252 attorneys’ fees to be recovered as part of the
common fund costs, as set forth in Attachment A. In so doing, the Court notes that there has
been no objection to the request for fees from any person with standing to do so. In awarding
such fees, the Court specifically has considered the complexity of the case (as evidenced by the
split decisions in both the panel and en banc decisions of the Court of Appeals), the serious risk
of nonpayment assumed by the law firm in the event of an eventual adverse decision, the unusual
duration of the action (nearly 19 years), the quality of counsel and the degree of success. The
Court also has considered the Declarations of Robert A. Clifford and Michael D. Hausfield and
finds that the percentage fee to be awarded to Winston is well in line—and indeed compares
favorably—with other contingency fee cases.

       4.       At its December 1, 2011 hearing, the Court held that current shareholders should
be paid without waiting for the finalization of any appeal by Intervenors, and directed the
Plaintiffs, Defendant and the Receiver to propose a plan for distribution to current Meritor
shareholders before the finalization of any such appeal. Although the Defendant and Receiver
do not concede that such a Court-ordered distribution is within the jurisdiction of this Court or
may properly be ordered before finality of any appeals, and reserve the right to appeal the
Court’s order that the judgment for $276 million be paid to the Receiver and that the Receiver
must make a distribution to current shareholders before the finalization of any appeals, to comply
with the Court’s order, and for purposes of complying with the rulings of the Court of Appeals
and this Court under the facts peculiar to this case, the Receiver and Plaintiffs have agreed to,
and the Court expects, the following procedures for distribution to be followed if there is no stay
of the Court’s order that the Receiver must, to the extent reasonably practicable, begin making
distribution before the finalization of any appeal:

            •   The Receiver will, upon receipt of the judgment award, place the judgment funds
                in an interest-bearing account.
            •   The Receiver will pay $18,316,445 of the common fund expenses awarded by the
                Court as set forth on attachment A hereto promptly, and no later than 30 days
                after the receipt of the funds. The remainder of the common fund expenses
                ($14,000,000) will be paid not before February 7, 2012 and not later than
                February 21, 2012.
            •   The Receiver will pay individual shareholders who do not own their shares
                through the Depositary Trust Corporation (“DTC”) their pro rata share of the
                entire amount of the $276 million judgment (minus the common fund expenses
                set forth in Attachment A to this Order).
            •   Out of the funds to be distributed for the shares owned through DTC, the Receiver
                will set aside an escrow for SEVEN MILLION SIX HUNDRED AND
                TWENTY-SIX THOUSAND THREE HUNDRED AND EIGHTY-SEVEN
                DOLLARS AND SIXTY CENTS ($7,626,387.60). The remainder of the funds
                will be paid to DTC, for distribution to the current shareholders who own through
                DTC.
            •   The escrow amount (and accrued interest) shall be distributed, in whole or in part,
                if at all, to Intervenors in accordance with any final decision, after all appeals, if
                any, are exhausted. To the extent the Intervenors are ultimately denied any
                recovery or are awarded less than the amount set aside on their behalf, any
                remaining funds of the $7,626,387.60 in escrow will promptly be distributed to
                DTC, for pro rata distribution to the current shareholders who own through DTC.
            •   The Receiver will take all reasonable measures to ensure prompt and timely
                distribution of the judgment proceeds to Meritor’s current shareholders according
                to the procedures described above. Plaintiffs agree and the Court holds that the
                Receiver is not responsible for how promptly DTC will distribute to brokers, and
                brokers to their customers who are the beneficial owners of shares. Distribution
                to DTC shall constitute full satisfaction of any obligations of the Receiver to
                current shareholders for whom shares are held through DTC.
            •   As previously ordered by the Court and affirmed by the Federal Circuit’s 2010
                decision, the Receiver will not make any deductions of any kind whatsoever for
                debts or potential debts owed to any creditors or potential creditors with higher
                priority whose claims are, or could be, part of the receivership deficit.
            •   On or around March 15, 2011, Plaintiffs and the Receiver will advise this Court in
                writing of the progress of the distribution. At that point or thereafter, this Court
                will seek to accommodate requests for a conference call or further status hearing
                as appropriate.
       5.       The Plaintiffs stipulate that they release all claims arising from or relating to this
action, and from any further obligation or liability arising from or relating to: (1) the breach of
contract found by this Court; (2) the Meritor receivership; (3) payment of the judgment by
Defendant to the Receiver prior to final adjudication of any appeal by the Intervenors, or (4) any
distribution by the Receiver, including but not limited to the general procedures outlined and
approved in this Order, whether asserted or not against the Defendant United States including the
FDIC in its corporate capacity upon depositing the $276 million with the Receiver. Defendant
shall not be required to make payment to the Receiver until Plaintiffs execute a release
satisfactory to Defendant.
        6.      Because the United States and FDIC in its corporate capacity shall not, under any
circumstance, be liable in excess of the $276 million awarded under this Final Order, upon
payment of the $276 million to the Receiver for further distribution as set forth in this Order, the
United States and FDIC in its corporate capacity shall be and are hereby discharged and released
from any liability to Plaintiffs arising from or relating to this action, and from any further
obligation or liability arising from or relating to: (1) the breach of contract found by this Court:
(2) the Meritor receivership; (3) payment of the judgment by Defendant to the Receiver prior to
final adjudication of any appeal by the Intervenors, or (4) any distribution by the Receiver,
including but not limited to the general procedures outlined and approved in this Order.
        7.      Upon satisfaction of the terms of this Order, the FDIC in its Receivership capacity
shall be and is hereby discharged and released from any further obligations arising from or
relating to this action.
        8.      In the event any party should appeal this Order or appeal any further Order of the
Court that could have the effect of delaying the distribution of the judgment proceeds to the
many shareholders of Meritor, this Court—in light of the unique circumstances of this case and
its duration—encourages the parties to seek an expedited appeal and resolution. This Court also
finds that an expedited appeal would serve the interest of justice.
        9.      The entry of this order does not terminate any jurisdiction that this Court
possesses to ensure the satisfaction of this judgment and the appropriate and prompt distribution
of the judgment funds.
        10.     The Clerk is directed to enter judgment accordingly.

                                                       /s/Loren A. Smith
                                                       Loren A. Smith, Senior Judge
                                                       United States Court of Federal Claims

DC:695522.2
                                                                       Attachment A

Litigation Investors

Payor                                          Initial      Interest   Value as of
                                               Value                   10/31/11
A. Siemens                                     $3,000       $3,207     $6,207
Analysis Group                                 $233,949     $120,020   $353,969
Ariel Management Corporation                   $20,000      $23,064    $43,064
Cornerstone Research                           $385,975     $199,046   $585,021
Davis, Christopher J.                          $100,000     $11,850    $111,850
Deltec Asset Management                        $200,000     $207,240   $407,240
Fallen Angels Limited Partnership              $380,085     $318,284   $698,369
Gabriel Capital Corporation                    $25,000      $26,204    $51,204
Resurrection Partners LLC                      $250,000     $129,515   $379,515
Hitschler, Anthony W.                          $100,000     $16,308    $116,308
Hoffman, Burt                                  $30,000      $13,071    $43,071
Keefe Managers, Inc.                           $25,000      $36,186    $61,186
Korman, Steve H.                               $50,317      $68,233    $118,550
LCLR                                           $40,000      $1,394     $41,394
Liem, Gie                                      $15,000      $524       $15,524
Liem, Lisa                                     $15,000      $524       $15,524
Martha & Wistar Morris (Eleventh Generation)   $150,000     $76,769    $226,769
Morgens Waterfall                              $450,000     $364,383   $814,383
Salter, Dennis                                 $100,000     $47,618    $147,618
Scattergood, Harold                            $15,000      $523       $15,523
Sherrerd, John                                 $125,000     $65,657    $190,657
Slattery, Frank P. Jr.                         $2,149,827   $1,578,569 $3,728,396
Steve Roth/Interstate Properties               $50,000      $104,850   $154,850
Total for Litigation Investors and Experts     $4,913,153   $3,413,040 $8,326,193
(with interest through 10/31/11)

Winston & Strawn: Contingency Fee                           $23,850,000
                  Accrued Additional Fees                      $140,252

                       Winston Total                        $23,990,252

Overall Total:                                              $32,316,445