Adelphia Communications tops list of disbursed securities class actions of 2012

frtAdmin
FRT Admin
Site administrator
February 15, 2013

Roughly 100 securities class action settlements were disbursed last year, the largest being the $715 million Adelphia Communications case. Atop the list of disbursed cases in 2012 are settlements for Countrywide Financial, the Initial Public Offering case, Enron Victim Trust, Juniper Networks, and HealthSouth Corp. Other notable cases that disbursed last year include Del Monte Foods, New Century Financial, and Credit Suisse. The total settlement funds for the top ten cases topped $3 billion. The majority of the cases in the top ten had settlement funds over $100 million and three settlements had fund pools over $500 million.

The $586 million Initial Public Offering case was originally filed in June of 2001, the earliest a case on the top ten disbursed list was filed. The average number of days from when a case in the top ten was filed to its disbursement day is 2383, or about six and a half years. This figure is a good illustrator of the importance of continuously tracking and monitoring cases. From the date a case is filed, there are numerous hearings, procedures and deliberations, which can result in cases being consolidated, dismissed, or ultimately settled and distributed. It’s important to maintain a thorough list of all cases and track their status throughout the case lifecycle from filing until distribution.

Once claim submissions for a settled case are no longer being accepted by the claims administrator, the administrator must determine how much each claimant is entitled to. To do so, the administrator takes into account the case’s total settlement pool, the total number of claimants, and the recognized loss suffered by each claimant, among other factors. After considering these aspects, a pro-rata payout percentage is determined. For most cases, the pro-rata is applied to the claimant’s recognized loss calculation to decide what a claimant’s recovery will be. The pro-rata payout for seven of the top ten disbursements from last year ranged from 3% to 25%, with the average being 14.65%.

*The IPO case consisted of over 300 distinct pro-rata amounts.
**The Del Monte case distributed $0.3596 and the Delphi case distributed $0.65 for each share tendered that was included in a valid claim in the respective merger settlements.

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