In non-U.S. opt-in matters, book builds can extend over long time periods – sometimes years – particularly where there are several competing organizers, large numbers of eligible institutional investors with significant losses, and repose dates (the outside legal time limit for filing claims) far in the future.

Group complaints get filed when case organizers (lawyers and funders) reach critical mass, i.e. when total losses for claimants under the contract exceed their pre-set thresholds for investment vitality. In other words, when they are ‘locked-in’ by contract, the share of potential future recoveries is sufficient to justify a multi-million dollar investment in the costs of cases and the assumption of adverse cost award risk (having to pay the other sides’ legal fees and costs if the case fails).

Whether subsequent group complaints get filed depends on whether more viable groups can be put together. When high profile scandals occur at companies with large numbers of institutional investors, there’s often enough eligibility and interest for multiple organizers to file groups complaints, and sometimes for some of them to file for more than one group. When repose dates approach if they perceive enough interested investors still on the sidelines, case organizers typically push for final registrations and group filings.

WHAT DOES THIS MEAN FOR INVESTORS?

Two cases that organizers believe have approaching repose dates in September and October 2020 illustrates the above dynamics. They are pushing for final registration this month and for both, this will be investors’ last opportunity to participate if they would like to move forward.

1. Danske Bank A/S (click here to read the case spotlight): In 2018, seven separate case organizers solicited institutions to join their recovery efforts. Two later dropped out. Since March 2019, the rest have filed multiple group complaints for hundreds of institutional investors. One is putting together the fourth round. Believing defendants will argue the repose period expires next month and three are making further, final pushes for registrations (click here to read the case update). This is a typical ‘clean-up’ effort and if you want to potentially recover, you will need to register with one of the three organizers now.

2. Tesco PLC (click here to read the case spotlight): In 2016, after book building by several case organizers, two group complaints were filed. The other efforts failed to launch, likely related to the high risks of litigating in the UK and its chilling effect on eligible investors. Those cases are set for trial in October 2020. Organizers expect the defendants to argue the repose period expires in September and/or October 2020, before the trials. Therefore, investors who have not previously joined efforts cannot wait for the results of the trials before deciding whether to pursue their own claims. Instead, they must take steps now to preserve claims before they legally expire.

If the plaintiffs prevail at trial or settle, the hope is this will bolster the claimants’ prospects for recovery as Tesco will presumably want to resolve things rather than face new rounds of litigation. If the plaintiffs fail to recover, this will re-enforce a decision not to take further action. Unlike Danske, this final push is more than a typical ‘clean-up’ effort. It involves preserving optionality while events unfold that should impact the prospects for recovery.

NEXT STEPS

FRT has prepared detailed materials outlining your remaining options and the registration requirements for both matters. We can assist you in registering for them. Now is the time to act as we do not expect future opportunities.

Please contact your FRT Representative or email us to arrange a call with the FRT team.

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To learn more about how FRT can help your firm maximize recoveries in shareholder class action settlements, contact us at learnmore@frtservices.com.

• [Webinar] Understanding Shareholder Loss Estimates in Non-U.S. Jurisdictions
• [Report] A Primer on Global Group Litigation
• [Blog] 5 Ways Loss Estimation Comes Into Play in Non-U.S. Securities Litigation
• [Blog] Webinar Replay: Lessons Learned from Recent Shareholder Litigation Cases Outside the United States
• [Blog] FRT FAQs: Passive Group Litigation
• [Blog] Part 1: Three reasons why firms are implementing a shareholder litigation policy

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