Grant & Eisenhofer (G&E) represents European institutional investors in the recently announced Pan-European class action settlement with Royal Dutch Shell. If you are an institutional shareholder located outside of the U.S. that purchased shares of Royal Dutch Petroleum or Shell Transport & Trading on a non-U.S. exchange from 08 April 1999 to 18 March 2004, you may be eligible to join the petitioning institutional shareholders for settlement purposes.
Complete settlement information is available on this site to registered visitors. If you have questions or would like to participate in the settlement, please contact:
GEOFFREY C. JARVIS, Director
GRANT & EISENHOFER P.A.
1201 N. Market Street, Suite 2100
Wilmngton, DE 19801
+1 302.622.7040 - Direct Dial
+1 302.622.7100 - Facsimile
firstname.lastname@example.org - Email
Grant & Eisenhofer (G&E) represents European institutional investors in the recently announced Pan-European class action settlement with Royal Dutch Shell. This settlement relates to Shell’s misrepresentations concerning its “proved” oil and gas reserves between 1999 and early 2004, and was reached after several months of negotiations.
The value of this settlement is approximately $450 million, which includes $352.6 million in cash paid from Shell and an expected payment to non-U.S. shareholders of an additional $96 million out of a $120 million fine Shell paid to the U.S. Securities and Exchange Commission. In addition, as part of the agreement, Shell is paying all fees and costs associated with the settlement separate and apart from the settlement proceeds. Those costs result in an actual settlement value in excess of $500 million.
The parties to the settlement agreement include the Shell Reserves Compensation Foundation; the Vereniging van Effectenbezitters (VEB), an organization representing individual shareholders in The Netherlands; and institutional investors, including ABP and PGGM.
A copy of the settlement agreement is available to registered users of this web page.
If approved, this settlement will be payable to all non-U.S. shareholders who purchased Shell stock between 08 April 1999 and 18 March 2004. (At the time, Shell traded as two stocks: Shell Transport & Trading and Royal Dutch Petroleum.) U.S. investors are excluded from this settlement because there is a pending class action in the U.S. that covers those investors. The U.S. class action also purports to cover non-U.S. investors, but there is a good chance that the U.S. court will exclude the claims of non-U.S. investors on the grounds that it cannot exercise jurisdiction over foreign investors.
If the U.S. court retains jurisdiction over the non-U.S. investors, the Pan-European settlement will be terminated. However, if the U.S. court does not retain jurisdiction, this settlement provides the only real option for non-U.S. investors to receive compensation.
This agreement was reached in The Netherlands, the only country in Europe that provides for the approval of class action settlements. It is also where Shell’s headquarters are located. Pursuant to Dutch law, the Amsterdam Court of Appeals may approve this settlement on a class-wide basis if it finds the settlement to be reasonable.
Dutch law does not allow aggrieved individuals to petition the court for a class-wide settlement. Instead, the power to petition the Court to approve a class-wide settlement can only be done through the creation of a special purpose legal entity – a foundation or association. The Shell Reserves Compensation Foundation has been formed to represent qualified shareholders in this settlement.
It is beneficial to broaden the Foundation’s membership to show the Amsterdam Court of Appeals that the Foundation is representative of the majority of Shell’s shareholders.
This novel, groundbreaking settlement is an opportunity for non-U.S. institutional investors to resolve a dispute without resorting to litigation. It is appropriate that this settlement takes place in Europe rather than the U.S. as over 80% of Shell’s stock was traded on European exchanges, its large shareholders are primarily located in Europe, and none of the alleged fraudulent activity occurred in the U.S.
Shell is very supportive of this settlement and hopes that its support of this settlement increases its goodwill with its shareholders. Shell has already made various corporate governance changes in response to the alleged fraudulent activity.
By becoming a Participant in the Shell Reserves Compensation Foundation, investors will show support for this settlement, which is good for all non-U.S. investors because it provides the only opportunity to receive compensation. Having a large number of shareholders in various countries represented among the Foundation’s Participants will demonstrate to the Dutch Court of Appeals the broad support for this settlement among Shell’s stockholders, and will help to ensure that the Dutch Court of Appeals will approve this settlement.
Additional benefits are that the participants are part of a novel, progressive concept of settling disputes of corporate wrongdoing, and they will have direct access to the status of the settlement and claims administration.
For non-U.S. shareholders who also purchased Shell securities in the U.S., those purchases would remain unaffected by this settlement. If there is a settlement in the U.S. concerning U.S.-purchased securities, non-U.S. investors should be able to participate in that settlement as well.
Note that by becoming a Participant, an institution does not become a party to any settlement or any litigation.
The Shell Reserves Compensation Foundation (the Foundation) is a settlement foundation representing all shareholders covered by the settlement agreement. The Foundation’s participants, that are all fully supporting the settlement agreement, include over 50 European-based institutional investors (including ABP, PGGM, DEKA, Norges, UBS and Morley) as well as organizations representing individual shareholders from France, Germany, Italy, Sweden and The Netherlands
The Shell Reserves Compensation Foundation is governed by an independent Board. The members are:
M.J.G.C. (Theo) Raaijmakers (Chairman)
Former Legal Advisor to Royal Philips and Executive Vice President of Philips International. At present professor of corporate law at Tilburg University.
Professor M.J. (Maarten) Kroeze (Secretary)
Professor of corporate law at Erasmus University Rotterdam and a board member of the Dutch Association of Corporate Litigation and chief editor of the legal journal Ondernemingsrecht.
Drs. G. (Gilles) Izeboud, RA (Treasurer)
Former partner of a large, international accounting firm, supervisory director of various internationally operating Dutch companies and substitute member of the Ondernemingskamer (Enterprise Chamber) of the Amsterdam Court of Appeals.
Counsel for the Shell Reserves Compensation Foundation:
Jay W. Eisenhofer, Esq.
Grant & Eisenhofer P.A.
1201 N. Market Street
Wilmington, DE 19801
Jurjen H. Lemstra
Pels Rijcken & Droogleever Fortuijn N.V.
Koningin Julianaplein 10
P.O. Box 11756
2502 AT The Hague