Record Recoveries | Case Monitoring Service | Deciding to File Suit | Choosing a Law Firm | Selected Cases
Fighting for Financial Recovery
Institutional investors lose billions of dollars each year as a result of corporate self-dealing, mismanagement and fraud. Yet nearly half of the hundreds of class action suits filed each year are dismissed at the pleadings stage - and those that are not are typically resolved for less than ten cents on the dollar.
At G&E, we expect - and achieve - far better results. In our ten years representing institutional investors in over one hundred cases, we have never lost a corporate or securities case on a motion to dismiss. We pride ourselves on recoveries that far exceed the national average - and on the care and attention we devote to each case.
G&E Achieves Record Recoveries
G&E has represented the lead plaintiffs in six of the top post-PSLRA securities litigation settlements.
- $2.975+ billion settlement from Tyco International
- $440+ million settlement from Global Crossing Ltd.
- $300+ million recovery from Oxford Health Plans
- $300+ million settlement from DaimlerChrysler Corporation
- $275+ million judgement & settlement from Safety-Kleen
- $170+ million settlement from Dollar General Corporation
Other significant recoveries have included:
- $450 million recovery from Royal Dutch Shell in a historic, Pan-European settlement led by over 50 institutional investors
- $3.19 billion increase in cash consideration for Caremark shareholders in the CVS acquisition
- 13% increase in value per share - $48 million total - for Medco shareholders in the King Pharmaceuticals merger
- 35 cents on the dollar for institutional investor bondholders who received almost nothing in Styling Technology's bankruptcy
Case Monitoring Service Alerts Clients to Potential Recoveries
At no cost to our clients, G&E monitors new and potential litigation in the areas of shareholder derivative actions and federal securities fraud litigation. We monitor pending cases, as well as the financial and business news that may ultimately result in private litigation or claims by federal or state regulators.
G&E's Case Monitoring Service allows institutional investor clients to become aware at an early stage of any litigation or potential litigation that may impact their investments. Working from databases of stocks, bonds and other investments in our clients' portfolios, we inform them of existing and potential litigation related to those investments.
Through this service, G&E helps clients identify situations where they could recover losses through individual legal action or participation in a new or existing class action.
Making the Decision to File Suit
G&E, and our clients, have a lot at stake: time, resources and reputation. So, before deciding to file a lawsuit, we vigorously research and analyze the case's potential. We shoot straight with our clients, laying out the pros and cons of litigation, to make sure that the risks are fully understood.
We recognize that the decision to seek a financial recovery or a change in corporate governance involves a complicated cost-benefit analysis for an institutional investor.
Our clients want to know:
- What is the probability of recovery?
- Would the amount recovered justify the time and aggravation involved in a lawsuit?
- Would a lawsuit negatively affect important relationships or our reputation?
- Would there be any lasting value to this litigation?
At G&E, we ask ourselves the very same questions - and more:
- Would this case justify the economic investment of both counsel and client?
- Would this case help to shape the law?
- Would it advance the cause of the institutional investor community?
We encourage prospective clients to ask some pointed questions before choosing a law firm to represent their interests:
- Does your firm focus primarily on institutional investors?
- What have you done to advance the institutional investor agenda?
- Are you willing, and do you have the ability, to take a case all the way through trial?
- How many of your cases have been dismissed?
- How much are you willing to advance in up-front litigation costs?
- What is your average rate of recovery?
- What percentage of partners' time will be spent on my case?
- How many lawyers will be assigned to my case? What is their experience?
Click here for profiles of some of G&E's more notable cases:
- In re: Tyco International
- In re: Global Crossing, Ltd. Securities and "ERISA" Litigation
- In re: DaimlerChrysler AG Securities Litigation
- In re: Oxford Health Plans, Inc., Securities Litigation
- CellStar Corp. v. Gluck
In re: Tyco International
CLIENTS: Teachers Retirement System of Louisiana and the Louisiana State Employees’ Retirement System
TYPE OF CASE: Securities Class Action
SUMMARY:
Grant & Eisenhofer was appointed as a lead counsel in the high profile securities class action pending against Tyco International, Dennis Kozlowski and other former executives and directors of Tyco, and PricewaterhouseCoopers, Tyco’s former auditor. G&E’s clients, the Teachers Retirement System of Louisiana and the Louisiana State Employees’ Retirement System are lead plaintiffs in the action. On January 28, 2003, Lead Plaintiffs filed a 330 page Consolidated Securities Class Action Complaint (the “Complaint”) alleging that Defendants published financial statements during the Class Period (December 13, 1999 and June 7, 2002) that were materially false and misleading because, among other reasons, Tyco manipulated its financials in connection with hundreds of acquisitions the Company made during the Class Period and because senior management was looting the Company’s coffers: The Complaint further alleges that PwC was aware of the fraudulent accounting at Tyco and management’s lack of integrity and that PwC failed to take the appropriate steps to investigate the fraud. The Complaint alleges that PwC falsely stated that Tyco’s financial statements were proposed in accordance with Generally Accepted Accounting Principles and that PwC had conducted its audit according to Generally Accepted Accounting Standards.
On June 12, 2006, the Court entered an order certifying this Action as a class action on behalf of a class defined as follows: "All persons and entities who purchased or otherwise acquired Tyco securities between December 13, 1999 and June 7, 2002, inclusive and who were damaged thereby, excluding defendants, all of the officers, directors and partners thereof, members of their immediate families and their legal representatives, heirs, successors or assigns, and any entity in which any of the foregoing have or had a controlling interest."
On May 15, 2007, Tyco International entered into a preliminary settlement agreement and has agreed to fund $2.975 billion to settle the securities and accounting fraud claims. The settlement specifically excludes Tyco’s former auditor PricewaterhouseCoopers.
On July 6, 2007, PricewaterhouseCoopers ("PwC") agreed to pay $225 million to settle securities and accounting fraud claims relating to the Tyco securities class action. This settlement with PwC, combined with the recent settlement with Tyco, will bring the total settlement to more than $3.2 billion by the time it is presented to the court for final distribution. For more information on the Tyco settlement, click here.
In re: Global Crossing, Ltd. Securities and "ERISA" Litigation
CLIENTS: Ohio Public Employees Retirement System and Ohio State Teachers Retirement System
TYPE OF CASE: Securities Class Action
SUMMARY:
This case is pending in the federal court for the Southern District of New York. Grant & Eisenhofer is lead counsel for the plaintiff class. On January 28, 2003, the Consolidated Class Action Complaint was filed. The Complaint asserts federal securities claims on behalf of all purchasers of Global Crossing securities between February 1, 1999 and January 28, 2002 against various defendants, including current and former officers and directors of Global Crossing, Arthur Andersen, Salomon Smith Barney and other financial institutions.
On August 11, 2003, an Amended Consolidated Class Action Complaint was filed for the purpose of asserting federal securities claims on behalf of all purchasers of Asia Global Crossing securities between October 6, 2000 and November 17, 2002 against various defendants, including current and former officers and directors of Asia Global Crossing, Arthur Andersen, Salomon Smith Barney and other financial institutions.
On November 10, 2004, the Court approved a settlement with the Global Crossing-related defendants, including Gary Winnick, and Simpson Thacher & Bartlett, Global Crossing's former outside counsel. The value of the settlement is approximately $245 million (subject to fluctuations in the US dollar/UK pounds exchange rate).
On July 8, 2005, the Court approved a $75 million settlement between the plaintiffs and Citigroup-related defendants (Salomon Smith Barney and Jack Grubman) was announced. Information concerning the settlement and the Proof of Claim form are available at www.globalcrossinglitigation.com.
On October 27, 2005, the Court approved a $25 million settlement with Arthur Andersen LLP and all Andersen-related defendants. On October 27, 2006, the Court approved a $99 million settlement with various financial institutions including Goldman Sachs, Merrill Lynch, JP Morgan, CIBC and others. CIBC is paying $16.5 million toward the settlement. The remaining $82.5 million is being paid by the other settling financial institutions.
On May 30, 2007, the Court preliminarily approved a $3.8 million settlement with Microsoft and Softbank. The Fairness Hearing is scheduled for September 27, 2007 at 4p.m. This partial settlement relates to only purchasers of Asia Global Crossing Securities. This settlement will conclude this class action.
In total, Grant & Eisenhofer has recovered $448 million for investors in this case. Further information about the settlement, including the Notice and Proof of Claim form, is available at www.globalcrossinglitigation.com
DISTRIBUTION OF THE PROCEEDS FROM THE PARTIAL SETTLEMENT DESCRIBED ABOVE WILL NOT OCCUR UNTIL LATE 2007 OR EARLY-2008 AT THE EARLIEST. PLEASE DO NOT CONTACT THE COURT ABOUT THE PAYMENT.
In re: DaimlerChrysler AG Securities Litigation
CLIENT: Florida State Board of Administration
TYPE OF CASE: Securities Class Action
SUMMARY:
This was a class action under Section 10(b) of the Securities Exchange Act of 1934. The class included former Chrysler shareholders who exchanged their shares for stock in the new DaimlerChrysler AG formed in the so-called "merger of equals" between Chrysler and Daimler-Benz, as well as shareholders who purchased DaimlerChrysler shares on the open market after the consummation of the merger. The class claimed that the Daimler defendants concealed their true intent to acquire Chrysler as a mere division of Daimler, depriving former Chrysler stockholders of a fair acquisition premium for their shares. Complaints were filed in November 2000, and the Florida State Board of Administration was appointed a co-Lead Plaintiff together with several smaller public funds, and G&E served as co-Lead Counsel for the class plaintiffs.
A consolidated complaint was filed in early 2001. After the defendants' motions to dismiss were denied in April 2002, intense discovery was undertaken. The plaintiffs obtained and reviewed more than 775,000 pages of documents, as well as 52 videotapes and 93 audiotapes, from the defendants and third parties. Discovery was hotly contested at every turn, with at least fifty-seven discovery-related motions being filed, resulting in twenty-one separate hearings. Thirty-six depositions were taken by the Plaintiffs and the Defendants throughout the United States, in Germany, and in England.
Plaintiffs prepared a number of expert reports and deposed the defendants' numerous experts. Plaintiffs fully prepared their pre-trial papers and exchanged those papers with the defendants. While pre-trial procedures were ongoing, the parties participated in a mediation, that resulted in the parties agreeing to settle the class case for a cash payment of $300 million. On February 5, 2004, the court granted final approval of the settlement, among the five largest securities class action settlements since the enactment of the PSLRA.
In re: Oxford Health Plans, Inc., Securities Litigation
CLIENT: Colorado Public Employees' Retirement Association
TYPE OF CASE: Securities Class Action
SUMMARY:
The Public Employees' Retirement Association of Colorado ("ColPERA") engaged G&E to represent it to seek the lead plaintiff designation in the numerous securities fraud actions relating to Oxford Health Plans, Inc., certain officers and directors, and its auditor, KPMG LLP. The court ordered the appointment of ColPERA as a co-lead plaintiff and G&E as a co-lead counsel.
G&E and its co-leads filed the Consolidated Amended Complaint on October 2, 1998, and subsequently defeated the defendants' motions to dismiss. Document discovery began in 1999 and, over 18 months, nearly 1.5 million pages of documents were produced. Deposition discovery commenced in 2000 and continued into 2002. The case was intensively litigated for more than three years, including the taking of more than 70 depositions by plaintiffs, the filing of ten expert reports (3 by plaintiffs and 7 by defendants), and the resolution of intensive discovery disputes.
After the completion of discovery, the plaintiffs defeated the defendants' summary judgment motions and fully prepared the case for trial. Only 2 days before the trial was to begin, and after jury selection had commenced, the case settled for $300 million, including a payment of $75 million by KPMG, placing it among the five largest settlements since the enactment of the PSLRA, and one of the largest settlements ever by an accounting firm.
CLIENT: State of Wisconsin Investment Board
TYPE OF CASE: Securities Class Action
SUMMARY:
In this, one of the earliest securities cases to require application of the lead plaintiff provisions in the Private Securities Litigation Reform Act of 1995 ("PSLRA"), the State of Wisconsin Investment Board ("SWIB") was designated lead plaintiff and G&E was appointed lead counsel. This opinion is widely considered the landmark on the standards applicable to lead plaintiff/lead counsel practice under the PSLRA. (See, especially, In re: Cendant Corp. Litig., 2001 WL 980469, at *40, *43 (3d Cir. Aug. 28, 2001), citing CellStar.)
In the complaint, the plaintiffs alleged that Cellstar had: used improper accounting practices to overstate its income from a foreign subsidiary; understated the expenses associated with certain retail outlets; and made false and misleading statements to the public which falsely portrayed Cellstar as an increasingly profitable company. G&E successfully defeated the majority of the defendants' motion to dismiss, and after a round of discovery was completed, the parties negotiated a $14.6 million settlement, coupled with undertakings by CellStar to make significant corporate governance changes.
With SWIB's active lead in the case, the class recovery was approximately 56% of the class' actual losses, four times the then historical 14% average gross recovery in securities fraud litigation. Because of the competitive process that SWIB had undertaken in the selection of counsel, resulting in a contingent fee percentage significantly less than the average then historical amount of 31%, the net recovery to the class was almost 50% of their actual losses, or almost five times the average net recovery.
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