It has been a rather quiet few weeks and we’ve received several inquiries as to the status of the Class Action suit and the proposed settlement. In addition, you may have noticed several news items this week which mention negotiations with the junior shareholders.
Here is what we can report after checking in with Blum Collins and reviewing the recent articles:
- Back in November, at the initial hearing for the Court to consider the Class settlement and approve the Notice to the Class, Judge Montali asked that the Notice be reviewed by the parties and edited for completeness and clarity, based on comments that were made at the hearing. At that time the parties anticipated that it would take only a few days to submit a revised Notice.
- In the meantime, the Heller Ehrman estate has been in negotiations with the shareholders to settle the estate’s claims against shareholders. Shortly after the November hearing, Judge Newsome, who is handling the mediation with the shareholders, asked Judge Montali to delay any decision on the proposed Plan of Reorganization and Disclosure Statement while settlement discussions continued. Judge Montali agreed and postponed indefinitely any further action on the Plan. Because adoption of the Plan was an integral part of the Class settlement, that made it necessary to address the delay in the Plan in the context of timing of approval of the settlement and payments to be made under the settlement.
- It appears that a settlement has been reached with a large group of junior shareholders, while negotiations continue with the higher income Heller Ehrman shareholders.
- While we had hoped we would see a partial payment of the settlement amounts by early January, the process is delayed because funding of those payments comes in part from the settlement with the shareholders. The Blum Collins lawyers have asked for a deadline for payment of priority claims, and the response has been encouraging but the Heller Ehrman estate is waiting for more definitive progress in the negotiations with the shareholders before agreeing.
- The review process and the changes in the proposed settlement to accommodate the delay in approval of a Plan are not expected to result in any substantive changes in the terms of the settlement reached on behalf of the class members by Blum Collins. Put another way, the benefits the class members will receive will not change but the procedures for and timing of payment has been modified because Plan approval has been delayed. The delay results from the decisions of Judge Newsome and Judge Montali to try to get a better Plan in place and the fact that funding of the settlement depends on funding of a Plan.
- The next step is to go back to Judge Montali to gain preliminary approval of the settlement and approval of Notice to the Class. The only thing that is delaying that process now is hearing from the estate regarding a deadline for funding the settlement. Judge Montali’s approval of the Notice to the class will start the process for class members to review the terms of the final settlement and decide whether accept the settlement or to opt out and pursue their claims individually. Based on the report from Blum Collins lawyers, we continue to believe that the terms of the settlement, while not perfect, are much better than we could have done without the extra clout of having filed a class action.
- Several of you have asked on the blog whether or not employees other than Blum Collins clients will get the benefit of the settlement. The answer is that all employees, even those who did not file an individual proof of claim, will be entitled to participate in the settlement. The Notice to the class, once approved by Judge Montali, will spell out these and other details.
That’s all we can report right now. If there is any breaking news, be sure that Heller Highwater will report it.
We may not have word on any activities until after the first of the year. Until then have a happy holiday!
© 2009, copyright Thomas MacEntee