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November 4, 1996


The opinion of the court was delivered by: POLLACK


 A final judgment was entered in this settlement class action by this Court on July 17, 1992, approving a settlement. On July 27, 1995, a member of said class, TLC Beatrice International Holdings, Inc. ("Beatrice"), sought intervention in said suit as of right under Rule 24(a). Fed. R. Civ. P., and for relief under Rule 60(b) from said final judgment. This Court denied the motion to intervene outright, without opinion, and denied the motion under Rule 60(b) as moot. On appeal from said denials, the Court of Appeals found that the district court was in error with regard to mootness, and believing that the appellate court would benefit from the views of the district court on the merits of the motions, remanded the judgment to the district court on the issues of the timeliness of the motion to intervene and the adequacy of notice to Beatrice of the class action. The appellate court further expressed hesitancy to address the important issue of so-called settlement class action without knowing the views of the district court, which was deeply involved in both the Milken Global Settlement and the bringing and settlement of the Global Class Action (the instant suit). The remand stipulated that "to the extent practicable, any subsequent appeal should be referred to [the same panel]."

 After hearing argument of counsel, the Court announced its decision to deny the motions and sets forth herein its Findings of Fact and Conclusions of Law in connection with said decision on the matters involved.


 Presidential Life

 1. On July 27, 1995, TLC Beatrice International Holdings, Inc. ("TLC") moved to intervene and for relief from the Judgment in this action ("Presidential Life ") pursuant to Federal Rules of Civil Procedure 24 and 60(b) (the "Intervention Motion" and the "Rule 60(b) Motion," respectively).

 2. Presidential Life was a securities class action certified pursuant to Federal Rule of Civil Procedure 23(b)(3). The representative plaintiff in that suit alleged in its Class Action Complaint dated February 14, 1992, and subsequently in its Amended Class Action Complaint dated July 9, 1992 (the "Complaint") that hundreds of individual and partnership defendants (including Carlton), all of whom were related to The Drexel Burnham Lambert Group, Inc. and/or its subsidiaries ("Drexel"), had conspired to violate, inter alia, various provisions of the federal securities and antitrust laws and had manipulated the prices of securities in the market for high yield bonds. The representative plaintiff also alleged that as a result of transactions involving securities underwritten, marketed, distributed or sold by Drexel, it and other similarly situated individuals and entities were damaged as a result of the defendants' alleged wrongdoing. The Court had subject matter jurisdiction over the claims asserted therein.

 3. This Court certified a class of plaintiffs in Presidential Life "consisting of all persons acting in their own capacity, derivatively, or in a representative capacity, directly or indirectly, having actual or potential claims of whatever kind or nature, which have not previously been asserted against any of the Settling Defendants prior to February 4, 1992, arising out of activities from January 1, 1978 through December 31, 1991 (the 'Global Class Period') relating to" certain aspects of Drexel's business. Order and Final Judgment of Dismissal of Global Class Action, Including Permanent Injunctions, dated July 17, 1992, P 3. TLC is a member of the Presidential Life class.


 4. Presidential Life was an important link in a series of settlements which provided very material benefits to Drexel's bankruptcy estate and its plan of reorganization.

 5. The first related settlement was the Securities Litigation Claims Settlement Agreement of May 3, 1991 (the "Claims Agreement") which resolved the billions of dollars of claims filed by securities litigation claimants in Drexel's bankruptcy proceedings, captioned In re The Drexel Burnham Lambert Group Inc., et al., Case No. 90 Civ. 6954 (MP), Chapter 11 Case No. 90-B-10421 (FGC). Absent the Claims Agreement, it is likely that there would have been a Chapter 7 liquidation to the detriment of all of Drexel's creditors. The Claims Agreement was incorporated in, and enabled Drexel to reorganize and emerge from bankruptcy pursuant to, the Drexel Second Amended Joint Plan of Reorganization, dated March 5, 1992 (the "plan of reorganization").

 6. The Claims Agreement and the related plan of reorganization, among other things, contemplated:

a. That the claims of Drexel and the claims of certain of the securities litigants would be pooled together (the "Pooled Claims"), that control of the Pooled Claims would be vested in the participating securities litigants (the "Pool Administrators") and that the non-securities litigant creditors of Drexel would receive 14% of any recoveries on the Pooled Claims; and
b. That any individual or entity settling with the Pool Administrators prior to the confirmation of the Drexel plan of reorganization would receive the benefit of certain injunctions and releases if the District Court found that the settlement "provided a material benefit to the Debtors' estates and to consummation of the Plan." Such individuals or entities were defined in the Drexel plan of reorganization as Identified Settling Parties.

 7. Prior to the filing of Presidential Life, over 180 civil actions had been brought against some or all of Drexel, Michael Milken and the hundreds of other Presidential Life defendants concerning purportedly improper conduct, undertaken primarily in the 1980's, related to Drexel's operations ("Drexel-related conduct" and "Drexel-related claims"). *fn1"

 8. One such action that was instituted pursuant to the pooling arrangements was a civil suit brought by Drexel against Michael Milken and other defendants, Drexel Burnham Lambert, Inc. v. Milken, et al., 91 Civ. 6108 (MP) (S.D.N.Y.). The filing of this action, in particular, was a catalyst for the settlements that would follow.

 9. After extensive and extremely hard-fought negotiations in which all interested parties were represented, the parties to the civil actions executed a stipulation of settlement dated as of March 9, 1992, setting forth the terms of a proposed comprehensive settlement resolving claims against each of the hundreds of Settling Defendants *fn2" (the "Milken Global Settlement"). The Milken Global Settlement provided for a $ 1.3 billion settlement fund, with $ 1.2 billion to be paid over time by the Settling Defendants and an additional $ 100 million to be paid in connection with various insurance settlements. The Milken Global Settlement also provided for a $ 50 million indemnity fund to address any Drexel-related liabilities of the Settling Defendants that would survive the Milken Global Settlement (the "Indemnity Fund"). After notice of the proposed settlement was provided to all of the claimants in Drexel's bankruptcy, this Court entered an order on March 9, 1992 approving the Milken Global Settlement.

 10. There were a number of conditions to the effectiveness of the Milken Global Settlement. One such condition was that this Court's order approving the settlement of Presidential Life -- an action brought on behalf of those persons who had Drexel-related claims against the Settling Defendants that had not been asserted previously in any existing action -- had to become final. A second condition was that the Milken Global Settlement afforded the Settling Defendants an unqualified right to terminate the Milken Global Settlement if they determined in good faith that the value of the claims against them that would survive the Milken Global Settlement -- i.e., the Presidential Life opt outs' claims -- posed an unacceptable financial risk given the $ 50 million allocated to the Indemnity Fund (the "Termination Provision").

 11. The Milken Global Settlement refers specifically to: (1) the existence of Presidential Life ; (2) the Settling Defendants' desire to resolve all unasserted claims against them arising out of Drexel-related conduct; and (3) the Presidential Life class members' right to opt out of the settlement.

 12. The Milken Global Settlement ultimately became effective on September 29, 1993. Prior to its becoming effective, class counsel, counsel to the Settling Defendants and counsel to Drexel, sometimes with the Court's assistance, communicated with the Presidential Life opt outs in an attempt to resolve their claims. After the conclusion of this process, the defendants waived their rights under the Termination Provision.

 13. The Court found that the Milken Global Settlement provided a material benefit to Drexel's estate, facilitating Drexel's reorganization, and, therefore, that the Settling Defendants qualified as Identified Settling Parties under Drexel's plan of reorganization, because:

a. Pursuant to the pooling arrangement in the plan of reorganization, Drexel's Fixed Creditors received more than $ 84 million (less certain expenses which under the terms of the plan of reorganization were to be deducted);
b. More than $ 600 million in claims filed against Drexel were released;
c. Potentially significant contribution and indemnity claims filed against Drexel were released;
d. Claims against settling partnerships -- including Carlton -- in which Drexel had an interest were released, which removed a significant obstacle to Drexel realizing on its interest in those partnerships, which had a value of well over $ 200 million;
e. Implementation of the Employee ERISA Compensation Claims settlement, which was an integral part of the plan of reorganization, was facilitated by the release by Michael and Lowell Milken of their Class 6 Claims under the plan of reorganization; and
f. By settling Drexel litigations involving bonuses, partnership investments by former employees and claims against Michael Milken, significant time-consuming burdens were removed from employees of the Trust that was created under Drexel's plan of reorganization.

 The Presidential Life Settlement

 14. When the Presidential Life complaint was filed, it was anticipated that that action would be settled.

 15. The parties to Presidential Life entered into a stipulation of settlement dated March 11, 1992 (the "Presidential Life Stipulation") to resolve the claims therein. The Presidential Life Stipulation provided for a $ 50 million recovery for the plaintiff class.

 16. Class counsel supervised a notice program of unprecedented extent in Presidential Life that fully complied with and exceeded all applicable requirements of Rule 23(c)(2) and due process. As this Court found previously, the notice of the proposed settlement afforded to class members was fully adequate to apprise them of their rights in connection therewith, as demonstrated by:

. The mailing of more than 42,000 notices to identifiable class members, based on Drexel's transactional records; and
. The publication of a detailed notice in 201 publications, including 153 domestic publications and 48 foreign publications, on two separate occasions.

 17. Over 4,000 notices were mailed to individuals and entities that requested individual notices after learning of the settlement through the notice program. The effectiveness of the notice program is further illustrated by the 4,778 proofs of claim that were ultimately filed.

 18. Given that the allegations in the Presidential Life Complaint focused exclusively on Drexel-related conduct and the large number of notices being mailed, it was appropriate and reasonable to use the addresses contained in Drexel's transactional records. Given the volume of notices being mailed, it was not feasible to attempt to re-verify whether any particular one of the over 40,000 addresses had been changed, or otherwise to obtain address information, by canvassing the hundreds of defendants for such information as to each of the intended recipients of the notice.

 19. The period during which class members could opt out expired on June 24, 1992. Nearly two hundred class members opted out from the Presidential Life settlement. TLC did not opt out.

 20. This Court conducted a fairness hearing on July 14, 1992. At that hearing, the Court addressed objections raising certain of the same issues raised by TLC here, including objections relating to the reasonableness of the size of the Presidential Life settlement fund in relation to the Settling Defendants' assets *fn3" and class counsel's ability to represent adequately both the Presidential Life class and its clients with Drexel-related claims being resolved in other litigations. TLC did not appear at that hearing or otherwise raise any objection to the settlement at that time.

 21. On July 17, 1992, this Court entered its Order and Final Judgment of Dismissal of Global Class Action, Including Permanent Injunctions (the "Presidential Life Judgment") approving the settlement set forth in the Presidential Life Stipulation as fair, reasonable, and adequate. In addition to entering the Judgment, this Court made Findings of Facts and Conclusions of Law regarding the settlement, also dated July 17, 1992 (the "July 1992 Findings and Conclusions"). The July 1992 Findings and Conclusions are incorporated herein.

 22. In the July 1992 Findings and Conclusions, this Court determined that certification of the Presidential Life class (sometimes referred to as the "Global Class") was appropriate because the class satisfied each element of Federal Rule of Civil Procedure 23(a), including the Rule's requirements of adequate representation and typicality, as well as those of Federal Rule of Civil Procedure 23(b)(3).

 24. The Court carefully scrutinized the Presidential Life settlement, and was fully aware of its terms as well as the claims and defenses ...

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