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TEACHERS' RETIREMENT SYSTEM OF LOUISIANA v. A.C.L.N.

United States District Court, S.D. New York


May 14, 2004.

TEACHERS' RETIREMENT SYSTEM OF LOUISIANA, individually and on behalf of itself and all others similarly situated, Plaintiff, -v.- A.C.L.N., LIMITED, JOSEPH J.H. BISSCHOPS, ALDO LABIAD A/K/A ABDERRAZAK LABIADH, ALEX DE RIDDER, CHRISTIAN L. PAYNE, MICHAEL S. DOHERTY, EARL GOULD, CHARLES L. BROCK, MARINA SAVVA, YIANNAKIS ECONOMIDES, EDO INTERNATIONAL, EDO INTERNATIONAL ACCOUNTANTS & CONSULTANTS (CYPRUS), EDO SEIDMAN, LLP, and EDO INTERNATIONAL B.V., Defendants

The opinion of the court was delivered by: MILTON POLLACK, Senior District Judge

Partial Settlement Pursuant to Rule 23(e)

DECISION

On January 23, 2004, Lead Plaintiff, acting on behalf of itself and the Class, entered into a Stipulation and Agreement of Settlement (the "Settlement Stipulation") with A.C.L.N, Limited ("ACLN" or the "Company"), and certain of ACLN's officers and directors, namely Aldo Labiad a/k/a Abderrazak Labaidh, Christian L. Payne, Michael S. Doherty, Earl Gould and Charles L. Brock (collectively the "Settling Defendants"). The claims against defendants Joseph J.H. Bisschops (ACLN's chairman and managing director), Alex de Ridder (ACLN's Chief Operating Officer and Chief Financial Officer), and directors Marina Savva and Yiannakis Economides will be released. Not covered by the Settlement are defendants BDO International, BDO International Accountants & Consultants (Cyprus) ("BDO-Cyprus"), BDO Seidman, LLP ("Seidman"), and BDO International B.V. ("BDO B.V."). Plaintiffs' Counsel are continuing to prosecute the Action against these latter defendants, collectively referred to herein as the "BDO Entities."

  The Settlement Stipulation is now before the Court pursuant to Rule 23(e) of the Federal Rules of Civil Procedure, after reasonable notice to all members of the Class, for a determination, after a hearing, that the Settlement is fair, reasonable, and adequate, and incident thereto, for the allowance of counsel fees and expenses and the establishment of a litigation fund to pay additional costs incurred in the continuing prosecution of the Action against the BDO Entities not part of the Settlement.

  The Settlement provides for the payment of $5.5 million in cash plus accrued interest thereon, less certain amounts. The $5.5 million is being maintained in an escrow account (the "Escrow Account") and is earning interest for the benefit of the Class. The money comes from ACLN's $10 million Directors and Officers ("D&O") insurance policy.

  Additional consideration for the Settlement is the agreement of the Settling Defendants to cooperate with Lead Counsel in the continuing prosecution of the Action against the BDO Entities. Finally, in conjunction with the settlement negotiations, Lead Counsel has agreed with the SEC to jointly develop a plan of allocation for the Net Settlement Fund in the Action and any recovery the SEC may obtain in its action against ACLN. The plan provides for a joint distribution of the funds through one claims administrator.

 I. The Settlement

  The standards governing approval of class action settlements are well-established in this Circuit. In evaluating a proposed settlement under Fed R. Civ. P. 23(e), the Court must determine whether the settlement, taken as a whole, is fair, reasonable, and adequate. Maywell v. Parker & Parsley Petroleum Co. 67 F.3d 1072, 1079 (2d Cir. 1995). A proposed class action settlement enjoys a strong presumption that it is fair, reasonable, and adequate if, as here, it was the product of arm's length negotiations conducted by capable counsel experienced in class action litigation arising under the federal securities laws, and if it occurred after meaningful discovery. See, e.g. In re PaineWebber Ltd. P'ships Litig. 171 F.R.D. 104, 124(S.D.N.Y. 1997),aff'd, 117 F.3d 721 (2d Cir. 1997): New York & Maryland v. Nintendo of Am. Inc. 775 F. Supp. 676, 680-81 (S.D.N.Y. 1991): see also Manual for Complex Litigation. Fourth $21.612 (2004) ("Extended litigation between or among adversaries might bolster confidence that the settlement negotiations were at arm's length.")

  In City of Detroit v. Grinnell Corp. 495 F.2d 448 (2d Cir. 1974) ("Grinnell"), the Second Circuit provided a nonexhaustive list of factors to consider in reviewing a settlement proposal:

(1) the complexity, expense and likely duration of the litigation . . .; (2) the reaction of the class to the settlement. . . .; (3) the stage of the proceedings and the amount of discovery completed . . .; (4) the risks of establishing liability . . .; (5) the risks of establishing damages . . .; (6) the risks of maintaining the class action through the trial . . .; (7) the ability of the defendants to withstand a greater judgment . . .; (8) the range of reasonableness of the settlement fund in light of the best possible recovery . . .; [and] (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation. . . .
495 F.2d at 463 (citations omitted); See also In re Sumitomo Copper Litig., 189 F.R.D. 274, 281-84 (S.D.N.Y. 1999) (following and applying Grinell factors).

  The proposed Settlement is fair, reasonable, and adequate when measured under the foregoing criteria.

 A. The Complexity. Expense and Likely Duration of the Litigation

  Many of the defendants, witnesses and documents are beyond the subpoena power of the Court and many relevant documents have been seized by foreign government authorities and may not be available. The number of defendants with divergent interests is also a factor. Because of the Private Security Litigation Reform Act of 1995 ("PSLRA")'s provision for proportional fault, even as to the Settling Defendants, it was expected that they would present their own "unique" defenses and experts in support thereof.

  While the Action proceeds against the BDO Entities, there would, absent the proposed Settlement, be significant additional resources needed to prosecute the claims against the Settling Defendants throughout the completion of expert discovery, summary judgment motions, the completion of pretrial and trial proceedings, and the post-trial motions and appeals they might file. Moreover, any appeals would substantially delay any payment to Class Members, even if Lead Plaintiff were to prevail.

 B. The Reaction of the Class to the Settlement

  Pursuant to this Court's Order,*fn1 a printed Notice of Pendency of Class Action, Hearing on Partial Settlement and Attorneys' Fee Petition and Right to Share in Settlement Fund (the "Notice"), in form approved by the Court, was mailed to more than 15,000 potential Class Members beginning on March 15, 2004, and a Summary Notice of Pendency of Class Action, Proposed Partial Settlement and Settlement Hearing (the "Publication Notice"), in form approved by the Court, was published in the national edition of The Wall Street Journal on March 25, 2004. The Notice contained a detailed description of the nature and procedural history of the Action, the terms of the Settlement, the average recovery per share and the claims that will be released in the Settlement, and Lead Counsel's fee and expense application. The Notice also advised Class Members of their right to object to the Settlement, and/or the fee and expense application, or to opt out of the Class by no later than April 30, 2004.

  No Class Member has filed an objection to the proposed Settlement and only eleven persons have requested to be and are opted out of the Class. These persons are as follows: Mary Arena; Richard W. Burg; David Freeman; the Freeman Family Partnership, A Texas Limited Partnership composed of David R. Freeman and Margaret Freeman; William Massatis; Thomas S. Pratt; Christopher Scott; Cordia V. Scott; Douglas P. Scott; Jo Ann W. Scott; and Morris Smith.

  The overwhelmingly positive reaction of the Class to the proposed Settlement supports its approval by the Court. See Grinnell, 495 F.2d at 462 (approving settlement where only 20 objectors appeared from group of 14,156 claimants).

 C. The Stage of the Proceedings and the Amount of Discovery Completed

  To approve a proposed settlement "the Court need not find that the parties have engaged in extensive discovery." In re Austrian & German Bank Holocaust Litig., 80 F. Supp.2d 164, 176 (S.D.N.Y. 2000) (citing Plummer v. Chem. Bank, 608 F.2d 654 (2d Cir. 1982)). "Instead, it is enough for the parties to have engaged in sufficient investigation of the facts to enable the Court to `intelligently make. . . an appraisal' of the Settlement." Holocaust Litig., Id.

  This threshold was easily met here. Prior to executing the Stipulation, Lead Counsel investigated the events and transactions alleged in the Action, reviewed and analyzed enormous numbers of documents produced by the Settling Defendants and others, and retained and consulted with expert witnesses in damages and forensic accounting. See Berger Decl. ¶¶ 9, 25, 29, 36-38, 42-44. Lead Plaintiff had a wealth of information at its disposal gleaned from more than two years of investigation and litigation before entering into the Settlement Stipulation. Lead Plaintiff and Lead Counsel engaged in sufficient document discovery and sufficient discussions about the merits of the Action to fully evaluate the merits of the claims and the obstacles to success. Thus the parties "have a clear view of the strengths and weaknesses of their cases." In re Warner Communications Sec. Litig., 618 F. Supp. 735, 745 (S.D.N.Y. 1985) aff'd, 798 F.2d 35 (2d Cir. 1986).

 D. The Risks of Establishing Liability, Damages, and in Maintaining the Class Action Through the Trial

  Grinnell holds that in assessing the fairness, reasonableness, and adequacy of a settlement, courts should consider such factors as the "risks of establishing liability," "the risks of establishing damages," and "the risks of maintaining the class action throughout the trial." Grinnell, 495 F.2d at 463 (citations omitted). Little about litigation is risk-free, and class actions confront even more substantial risks than other forms of litigation.

  The risks to establishing the Settling Defendants' liability were augmented by the fact that ACLN is a foreign company; many of the Company's records which were located abroad had been seized by various government and regulatory agencies and thus availability was doubtful. Moreover, virtually all potential witnesses with knowledge as to ACLN's operations, as well as many of the named ACLN Defendants, are foreigners and are beyond the subpoena power of the Court. While the Settling Defendants would have been able to call live witnesses in support of their position, Plaintiffs would have been forced to rely primarily on videotaped deposition testimony of defendants and third parties to prove their case.

  In addition to the risks unique to the Action, Lead Plaintiff also faced significant risks in establishing damages. Experts could be expected on each side to present sophisticated analyses and methods for calculating damages, and it is impossible to predict with certainty which testimony or method might be accepted by a jury. Paine Webber Ltd. P'ships Litig., 171 F.R.D. at 129 ("[D]amages are a matter for the jury, whose determinations can never be predicted with certainty"). There was thus considerable risk that a jury might disagree with Lead Plaintiff's analysis. E. Collectability and the Ability of the Defendants to Withstand a Greater Judgment

  The proposed Settlement is for an amount significantly less than the damages Lead Plaintiff and Lead Counsel believe would be attributable to the Settling Defendants. Berger Decl. Exhibit A, Reeves Decl. ¶ 14. Nevertheless, the Settlement is an excellent result under the circumstances.

  The overriding consideration driving the settlement negotiations was the inability of the Settling Defendants to contribute in any meaningful way to a recovery by the Class. The Company was defunct and the individual settling defendants did not have any meaningful resources to satisfy a judgment.

  To the extent that ACLN may have had any remaining assets, they had been seized by various authorities and there was no assurance that the judgment here could be enforced abroad. Moreover, even if the judgment were recognized, the Class might be vying with other claimants for the same funds. Based on the Settling Defendants' representations, which it was made clear were subject to confirmation, the only practical available source of recovery for the Class was the D&O insurance policy. Given that the insurance policy was a "wasting" asset that would be used to pay the defense costs of the four firms representing the Settling Defendants, it was clear that even if Plaintiffs were able to establish Settling Defendants' liability at trial and even if the jury accepted Plaintiffs' damage analyses, by that point the only meaningful source of recovery, the insurance policy, would in all likelihood have been substantially reduced or exhausted.

  The risks to collectability were further compounded by the risk that the insurer would disclaim. This was not a theoretical or remote risk given that early in the settlement negotiations, the insurer took steps to rescind the policy based on ACLN's alleged fraud in the inducement; specifically ACLN's alleged misrepresentations in its SEC-filed financial report for the year ending December 31, 1999.

  The proposed Settlement was contingent upon Lead Counsel's receipt of sufficient documentation to support Settling Defendants' representations that they lacked any meaningful resources from which plaintiffs could recover. Lead Counsel received statements under oath regarding the Settling Defendants' net worth and other documentation including tax returns, statements of accounts, insurance policies and certified lists of transactions in ACLN securities during the Class Period. The information was reviewed and analyzed by Lead Counsel who determined that the information supplied confirmed that the individual defendants did not have any meaningful assets that could be used to satisfy a judgment the Class might obtain.

 F. The Range of Reasonableness of the Settlement Fund in Light of the Best Possible Recovery and in Light of All the Attendant Risks of Litigation

  In order to calculate the "best possible" recovery, the Court must assume complete victory on both liability and damages as to all class members on every claim asserted against each defendant in the Action. Courts agree that "[r]easonableness is not a standard susceptible to a mathematical equation yielding a sum certain." In re Union Carbide Corp. Consumer Products Bus. Sec. Litig, 718 F. Supp. 1099, 1103 (S.D.N.Y. 1989); In re Paine Webber Ltd. P'ships Litig., 171 F.R.D. at 130. Rather, there is "a range of reasonableness with respect to a settlement." Newman v. Stein. 464 F.2d 689, 693 (2d Cir. 1972). "That a proposed settlement may only amount to a fraction of the potential recovery does not, in and of itself, mean that the proposed settlement is grossly inadequate and should be disapproved." Grinnell, 495 F.2d at 455. "There is no reason, at least in theory, why a satisfactory settlement could not amount to a hundredth or even a thousandth part of a single percent of the potential recovery." Id. at 455 n.2.

  While Lead Counsel believes that, despite the obstacles facing Lead Plaintiff on the issues of liability and damages, it would be able to prove its claims and obtain a verdict for substantial damages for the members of the Class, a successful proof might result in a victory in form only. The costs of Defense Counsel's services and the significant additional costs of separate liability and damages experts might have consumed in its entirety the proceeds of the insurance policy, the only meaningful source of recovery.

  Above all, the proposed Settlement provides for payment to Class members now, not some speculative payment of a hypothetically larger amount years down the road. "[M]uch of the value of a settlement lies in the ability to make funds available promptly." In re "Agent Orange" Prod. Liab. Litig., 611 F. Supp. 1396, 1405 (E.D.N.Y. 1985), modified on other grounds. 818 F.2d 179 (2d Cir. 1987). Given the obstacles and uncertainties attendant to this complex litigation, the proposed Settlement is within the range of reasonableness, and is unquestionably better than the other likely possibility — little or no recovery. II. Expenses, Litigation Fund, and Fees

  Lead Counsel, on behalf of Plaintiffs' Counsel, is applying for an award of attorneys' fees in the amount of 20% of the Settlement Amount plus accrued interest thereon, for reimbursement of out-of-pocket expenses incurred in connection with the prosecution of the Action up through February 29, 2004 in the amount of $464,444.78, and for the establishment of a litigation fund in the amount of $250,000 to defray the ongoing costs incurred in connection with the continuing prosecution of the Action against the BDO Entities. Lead Counsel also suggests reserving $100,000 to pay the estimated costs and expenses associated with the administration of the Settlement and the provision of notice to the Class.

 A. Expenses Already Incurred

  Reimbursement of expenses incurred on behalf of the Class in common fund cases is appropriate. See In re Arakis Energy Corp., Sec. Litig., No. 95 CV 3431, 201 WL 1590512, at *17 n.12 (E.D.N.Y. Oct. 31, 2001); In re McDonnell Douglas Equip. Leasing Sec. Litig., 842 F. Supp. 733, 746 (S.D.N.Y. 1994). The Berger Declaration and Exhibits D and E thereto demonstrate that $464,444.78 in expenses have been incurred on behalf of the Class, and that amount is deductible from the gross recovery of $5.5 million. The amount is less than the estimated expenses of $500,000 contained in the Notice, and is reasonable given, among other things, the complexity of the litigation, the stage of the proceedings, the amount of discovery completed, the out of town travel required, service of process through the Hague Convention, and the use of forensic accounting and damages experts.

 B. The $250.000 Litigation Fund

  Lead Counsel requests that $250,000 of the Settlement Amount be set aside to fund the continued prosecution of the Action against the BDO Entities. The Application for reimbursement of expenses only covers expenses incurred through February 29, 2004. Since that time, Plaintiffs' Counsel have already incurred and expect to incur significant additional expenses on behalf of the remaining claims. For example, four depositions have been taken in March and April 2004 and an additional eight are scheduled. In conjunction with each of these depositions there will be the cost of the court reporter and possibly a videographer. Also, expert discovery is scheduled. Lead Plaintiff, an institutional investor with a significant financial stake in the outcome of the litigation, has approved the establishment of such a fund. See Berger Decl. Exhibit A, Reeves Decl. ¶¶ 20-22. It is so Ordered and said sum may be deducted from the recovery.

 C. Administering the Settlement and Providing Notice to the Class

  Costs and expenses associated with the final administration of the Settlement and notices to the Class are estimated by Lead Counsel to involve approximately $100,000. The Court is prepared to rely upon the estimates of Plaintiffs' Counsel, and such sum may be deducted from the recovery.

 D. The Fees

  In assessing fees payable to counsel, the Second Circuit has held that "district courts should continue to be guided by the traditional criteria" set forth in Grinnell. Goldberger v. Integrated Resources. Inc. 209 F.3d 43, 47 (2d Cir. 2000) ("Goldberger"). Those factors include:

(1) the time and labor expended by counsel; (2) the magnitude and complexities of the litigation; (3) the risk of the litigation . . .; (4) the quality of representation; (5) the requested fee in relation to the settlement; and (6) public policy considerations.
Goldberger, 209 F.3d at 50.

  11,801.66 hours were spent by the plaintiffs' firms on this case and attest to their extensive efforts.

  Here, through the many proceedings before this Court, the Court has witnessed first hand the quality of services rendered by Lead Counsel in prosecuting this Action. The skill and prior experience of Plaintiffs' Counsel are also relevant in determining fair compensation. In re Union Carbide Corp. 724 F. Supp. 160, 165 (S.D.N.Y.1989). Exhibit F of the Berger Declaration includes descriptions of the background and experiences of each of the plaintiffs' counsel which assisted Lead Counsel in prosecuting this action. As these submissions demonstrate, Plaintiffs' Counsel have expertise in the specialized field of shareholder securities litigation.

  The quality of opposing counsel is also relevant in evaluating the quality of services rendered by Plaintiffs' Counsel. See, e.g. Warner Communications Sec. Litig., 618 F. Supp. at 749. Settling Defendants are represented by four nationally prominent firms of undeniable experience and skill.

  In order to determine a reasonable fee for the services of counsel, it is necessary to understand what counsel has actually accomplished for their clients, the class members. This can only be done when the expenses paid by the class are deducted from the gross settlement. The amount that remains, the adjusted gross settlement, represents what counsel has been able to achieve for the benefit of the class. Cf. 15 U.S.C. § 77z-l(a)(6) ("Total attorneys' fees and expenses awarded by the court to counsel for the plaintiff class shall not exceed a reasonable percentage of the amount of any damages and prejudgment interest actually paid to the class.") (emphasis added).

  In this case the amount actually distributable to the Class is prospectively as follows: $5.5 million in cash plus interest thereon less: (1) $464,444.78 for reimbursable expenses incurred through February 29, 2004; (2) $250,000 for the Litigation Fund; (3) $100,000 for the estimated cost of administration of the Settlement and notice thereof to the Class, and (4) attorneys' fees. In other words, a distribution of $4,685,555.30 is available to the class, less attorneys' fees. Given the totality of the circumstances in this case, reasonable fees are fixed and shall be payable at 20% of the adjusted gross settlement of $4,685,555.30, or $937,111.06. That leaves the Class with $3,748,444.30, or approximately 63.2% of the recovery from the Settling Defendants.

 III. Additional Findings

  The Second Consolidated and Amended Class Action Complaint dated December 19, 2002, which was further amended on June 13, 2003 and August 8, 2003, which the Court finds, as to the claims asserted against the Settling Defendants, was filed in accordance with Fed.R.Civ.P. 11, is hereby dismissed in its entirety as to the Settling Defendants, with prejudice, and without costs to any party.

  Upon the Effective Date, by operation of this Decision and the Final Judgment to be entered hereon, each Class Member, whether or not such Class Member executes and delivers a Proof of Claim and Release, other than those who have filed timely requests to be excluded from the Class, shall have fully, finally, and forever released, relinquished and discharged all Settled ACLN Claims against the Released Defendant Parties.

  Upon the Effective Date, by operation of this Decision and the Final Judgment to be entered hereon, all members of the Class should be and are forever barred and enjoined from prosecuting the Settled ACLN Claims against any of the Released Defendant Parties.

  Upon the Effective Date, by operation of this Decision and the Final Judgment to be entered hereon, each Released Defendant Party, shall have fully, finally, and forever released, relinquished and discharged all Settled ACLN Defendants' Claims and should be and are barred and enjoined from prosecuting any of the Settled ACLN Defendants' Claims.

  This Decision and the Final Judgment to be entered thereon, and the Settlement Stipulation, and all papers related thereto are not, and shall not be construed to be, an admission by any of the Settling Defendants of any liability or wrongdoing whatsoever, and shall not be offered as evidence of any such liability or wrongdoing in this or any other proceeding.

  The administration of the Settlement, and the decision of all disputed questions of law and fact with respect to the validity of any claim or right of any Person to participate in the distribution of the Settlement Fund should and shall remain under the authority of this Court.

  Any Non-Settling Defendant should be and is barred from asserting any Claim arising out of or relating to the Complaints, (including, without limitation, claims for contribution and equitable indemnity) by which any Non-Settling Defendant attempts to recover from the Settling Defendants losses arising as a result of claims made by the Plaintiffs on behalf of themselves or any portion of the Class against any Non-Settling Defendant. Notwithstanding the dismissal of the Settling Defendants provided for hereafter, if there is a final verdict or judgment against any or all Non-Settling Defendants in this action, the total amount of such verdict(s) or judgment(s) shall be reduced by the greater of (a) an amount that corresponds to the percentage of responsibility of the Settling Defendants; or (b) the amount paid to plaintiffs by the Settling Defendants.

  The Settling Defendants should be and are barred from asserting any Claim arising out of the Complaints, (including, without limitation, claims for contribution and equitable indemnity) by which the Settling Defendants attempt to recover from any Non-Settling Defendant monies paid to settle the Action. CONCLUSIONS

 A. The Settlement of the Action with the Settling Defendants on the terms and conditions set forth in the Settlement Stipulation is, after hearing, determined in all respects to be fair, reasonable and adequate and is hereby approved pursuant to Rule 23(e) of the Federal Rules of Civil Procedure.

 B. Eleven persons have requested to be and are opted out of the Class. These persons are as follows: Mary Arena; Richard W. Burg; David Freeman, the Freeman Family Partnership, A Texas Limited Partnership composed of David R. Freeman and Margaret Freeman; William Massatis; Thomas S. Pratt, Christopher Scott; Cordia V. Scott, Douglas P. Scott, Jo Ann W. Scott, and Morris Smith.

 C. Expenses of $464,444.78 incurred by Plaintiffs' Counsel on behalf of the Class shall be reimbursed from the Escrow Account, and this reimbursement shall be allocated among Plaintiffs' Counsel by Lead Counsel in a fashion which fairly compensates each Plaintiffs' Counsel in view of their respective contributions to the prosecution and settlement of the Action.

 D. A fund of $100,000 is to be set aside from the Escrow Account to cover the costs and expenses associated with the administration of the Settlement and notices to the Class.

 E. A litigation fund in the amount of $250,000 (the "Litigation Fund") shall be established out of the Escrow Account. The Litigation Fund shall be used to fund the continued prosecution of the Action on behalf of the Class against the remaining defendants, the BDO Entities. Lead Counsel is permitted to draw against the Litigation Fund without further order of the Court to pay costs of the continued prosecution of the Action against the BDO Entities.

 F. Attorneys' fees of $937,111.06 shall be paid from the Escrow Account in accordance with Paragraph 14 of the Settlement Stipulation. Attorneys' fees shall be allocated among Plaintiffs' Counsel by Lead Counsel in a fashion which fairly compensates each Plaintiffs' Counsel in view of their respective contributions to the prosecution and settlement of the Action.

 G. Upon the Effective Date, by operation of said Decision and the Final Judgment thereon, each Class Member, whether or not such Class Member executes and delivers a Proof of Claim and Release, other than those who have filed timely requests to be excluded from the Class, shall have fully, finally, and forever released, relinquished and discharged all Settled ACLN Claims against the Released Defendant Parties.

 H. Upon the Effective Date, by operation of said Decision and the Final Judgment thereon, all members of the Class are forever barred and enjoined from prosecuting the Settled ACLN Claims against any of the Released Defendant Parties.

 I. Upon the Effective Date, by operation of said Decision and the Final Judgment thereon, each Released Defendant Party, shall have fully, finally, and forever released, relinquished and discharged all Settled ACLN Defendants' Claims and shall forever be barred and enjoined from prosecuting any of the Settled ACLN Defendants' Claims.

 J. Said Decision and the Final Judgment thereon, and the Settlement Stipulation, and all papers related thereto are not, and shall not be construed to be, an admission by any of the Settling Defendants of any liability or wrongdoing whatsoever, and shall not be offered as evidence of any such liability or wrongdoing in this or any other proceeding.

 K. The administration of the Settlement, and the decision of all disputed questions of law and fact with respect to the validity of any claim or right of any Person to participate in the distribution of the Settlement Fund shall remain under the authority of this Court.

 L. Any Non-Settling Defendant is barred from asserting any Claim arising out of or relating to the Complaints, (including, without limitation, claims for contribution and equitable indemnity) by which any Non-Settling Defendant attempts to recover from the Settling Defendants losses arising as a result of claims made by the Plaintiffs on behalf of themselves or any portion of the Class against any Non-Settling Defendant. Notwithstanding the dismissal of the Settling Defendants provided for hereafter, if there is a final verdict or judgment against any or all Non-Settling Defendants in this action, the total amount of such verdict(s) or judgment(s) shall be reduced by the greater of (a) an amount that corresponds to the percentage of responsibility of the Settling Defendants; or (b) the amount paid to plaintiffs by the Settling Defendants.

 M. The Settling Defendants are barred from asserting any Claim arising out of the Complaints, (including, without limitation, claims for contribution and equitable indemnity) by which the Settling Defendants attempt to recover from any Non-Settling Defendant monies paid to settle the Action. N. A judgment accordingly shall be entered pursuant to Fed.R.Civ.P. 58 in accordance with the foregoing findings of fact and conclusions of law which constitute the grounds of the Court's action.

 O. Pursuant to Fed.R.Civ.P. 54(b), the Court expressly determines that there is no just reason for delay of entry of a final judgment in accordance with the foregoing decision set out herein.

 P. Without affecting the finality of the judgment in any way, this Court hereby retains continuing jurisdiction over (a) implementation of this Settlement and any award or distribution of the Settlement Fund, including interest earned thereon; (b) disposition of the Settlement Fund; (c) hearing and determining applications for attorneys' fees, costs, interest and reimbursement of expenses in the Action; and (d) all parties hereto for the purpose of construing, enforcing and administering the Settlement Stipulation.

 Q. The Court retains exclusive jurisdiction over the Action with respect to the ongoing prosecution against the BDO Entities and nothing herein shall be deemed to limit or otherwise affect the prosecution thereof. Nothing herein shall limit the ability of any Non-Settling Defendant to make any argument or advance any position concerning the admissibility or inadmissibility at trial of the settlement.

  SO ORDERED.


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