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Court Still Considering Fees in Citigroup Bondholder Settlement

August 21, 2013 | Posted in : Fee Request

A recent AM Law Litigation Daily story, “Judge OKs $730 Million Citi Bondholders Deal,” reports that U.S. District Judge Sidney Stein approved a $730 million settlement in the Citigroup litigation with bondholders who claimed the bank misled them about the condition during the financial crisis.  The ruling does not address the lingering question of whether plaintiffs’ counsel at Bernstein Litowitz Berger & Grossmann will get $146 million they’ve requested in attorneys fees.  Berstein Lowitz’s total recovery in post-financial crisis investor class actions is now hovering above the $5 billion historic mark.

In a 13-page decision, Stein called the settlement fair and reasonable, even as he noted that Bernstein Lowitz’s own expert witness pegged damages at roughly $3 billion.  Plaintiffs’ counsel would have faced several obstacles at trial.  Stein wrote, like establishing liability under Fait v. Regions Financial Corp., a 2011 decision by the U.S. Court of Appeals for the Second Circuit that made it extremely difficult to build a securities class action based on a bank’s statements about its goodwill and loan loss reserves.

Stein has not yet ruled on the firm’s $146 million attorney fee request, which it filed in June.  The firm plans to give part of the money to co-counsel at Kessler Topaz Meltzer & Check and Pomerantz Grossman Hufford Dahlstrom & Gross.  By way of comparison, Bernstein Litowitz and its co-counsel asked for $150 million when it negotiated a historic $2.4 billion class action settlement with Bank of America Corp. last September.

NALFA also reported on this case in “$146M Fee Request in Citigroup Bondholder Case.”  This case is In Re Citigroup Inc Bond Litigation.  For more information visit http://www.blbglaw.com/cases/00121.