On June 21, 2012, a federal judge approved a $40 million settlement in a mortgage-backed securities class action lawsuit against individuals previously affiliated with Lehman Brothers Holding, Inc., which in September 2008 filed the largest bankruptcy in US history. Led by locals 302 and 612 of the International Union of Operating Engineers – Employers Construction Trust Fund, New Jersey Carpenters Health Fund, and Boilermakers-Blacksmith National Pension Trust, the plaintiffs are represented by Cohen Milstein Sellers & Toll PLLC.
The final approval by Judge Lewis A. Kaplin of the U.S District Court, Southern District of New York ends four years of litigation against individuals previously affiliated with Lehman Brothers, who were charged with filing misleading Offering Documents regarding the credit quality of billions of dollars worth of mortgage pass-through certificates issued in 2006 and 2007.
“While this settlement by no means compensates investors for the full amount of their damages, we believe it is an excellent result given the bankruptcy and limited insurance funds available,” said plaintiffs’ lead counsel Steven J. Toll, of Cohen Milstein Sellers & Toll PLLC.
Under the terms of the settlement, the Lehman Brothers Estate will pay $8.3 million and insurers for the firm’s officers and directors will pay the remaining $31.7 million.
Class members have until August 20, 2012, to file their settlement claims. In addition to the lead and named plaintiffs, the Iowa Public Employees’ Retirement System and Public Employees’ Retirement System of Mississippi intervened in the action on behalf of additional investors. The case is In re Lehman Brothers Mortgage-based Securities Litigation, No. 08-CV-6762.
For more information about the settlement, click here.
