On July 18, 2013, Judge Chesler made several orders regarding distribution to the Direct Purchaser Subclass in Sullivan v. DB Invs., Inc., Case No. 2:04-cv-02819-SRC-MAS)…

As you may recall, class counsel previously moved for distribution of the direct purchaser subclass.

Judge Chesler ordered the following this week:

1. Claims filed by members of the Direct Purchasers Class after the claims filing deadline of May 19, 2008, but on or before February 28, 2012, are accepted as eligible for payment from the Direct Purchaser Class Net Settlement Fund, provided they otherwise are eligible for payment.

2. The Court approves and adopts the administrative recommendation of the claims administrator concerning rejection of deficient and ineligible claims as set forth in the Declaration of Daniel Coggeshall dated June 21, 2013. The Court finds that Rust has carried out the claims administration process in a reasonable manner and consistent with orders of this Court. Rust has offered claimants reasonable notice of claim deficiencies and an opportunity to cure them.

3. The Court directs distribution of the Direct Purchaser Class Net Settlement Fund according to the Plan of Allocation approved by this Court and consistent with this Distribution Order. The Court authorizes Rust to distribute payment to Authorized Direct Purchaser Class Claimants via a two-step distribution. Authorized Direct Purchaser Claimants will receive approximately 80% of their payments during an initial distribution and the remaining amount they are entitled to during a second distribution made after resolution of questions about the eligibility of three outstanding claims. The Court finds that the two-step distribution is reasonable, will prevent any further delay in payments to Authorized Direct Purchaser Class Claimants, and is in the best interests of the Direct Purchaser Class.

4. The Court authorizes payment of $56,009.58 to the Settlement Administrator for claims administration fees and expenses incurred and outstanding to date from the Direct Purchaser Settlement Fund.

5. The Court authorizes plaintiffs to reserve $31,250 for payment of future claims administration expenses that Rust and class counsel reasonably expect will be incurred in connection with administering Direct Purchaser claims.

6. The Court authorizes plaintiffs to reserve $134,804 for the payment of anticipated future expenses, funds paid to the IRS and estimated future taxes, Escrow Agent fees, and claims administration expenses.

7. This Court retains continuing jurisdiction over the administration and distribution of the settlement proceeds.

Separately, on June 24, 2013, a consumer subclass member wrote a letter to the Court objecting the the 95% reduction in his anticipated claim amount.  He stated that he relied on class counsel’s information in making the determination not to opt out of the class action and therefore be bound by his award amount.  He expected his award to be around $4000 but only receive $252.57.  He accuses class counsel of defrauding the consumer subclass so that the direct purchasers and lawyers could get the lion’s share of the money.

On July 3, 2013, class counsel responded to the objection, stating that while the claimant’s “recognized claim amount was $4718.21, he apparently did not understand that his award would be reduced pro rata pursuant to the settlement agreement.  Class counsel made public this claimant’s specific claims.