On August 13, 2013, Class Counsel filed with the court a “Revised Preliminary Final Accounting” from the Settlement Administrator and there appear to be some mistakes…
This filing details the total amount of money sought to be approved. The total amount does not differ from the August 6th filing, but the new revised filing provides some explanatory notes.
The total amount of approval sought is still $1,202,210,312.08.
That total is broken down as follows:
16,973 Full Track A Liquidated Awards and Tax Awards of $62,500 each ($50,000 + $12,500 in taxes) for a total of $1,060,812,500.00.
638 Track A Liquidated and Tax Awards Shared by Multiple Claimants Determined to Have Been Operating a Single Farming Operation with One or More Other Prevailing Claimants of $62,500 each ($50,000 + $12,500 in taxes) for a total of $39,875,000.00. There were a total of 1,398 successful Claimants who shared operation of a “single farming operation” with other Claimants and who therefore will share, on a pro rata basis, a Track A Award with the other successful Claimants with whom they operated a single farming operation. The total number of such “single farming operations” operated by multiple successful Claimants is 638.
11 Partial Track A Liquidated and Tax Awards Paid to Claimants Receiving a Partial Award Arising From a Different Farming Operation of variable amounts for a total of $385,416.66. Of the 1,398 successful Claimants entitled to a share of a Track A Award, these eleven Claimants are also entitled to a Track A Award based on the discrimination they suffered in connection with one or more farming operations that were different from the “single farming operation” for which they will be awarded a pro rata share of a single Track A Award. However, the Settlement Agreement does not allow any individual Claimant to recover more than the amount of a full Track A Award (i.e., $50,000). Therefore, the amount of each of these awards differs depending on how much of a pro rata award each Claimant is awarded for the “single farming operation” in which they were involved.
38 Track A Non-Credit Awards of $3,000 each for a total of $114,000.00.
5 Track A Loan Awards of variable amounts for a total of $646,880.58. The amount of each of these loan awards differs, depending on the amount of principal and interest each individual Claimant owes on the loan that is the subject of the loan award.
5 Tax Awards calculated at 25% on $465,845.34 in Principal Track A Loan Awards of variable amounts for a total of $116,461.34. Under the Settlement Agreement Track A Claimants who receive Track A Loan Awards are also entitled to a Track A Tax Award of 25% of the principal amount (not interest) of their outstanding loans. The principal amount was $465,845.34. Thus, the total of the tax awards being made to these five Claimants is 25% of $465,845.34, which is $116,461.34.
0 Track B Awards of $250,000 each for a total of $0.
$1,785,130.00 for the Ombudsman’s fees to date minus $1,785,130.00 already paid to the Ombudsman for a total of $0.
$1,861,597.20 for the fees of Kinsella Media, LLC plus $13,199,758.01 for the fees of the Claims Administrator plus $8,078,568.29 for the fees of the Neutrals plus $200,000.00 for the fees of the Federation Southern Cooperatives/Land Assistance Fund for a subtotal of $23,339,923.50 in implementation fees to date minus $20,000,000.00 already paid in implementation fees for a total of $3,339,923.50.
$4,100,000.00 for the estimation of future fees of the Claims Administrator.
$200,000.00 for the estimation of future fees of the Neutrals.
$90,835,000.00 for the attorneys’ fees award.
Looking closely at the math, however, we see that something is wrong. Adding up the totals of the total amount of money to be funded, we get:
$1,060,812,500.00 + $39,875,000.00 + $385,416.66 + $114,000.00 + $646,880.58 +$116,461.34 + $0 + $0 + $3,339,923.50 + $4,100,000.00 + $200,000.00 + $90,835,000.00 = $1,200,425,182.08.
So why is there a discrepancy between the added total of $1,200,425,182.08 and the requested amount of $1,202,210,312.08?
The difference is ($1,202,210,312.08 - $1,200,425,182.08) = $1,785,130.00. This amount is exactly the amount already paid to the Ombudsman in this case. What’s the deal?
It appears to this blog that the Settlement Administrator has erroneously counted the Ombudsman’s fees twice. The revised preliminary accounting includes the Ombudsman’s fees as part of the subtotal implementation costs of $25,125,053.50. This number represents the $23,339,923.50 in implementation costs to date plus the $1,785,130.00 in Ombudsman fees to date. The Settlement Administrator then subtracted $21,785,130.00 representing implementation costs and Ombudsman fees already funded. This number represents the $20,000,000.00 in implementation costs to date already funded plus the $1,785,130.00 in Ombudsman fees to date already funded. This gives us a total of implementation costs and Ombudsman fees that still need to be funded of $3,339,923.50. (That’s $25,125,053.50 subtotal - $21,785,130.00 already funded).
However, the Settlement Administrator includes in the $1,202,210,312.08 requested a total of $1,785,130.00 in Ombudsman fees incurred to date. However, as shown above, this amount was already included in the $3,339,923.50 in total implementation costs. Therefore, Class Counsel is effectively asking for an extra $1,785,130.00 to be funded in expenses that have not been incurred.
Could Class Counsel and the Settlement Administrator really have made a $1,785,130.00 mistake? Isn’t their job to get the numbers right? Where will this extra $1,785,130.00 go? To the Ombudsman? To Class Counsel? Will the Court catch this mistake? Who should you complain to? The Ombudsman?
Attached is the Revised Preliminary Final Accounting so you can check the math…