Class Counsel wants to Modify the Final Order and Judgment again…
On August 19, 2013, Class Counsel filed another Motion to Modify Final Order and Judgment.
Judge Friedman has already signed two orders modifying the Final Judgment in this case on September 14, 2012 and February 14, 2013 to allow otherwise ineligible claimants to have a claim determination made by the Claims Administrator and denied one request on June 21, 2013 on the basis that the government opposed it.
Here, Class Counsel seeks several new modifications.
First, Class Counsel has now realized that their old proposed claim determination letters would be confusing because of all the different circumstances and awards involved. Due to this confusion, Class Counsel has drafted new versions of the claim determination letters to give claimants more information about their award (or denial).
So what are the changes?
The new proposed Track A determination letters are now two separate “Approval” and “Denial” letters with different information, instead of one form letter with a check box for “approved” or “denied”.
For the Track A approval letters, the letter will include additional information regarding the loans approved for debt relief, a caution that a Loan Award payment may not satisfy the entire amount of outstanding USDA loans, notification that the names of co-claimants and any privately-retained counsel will be printed on the Award check and that Award checks payable to Estates or Incapacitated Claimants will be released only to the authorized Legal Representative, and more detailed information regarding the Tax Award and Loan Award and the potential impact of failing to pay any outstanding debt remaining on USDA loans.
The letters would also inform successful claimants that if he or she retained private counsel to submit the claim on his or her behalf, the Award check will be sent to that attorney, and further reminds the claimant that the Settlement Agreement limits the fee that the attorney may charge to two percent of the total Track A Award.
Also, under the current judgement, settlement checks would accompany approval letters. However, under the proposed revised arrangement, settlement checks will only be mailed within 45 days of the approval letter. Under this plan the Judge would first have to sign the order, then approval letters would be sent, then the checks would arrive within 45 days.
Class Counsel also propose variations on the Track A approval letters to deal with the situations where multiple Track A claims were filed on behalf of the same Estate and the Estate’s claim was approved or where multiple claimants were determined to have filed separate claims but all such claims involved the same farming operation, and a claim for that farming operation was approved. Information specific to these claimants, such as how competing heirs can claim a portion of an award, will be provided in these versions of the approval letters.
Further, Class Counsel proposes new “inserts” to be included with Track A approval letters to provide further information to successful claimants. These inserts include the following:
- “Information Regarding Awards and Taxes”, which explains that the award is taxable income, that a tax payment will be made by the Claims Administrator to the Internal Revenue Service on the claimant’s behalf, that the Loan Award also will be paid directly to USDA on the claimant’s behalf, and reiterates the two percent cap on attorneys’ fees chargeable by privately-retained counsel;
- “Proof of Legal Representation”, which explains the concept of “legal representative” for Estates and for Incapacitated Claimants, and identifies the documentation required by the Claims Administrator to release an Award check to a Legal Representative for an Estate or Incapacitated Claimant;
- “Notice to Claimant that Check was Sent to Attorney”, which advises the claimant that the Claims Administrator has mailed the Award check, payable jointly to the claimant and the attorney, to the attorney, if an attorney had been privately retained by the claimant to submit the claim; and
- “Check Stub”, which accompanies the Award check and identifies the components of the Total Track A Award to the claimant.
The Track A proposed letters and inserts can be found here: Track A Proposed Approval and Denial Letters and Inserts
Class Counsel has also proposed a new Track B form which just states that the claimant has been denied since no Track B awards are anticipated. That proposed form can be found here: Track B Proposed Denial Letter
Further, for some reason Class Counsel feels that the Neutrals have not been paid enough and wants to give them more money from the settlement fund.
As part of its motion, Class Counsel requests that the Court modify the final judgment to allow the Neutrals to be paid up to $200,000.00 from the settlement fund for costs associated with implementation. Apparently, the Settlement Agreement provides for compensation to the Settlement Administrator and Ombudsman for implementation efforts following the Preliminary Final Accounting but does not mention further compensation to the Neutrals. Since Class Counsel feels that there may still be work for the Neutrals to do, it proposes funding up to $200,000.00 from the Settlement Fund to pay the Neutrals. It is unclear to us why the specifically negotiated terms of the settlement should be changed at the last minute, even if it does seem unfair to the Neutrals.
Class Counsel was careful to propose that these funds come from the Claimants’ funds and not out of the $90,000,000.00 attorneys’ fee award.
The USDA does not oppose this motion.
We will update the site when the Court rules on this motion.