AUSWR
The Association of U S West Retirees
 

 

 

Attorney fees limited in securities suit
Judge sets amount at 12%; ruling benefits Colorado PERA
By David Milstead
Rocky Mountain News
Wednesday, November 15, 2006


Colorado PERA will get more and its attorneys less as a judge moved to limit fees in one of the largest securities lawsuits ever.  Dutch grocer Royal Ahold settled the lawsuit a year ago for $1.1 billion.  The Colorado Public Employees' Retirement Association was lead plantiff.

Attorneys will receive $130.6 million in fees, 20 percent less than requested, U.S. Judge Catherine Blake ruled Tuesday.

She said while federal law was unclear on what attorney fees are appropriate, 12 percent of the $1.1 billion case settlement was "reasonable." She also allotted $3.3 million in expenses.

"The settlement obtained is among the largest cash settlements ever in a securities class-action case and represents an estimated 40 percent recovery of possible provable damages," Blake said in her order.  "Strictly on a percentage comparison approach, a 12 percent fee award appears to me a reasonable percentage."

The amount PERA will receive has not been determined.  The pension fund said in January 2004 it had losses of $16.2 million, based on its purchases of Ahold stock over the years and the damage done when the company revealed it had accounting problems.

Ahold said in 2003 that it overstated profit by $1.23 billion and inflated sales for three years.  Blake approved the settlement of the shareholder suit in June.

The accounting scandal triggered a 63 percent drop in the Amsterdam-based company's share price in a single day and the resignation of the CEO.

PERA had $36 billion in assets as of Aug. 31. It served 389,948 members, including active workers, retirees and other inactive members who have some service time in the system.

Wire services contributed to this report. David Milstead is finance editor of the Rocky Mountain News. He can be reached at milstead@RockyMountainNews.com or 303-954-2648.

http://www.rockymountainnews.com/drmn/other_business/article/0,2777,DRMN_23916_5144119,00.html