Overview
In an order dated yesterday, Judge Kaplan approved a settlement of class action securities fraud claims against former Lehman directors and officers for $90 million, funded entirely by D&O insurance. As noted in a prior post, Judge Kaplan took the unusual step of asking that the defendants produce information about their net worth in camera before deciding whether the settlement was reasonable. Yesterday's order reflects that Judge Kaplan was satisfied:
The Court has reviewed the essential documents filed in camera in order to make a practical judgment about whether it is reasonable to compromise this case, rather than pursuing it, in light of both the likelihood of ultimate success and the likelihood in the event of success of collecting the eventual judgment given the resources of those defendants as to whom information is reasonably available. While some may be concerned at the lack of any contribution by the former director and officer defendants to the settlement, Lead Counsel’s judgment that the $90 million bird in the hand is worth at least as much as whatever is in the bush, discounted for the risk of an unsuccessful outcome of the case, is reasonable.
