AOL/TW Claims Not Mishandled, Lawyers Insist
This article is from the archive of The New York Sun before the launch of its new website in 2022. The Sun has neither altered nor updated such articles but will seek to correct any errors, mis-categorizations or other problems introduced during transfer.
A law firm overseeing the payment of a class action settlement to former AOL/Time Warner shareholders denies that claims filed in the case were mishandled.
In April, the judge in the case, Shirley Wohl Kram of Manhattan, approved the $2.65 billion deal, which stemmed from allegations that the companies misrepresented their finances at and prior to the time of their historic and ill-fated merger in 2001.
The lead counsel for the class, Heins, Mills, & Olson of Minneapolis, and a California-based claim-processing firm, Gilardi & Co., initially projected that the class members would be paid by the end of 2006. However, in late 2006, Gilardi said it would not wrap up processing the claims until February of this year and that payment might not come until April. In addition, one shareholder, Scott Spielberg of Missouri, said he was told that tens of thousands of missing claims were discovered at the last minute, leading to the delay.
“No claims have been ‘misplaced’ or ‘recently discovered,’ a Gilardi official, Robert Forrest, said in a declaration filed with the federal court late last month. He said about 695,000 claims were received, a number that exceeded early estimates by 95,000 and resulted in the two-month delay. He added that about 120,000 claims have been rejected and roughly 20,000 claims filed after the February 2006 deadline are being processed, but will only be paid if the court approves.
One of the class counsel, Samuel Heins, opposed Mr. Spielberg’s request that the fund be audited. Mr. Heins also defended his firm’s receipt of $147.5 million in legal fees for the case last year, before the class was paid. “This timing is no different from virtually every class action, which is consistent with law,” he wrote.
Mr. Heins also rejected criticism some class members have leveled, after some large shareholders who opted out of the class action obtained settlements more generous, in percentage-of-alleged-loss terms, than the one provided to the class. “The risk calculus, the attorney’s fee structure, and multiple other factors would all have bearing on any comparison,” the Minnesota lawyer said.
Mr. Spielberg has reiterated his request to Judge Kram for an independent audit of the claims.
