OPINION & ORDER

          SCHEINDLIN, District Judge.

         I. INTRODUCTION

         Plaintiffs allege in this putative class action that defendants violated the Racketeer Influenced and Corrupt Organizations Act (" RICO" ) and are liable for damages and other relief arising from unjust enrichment, breach of contract, breach of the duty of good faith and fair dealing, breach of fiduciary duties, fraud, negligent misrepresentation, professional malpractice, unethical, excessive and illegal fees, and conspiracy. On May 14, 2004, the Court preliminarily certified a settlement class and approved a proposed settlement with defendants Jenkens & Gilchrist, P.C., Paul Daugerdas, Erwin Mayer and Donna Guerin (collectively, " Jenkens" ). Lead Plaintiffs now seek final approval of the settlement and certification of the class, and entry of a proposed final judgment. Lead Counsel seek an award of attorney's fees and expenses for their efforts. On January 24, 2005 the Court held a hearing on the fairness of the settlement. Having considered all objections, a class is hereby certified and the settlement is approved in a separate Order issued today. This opinion explains the decision to certify the class and approve the settlement.

         II. BACKGROUND

         A. The Alleged Conspiracy

          This case arises out of tax and consulting services offered by several professional law and accounting firms. In their Second Amended Complaint, the Denney Plaintiffs allege that, in the mid-1990's, Jenkens, in concert with Deutsche Bank and others, developed a tax shelter strategy based on the purchase of foreign currency options. The strategy, sometimes with minor variations, was marketed under various names, including " Currency Options Bring Reward Alternatives," or COBRA. The gravamen of plaintiffs' allegations is that Jenkens, and the other defendants, knew that the tax strategies lacked economic substance and would be held invalid by the IRS, but falsely held them out to plaintiffs as legitimate.

         The Denney Plaintiffs allege that Jenkens and Deutsche Bank recruited a number of accounting firms (the " Marketing Participants" ) to market the tax strategies to their clients. The Marketing Participants included, inter alia, BDO and Ernst & Young. Once the Marketing Participants identified a suitable client, they would arrange a meeting to present the tax strategy to the client.

         At these presentations, plaintiffs allege, the Marketing Participants would represent that the tax strategy was " legitimate and in accordance with all applicable tax laws, rules, and regulations [and] was not a ‘ sham transaction’ that would be ignored or disallowed for tax purposes." The Marketing Participants further represented that the tax strategy was devised by them, not by Jenkens. " The crux of the sales pitch was always that a major law firm, Jenkens & Gilchrist, would prepare an ‘ independent’ opinion letter confirming the propriety of the [tax strategy], which would supposedly provide insurance in the event of an audit." Plaintiffs allege that Jenkens was not, in fact, able to provide a truly " independent" opinion letter, but could provide only " a pre-fabricated and canned legal opinion confirming the propriety of their own tax strategy." Plaintiffs allege that Jenkens charged excessive and unreasonable fees for its advice and opinion letters.

         Essentially these same representations were allegedly made to all members of the class. After plaintiffs entered and completed the tax shelter transactions, Jenkens provided them with an opinion letter attesting to the legitimacy of the tax strategies. These opinion letters were substantially identical.

         B. The Denney Plaintiffs

         The Denney Plaintiffs were introduced to COBRA by their accountants, the small firm of Pasquale & Bowers, who had been recruited by BDO to market COBRA to their clients. Pasquale & Bowers contacted the Denney Plaintiffs regarding COBRA in September 1999. The Denney Plaintiffs subsequently met with the Pasquale Defendants and BDO to discuss the strategy. At the presentation in September 1999, BDO and Pasquale made the representations described above. The Denney Plaintiffs decided to engage in the transaction in October 1999, and retained Jenkens to advise them. With the assistance of Jenkens, the Denney Plaintiffs created various partnerships and limited liability companies for the purpose of carrying out the COBRA transactions. The Denney Plaintiffs entered into the COBRA transactions in November 1999.

          Jenkens sent each of the Denney Plaintiffs virtually identical opinion letters in March 2000. The opinion letters advised that the COBRA strategy was legitimate. The Denney Plaintiffs allege that these letters are representative of similar letters provided to all Class Members. In reliance on defendants' representations, the Denney Plaintiffs reported the COBRA transactions on their tax returns for 1999.

         C. The Camferdam and Riggs Plaintiffs

         The plaintiffs in Camferdam and Riggs have appeared in this action as additional class representatives.

         The Camferdam Plaintiffs sold their business in 1999, realizing a combined capital gain in excess of $70 million. Ernst & Young, who had for several years provided accounting services to the business and to two of the individual Camferdam Plaintiffs, advised the Camferdam Plaintiffs during the transaction. Shortly after the transaction, Ernst & Young approached the Camferdam Plaintiffs to market the COBRA strategy to them. On November 5, 1999, the Camferdam Plaintiffs attended a presentation by Ernst & Young, at which Ernst & Young allegedly made the above representations with regard to COBRA.

         The Camferdam Plaintiffs engaged in the COBRA transactions on November 16, 1999. They subsequently retained Jenkens & Gilchrist to provide opinion letters. Jenkens sent each plaintiff a substantially identical opinion letter in March 2000. The Camferdam Plaintiffs also received a second, substantially identical opinion letter from the law firm of Brown & Wood. In reliance on these representations, the Camferdam Plaintiffs included the COBRA transactions on their tax returns.

         Jack Riggs' investments were managed by Deutsche Bank. Riggs alleges that " Deutsche Bank solicited Jack Riggs to hire the Jenkens Defendants" to procure advice relating to the tax strategies. Riggs carried out the tax strategy. Riggs retained Ernst & Young, who he alleges were secretly working together with Deutsche Bank and Jenkens to develop and promote the tax strategies, to prepare his 1999 tax returns, reflecting the tax strategy.

         D. The Settlement Negotiations

         Class Counsel and Jenkens began settlement discussions in November 2003. Jenkens' insurance carriers claimed that their policies did not cover the damages alleged by plaintiffs. Jenkens asserted that it was severely stressed by the pressure of the tax shelter litigation; the firm was having difficulty retaining lawyers and staff, and was in danger of filing for bankruptcy protection. Following an investigation of the insurance carriers' claims, " and the perilous circumstances of [Jenkens], Class Counsel believed it was in the best interest of all Class Members to immediately attempt to negotiate a global settlement."

         The parties, including the Camferdam and Riggs Plaintiffs, along with Jenkens' insurance carriers, participated in three mediation sessions, on December 17-18, 2003, January 16-17, 2004, and February 19, 2004. Retired Federal Judge Robert Parker presided over these mediations, which he has described as " difficult" and " intense." These negotiations resulted in a Mediated Settlement Agreement, dated March 4, 2004, and a Stipulation of Settlement, dated April 28, 2004, signed by all parties, including Jenkens' insurance carriers. The settlement agreement provided for a settlement fund of $75 million, consisting of $63.5 million from the insurance carriers, $5.25 million from Jenkens, and a total of $6.25 million from the individual defendants. The agreement also provided for extensive informal discovery from Jenkens.           The Court preliminarily approved this settlement on May 14, 2004, and notice was sent to the class. Class members were given until September 27, 2004 to opt out of the class. One hundred and twenty-two plaintiffs timely elected to opt out. This put the settlement at risk. The settlement contemplated the release of Jenkens' insurers in return for their contribution to the settlement fund; it thus left Jenkens without insurance to defend the claims of opt outs. Jenkens had earlier stated that it was unable and unwilling to settle in the face of significant numbers of opt outs. Because of the opt out problem, the parties held a fourth round of mediation on December 1-2, 2004, presided over by retired Judge Parker and by Michael Young of Judicial Arbitration and Mediation Services, who had been appointed Special Master by the Court.

         E. The Amended Settlement

         This fourth round of mediation resulted in an Amended Mediated Settlement Agreement, dated December 2004. The amended settlement provides for an increased settlement fund of $81,557,805, consisting of $70,057,805 from the insurance carriers, $5.25 million from Jenkens, and a total of $6.25 million from the individual defendants. The insurers have further agreed to make $24,942,195-the remainder of the " unreinstated" insurance coverage under Jenkens' policy-available to Jenkens to defend or resolve the claims of opt-outs. In addition, a further $25 million in " reinstated" coverage may be available.

         F. The Bar Order and Judgment Credit

         As part of the settlement, the parties' proposed judgment contains a Bar Order and Judgment Credit provision. Because this provision is the focus of most of the objections, it warrants further description.

         The Bar Order provides that all non-settling defendants and all third parties are barred and enjoined from commencing or prosecuting any action against Jenkens on a " Claim Over." A Claim Over is defined as any claim that

(i) directly or indirectly arises out of or is based upon, related to or connected with any of the Tax Strategies, and (ii) is for recovery of amounts that the Non-Settling Defendant or Third Party paid or owes to the Class (if the case in which an issue arises is a class action) or a Class Member (if the case in which an issue arises is brought by a Class Member). " Claims Over" includes, but is not limited to, all claims by a Non-Settling Defendant or Third Party for contribution and indemnity for amounts owed or paid to a Class Member. It does not, however, include claims based on a written indemnity agreement....

         Essentially, the Bar Order prohibits any non-settling defendant or third party from seeking contribution or indemnification from Jenkens. The Bar Order is mutual: it also prohibits Jenkens from seeking contribution or indemnification from non-settling defendants or third parties. Non-settling defendants and third parties are not precluded from seeking contribution from Jenkens for damages they might eventually be required to pay to plaintiffs who have opted out of the class. The Bar Order applies only to claims for contribution (however denominated); it does not bar any independent claims non-settling defendants and third parties may have against Jenkens.

          To compensate non-settling defendants and third parties for the loss of their contribution claims, the proposed judgment also contains a Judgment Credit provision. Pursuant to this provision, the Court is asked to order that any judgment or award obtained by a class member against a non-settling defendant or third party will be reduced " by the amount or percentage, if any, necessary under applicable law to relieve the Released Persons [the Jenkens defendants] of all liability to such Non-Settling Defendant or Third Party on such barred Claims." This reduction is to be " accomplished by judgment reduction, partial or complete release, settlement credit, setoff, election to recover exclusively under an award for which there is no Claim Over, or such other method as may be permitted by applicable law." The proposed judgment further states that " Such judgment credit, settlement credit, release or setoff shall be in an amount or percentage sufficient under applicable law as determined by the court in which the issue arises to compensate the Non-Settling Defendant or Third Party for the loss of its Claim Over."

         The Judgment Credit provision does not specify a single method of calculating the credit. Instead, it leaves the calculation of the credit to the " applicable law" of the jurisdiction in which a class member may win a judgment or award against a non-settling defendant or third party. The credit will be whatever is necessary under the applicable law to compensate the non-settling defendant or third party for the loss of its claim for contribution.

         G. Objections and the Fairness Hearing

         On December 29, 2004, the settling parties disseminated a supplemental notice of the amended settlement to the class, and the Court extended the deadline for objections to January 10, 2005, to accommodate objections to the amended settlement. The Court received objections from three groups of plaintiffs: the " Harslem" plaintiffs, the " Mattei" plaintiffs, and the " Moore" plaintiffs. The Court also received objections from two non-settling defendants, BDO and Deutsche Bank, and from the Government. A fairness hearing was held on January 24, 2005. In response to objections, the settlement's proponents agreed to certain changes to the language of the proposed judgment offered for the Court's approval; I therefore ordered one final notice to the class, including the language of the proposed judgment, and a final one-week extension of the time for objections. The Court received continued objections from the Harslem Plaintiffs, the Mattei Plaintiffs, BDO, Deutsche Bank and the Government; there were no new objectors.

         III. LEGAL STANDARD

         A. Class Certification

          Federal Rule of Civil Procedure 23 governs class certification. To be certified, a putative class must meet all four requirements of Rule 23(a) as well as the requirements of one of the three subsections of Rule 23(b). In this case, as in most cases seeking money damages, plaintiffs bear the burden of demonstrating that the class meets the requirements of Rule 23(a)-referred to as numerosity, commonality, typicality, and adequacy -and that the action is " maintainable" under Rule 23(b)(3). Under Rule 23(b)(3)-the only applicable subsection of Rule 23(b)-" common" issues of law or fact must " predominate over any questions affecting only individual members," and a class action must be demonstrably " superior" to other methods of adjudication.

         The Supreme Court has held that when a class is certified for settlement purposes only, the " specifications of [Rule 23]-those designed to protect absentees by blocking unwarranted or overbroad class definitions-demand undiluted, even heightened, attention." The Court recognized one exception to this requirement: when confronted with a settlement class, " a district court need not inquire whether the case, if tried, would present intractable management problems."

         The Second Circuit requires a " liberal" construction of Rule 23. Thus, " to deny a class action simply because all of the allegations of the class do not fit together like pieces in a jigsaw puzzle [ ] would destroy much of the utility of Rule 23." Notwithstanding the general liberality in this circuit towards class certification motions, the Supreme Court unequivocally requires district courts to undertake a " rigorous analysis" that the requirements of Rule 23 have been satisfied.

         In ruling on class certification, a district court may not simply accept the allegations of plaintiffs' complaint as true. Rather, it must determine, after a " rigorous analysis," whether the proposed class comports with all of the elements of Rule 23. " [S]ometimes it may be necessary for the court to probe behind the pleadings before coming to rest on the certification question.... [A]ctual, not presumed, conformance with Rule 23(a) remains ... indispensable."

         " In order to pass muster, plaintiffs-who have the burden of proof at class certification-must make ‘ some showing’ " that the proposed class comports with Rule 23. That showing may take the form of, for example, expert opinions, evidence (by document, affidavit, live testimony, or otherwise), or the uncontested allegations of the complaint. However, " a district court is forbidden to weigh the evidence on class certification [and] plaintiffs need not establish the elements of Rule 23 by a preponderance of the evidence."

         1. The Requirements of Rule 23(a)

         a. Numerosity

          Rule 23 requires that the class be " so numerous that joinder of all members is impracticable." " Impracticability does not mean impossibility of joinder, but refers to the difficulty or inconvenience of joinder." Although precise calculation of the number of class members is not required, and it is permissible for the court to rely on reasonable inferences drawn from available facts, numbers in excess of forty generally satisfy the numerosity requirement.

         b. Commonality

          Commonality requires a showing that common issues of fact or law affect all class members. A single common question may be sufficient to satisfy the commonality requirement. " The critical inquiry is whether the common questions are at the core of the cause of action alleged."

         c. Typicality

          The typicality requirement " is not demanding." A named plaintiff's claims are " typical" pursuant to Rule 23(a)(3) where each class member's claims arise from the same course of events and each class member makes similar legal arguments to prove the defendants' liability. " The rule is satisfied ... if the claims of the named plaintiffs arise from the same practice or course of conduct that gives rise to the claims of the proposed class members." Accordingly, the commonality and typicality requirements " ‘ tend to merge’ because ‘ [b]oth serve as guideposts for determining whether ... the named plaintiff's claim and the class claims are so inter-related that the interests of the class members will be fairly and adequately protected in their absence.’ "

         d. Adequacy

          Plaintiffs must also show that " the representative parties will fairly and adequately protect the interests of the class." To do so, plaintiffs must demonstrate that the proposed class representatives have no " interests [that] are antagonistic to the interest of other members of the class." Class representatives must have " an interest in fairly and vigorously pursuing" the claims of the class, so that there is an " assurance of vigorous prosecution." In addition, " Rule 23(a)(4) requires that plaintiffs demonstrate that class counsel is qualified, experienced, and generally able to conduct the litigation."

         Class representatives cannot satisfy Rule 23(a)(4)'s adequacy requirement if they " have so little knowledge of and involvement in the class action that they would be unable or unwilling to protect the interests of the class against the possibly competing interest of the attorneys." However, it is well established that " in complex litigations ... a plaintiff need not have expert knowledge of all aspects of the case to qualify as a class representative, and a great deal of reliance upon the expertise of counsel is to be expected."          2. Rule 23(b)

         If plaintiffs can demonstrate that the proposed class satisfies the elements of Rule 23(a), they must then establish that the action is " maintainable" as defined by Rule 23(b). Rule 23(b) provides that " an action may be maintained as a class action if the prerequisites of subdivision (a) are satisfied, and in addition" one of three alternative definitions of maintainability is met. The proponents of this settlement argue that the action is maintainable under subsection (b)(3), which requires " that questions of law or fact common to the members of the class predominate over any questions affecting only individual members, and that a class action is superior to other available methods for the fair and efficient adjudication of the controversy." Rule 23(b)(3) thus has two elements: " predominance" and " superiority."

          " Class-wide issues predominate if resolution of some of the legal or factual questions that qualify each class member's case as a genuine controversy can be achieved through generalized proof, and if these particular issues are more substantial than the issues subject only to individualized proof." " The 23(b)(3) predominance requirement is ‘ more stringent’ and ‘ far more demanding than’ the commonality requirement of Rule 23(a)." Courts have frequently found that the requirement was not met where, notwithstanding the presence of common legal and factual issues that satisfy the commonality requirement, individualized inquiries predominate. Nonetheless, the Supreme Court has noted that " [p]redominance is a test readily met in certain cases alleging consumer or securities fraud...."

          The superiority prong of Rule 23(b)(3) requires a court to consider whether a class action is superior to other methods of adjudication. In making the requisite inquiries into predominance and superiority, courts should consider, inter alia,

(A) the interest of members of the class in individually controlling the prosecution or defense of separate actions; (B) the extent and nature of any litigation concerning the controversy already commenced by or against members of the class; (C) the desirability or undesirability of concentrating the litigation of the claims in the particular forum; (D) the difficulties likely to be encountered in the management of a class action.

         Where a class is being certified solely for settlement purposes, a court need not consider the last of these factors, the manageability issues that would arise if the case were to be litigated as a class action, " for the proposal is that there be no trial."

         B. The Fairness of the Proposed Settlement

          There is a " strong judicial policy in favor of settlements, particularly in the class action context." " The compromise of complex litigation is encouraged by the courts and favored by public policy." However, the Court " must eschew any rubber stamp approval in favor of an independent evaluation" of the settlement. In carrying out this evaluation, " [t]he Court has a fiduciary duty to the non-representative class members who were not party to the settlement agreement ‘ because inherent in any class action is the potential for conflicting interests among the class representatives, class counsel, and absent class members.’ "

         " A court may approve a class action settlement if it is ‘ fair, adequate, and reasonable, and not a product of collusion.’ A court determines a settlement's fairness by looking at both the settlement's terms and the negotiating process leading to settlement." " A presumption of fairness, adequacy, and reasonableness may attach to a class settlement reached in arm's-length negotiations between experienced, capable counsel after meaningful discovery."

          In addition to looking at the negotiating process, courts consider the following factors in the approval of class action settlements:

(1) the complexity, expense and likely duration of the litigation; (2) the reaction of the class to the settlement; (3) the stage of the proceedings and the amount of discovery completed; (4) the risks of establishing liability; (5) the risks of establishing damages; (6) the risks of maintaining the class action through the trial; (7) the ability of the defendants to withstand a greater judgment; (8) the range of reasonableness of the settlement fund in light of the best possible recovery; (9) the range of reasonableness of the settlement fund to a possible recovery in light of all the attendant risks of litigation.

         When a settlement is negotiated before class certification, the danger of collusion between defendants and class counsel is heightened. Moreover, a settlement agreement " generates [ ] momentum" and may look, to class members and even to the court, " like a fait accompli." Therefore, " a proposed settlement negotiated before class certification is subjected to a higher degree of scrutiny than a later settlement."

         C. Permitting a Second Opt-Out Opportunity Under Rule 23(e)(3)

         Federal Rule of Civil Procedure 23(e)(3) provides that " [i]n an action previously certified as a class action under Rule 23(b)(3), the court may refuse to approve a settlement unless it affords a new opportunity to request exclusion to individual class members who had an earlier opportunity to request exclusion but did not do so." The Advisory Committee Note states that:

[t]he decision whether to approve a settlement that does not allow a new opportunity to elect exclusion is confided to the court's discretion. The court may make this decision before directing notice to the class under Rule 23(e)(1)(B) or after the Rule 23(e)(1)(C) hearing. Many factors may influence the court's decision. Among these are changes in the information available to class members since expiration of the first opportunity to request exclusion, and the nature of the individual class members' claims.          IV. DISCUSSION

         A. Class Certification

         The threshold issue, before undertaking any consideration of the fairness of the settlement, is whether the class may be certified under Rule 23. For the following reasons, I find that certification is appropriate.

         1. Rule 23(a)

         a. Numerosity

         Over the period in question-January 1, 1999 through December 31, 2003-Jenkens issued advice concerning the tax strategies to over 1,100 clients. This number is more than sufficient to render joinder of all class members impracticable. No objector contests numerosity.

         b. Commonality

          The common questions in this case are overwhelming. All members of the class received legal advice from Jenkens concerning the tax strategies. If this case were to proceed to trial, all class members' claims would involve the same common questions of liability, including: (1) was the tax advice correct? (2) If not, was it negligent, or knowingly false? (3) Did the advice fail to disclose material facts about the transactions, or the controlling law? (4) Did Jenkens falsely represent that its advice and opinion letters were " independent" ? (5) Was reliance on the Jenkens advice and opinion letters reasonable, given that each letter asserted only that the strategies were " more likely than not" to pass muster? (6) Were the fees charged unreasonable and excessive? These questions of law and fact are at the core of this action, and are more than sufficient to establish commonality.

         In addition, each class member's claims involve common questions of fact as to the alleged conspiracy between Jenkens and the other defendants, and as to the extent to which Jenkens was responsible for the representations made by their alleged co-conspirators. Finally, even at the damages stage, there are many common issues of law, including whether the allegedly excessive fees paid to Jenkens for their opinion letters and advice are recoverable. The requirement of commonality is thus easily met here.

         c. Typicality

          The Denney, Camferdam, and Riggs Plaintiffs, like all class members, received legal advice from Jenkens regarding the tax strategies, and executed those tax strategies. All proposed class representatives allege that they were injured by the same acts of Jenkens and by the same alleged conspiracy as the rest of the class. The fact that some class members were approached by different Marketing Participants does not defeat typicality. " When it is alleged that the same unlawful conduct was directed at or affected both the named plaintiff and the class sought to be represented, the typicality requirement is usually met irrespective of minor variations in the fact patterns underlying individual claims."

         d. Adequacy

         No objector challenges the adequacy of the class representatives' counsel. There can be no question that class counsel are highly experienced, qualified and able, and have been zealous in their prosecution of this case.

          The Harslems challenge the adequacy of the proposed class representatives, arguing that the proposed class is divided by a conflict of interest. The Denney Plaintiffs, the Harslems argue, were introduced to COBRA by the accounting firm of Pasquale & Bowers, while the Harslems were introduced to the scheme by Ernst & Young. Pasquale & Bowers is a small, local firm, while Ernst & Young is one of the world's largest accounting and financial services firms. Therefore (the Harslems' argument runs) because Jenkens " represent[s] the only ‘ fat wallet’ to the Denney [Plaintiffs]," the Denney Plaintiffs are only concerned with maximizing their recovery from Jenkens. The Harslems, by contrast, are mainly concerned with their recovery from Ernst & Young, " a wrong-doer with far deeper pockets" than either Jenkens or Pasquale & Bowers. The Harslems object to the judgment credit provision in the proposed settlement, which is a necessary concession to secure a settlement with Jenkens, but might limit their recovery from Ernst & Young. Even without the proposed judgment credit provision, however, settlement with Jenkens would still affect the rights of class members against joint tortfeasors, because many states have statutory judgment credit rules. The Harslems argue that they and the class representatives therefore have fundamentally opposed interests with respect to a settlement with Jenkens: the Harslems argue that they, and similarly situated class members, would prefer not to put their recovery from deep pocketed third parties at risk by settling with Jenkens, while the Denney Plaintiffs have nothing to lose by such a settlement.

         The Harslems' argument would be compelling, were it supported by the facts; but it is not. First, all class representatives (and almost all class members, including the Harslems) have claims against Deutsche Bank, another deep pocket who acted (in most cases) as the counter-party to the tax shelter transactions and is alleged to have been a part of the conspiracy. Second, the Denney Plaintiffs were introduced to COBRA not only by Pasquale & Bowers, but also by the undeniably deep-pocketed BDO. The Camferdam Plaintiffs, joined in this action as class representatives, were introduced to the scheme by Ernst & Young, and are in essentially the same position as the Harslems. Jack Riggs was introduced to the scheme by Deutsche Bank, and used Ernst & Young to prepare his tax returns. Thus, all of the class representatives have claims against deep-pocketed third parties, similar to those of the Harslem Plaintiffs, which will be affected equally by the settlement with Jenkens. The interests of the class and its representatives are therefore aligned: in agreeing to the judgment credit provision, each class member and their representatives are making an equal concession, in return for an equal share of the benefits of the settlement.

          The Matteis raise a different potential conflict. They assert that there is an irreconcilable conflict between class representatives and some class members because the former have been injured as a result of penalties assessed by the tax authorities, while the latter have not yet suffered any injury although penalties may be assessed against them in the future. The Matteis argue that this " is reminiscent of the conflict that plagued the proposed settlement class in Amchem." For the following reasons, this argument is unavailing.           In Amchem, the Supreme Court addressed a challenge to approval of a settlement class in a large consolidated asbestos litigation. The " sprawling" and " amorphous" class included both injured plaintiffs and plaintiffs who had been exposed to asbestos but who had not yet manifested any injury. The Court held that the class representatives could not adequately represent both groups of plaintiffs.

In significant respects, the interests of those within the single class are not aligned. Most saliently, for the currently injured, the critical goal is generous immediate payments. That goal tugs against the interest of exposure-only plaintiffs in ensuring an ample, inflation-protected fund for the future.

         There were several problems with the proposed settlement class in Amchem. First, the exposure-only plaintiffs might never suffer an injury or might manifest an injury decades after the settlement. Second, if they did eventually suffer an injury, the magnitude of that injury was impossible to assess at the time of the settlement. As noted by the Third Circuit, those who were not yet injured faced " vastly different outcomes." Finally, because of the size of the class and the uncertainty as to whether some potential claimants would ever be damaged, it was difficult or impossible to ascertain class members and provide adequate notice to all putative class members, many of whom may not have been aware that they were exposed to asbestos.

         None of these problems plague the class now before this Court. First, members of this class have been identified as all those who received tax advice from the Jenkens defendants, and implemented the tax strategies in whole or in part, during a fixed time frame, between January 1, 1999 and December 31, 2003. Each of those 1,076 class members has received notice of the settlement. Thus all class members are known to the settling parties and have been identified. Second, all class members have suffered a cognizable injury because they paid (allegedly) excessive fees for (allegedly) negligent or fraudulent tax advice. While it is true that some class members do not yet know the full extent of their injury, because they may yet be assessed penalties by the IRS, the cut-off for such assessments is rapidly approaching. The IRS must assess a tax deficiency within three years after the return is filed. Thus, all injuries can be determined within a finite period of time. Because all groups of plaintiffs, both the audited and the unaudited, have already manifested some injury, and because even the unaudited will be audited soon, if they are audited at all, they share a common interest in obtaining some recovery at this time.

          It is always possible to identify potential class conflicts. For example, some plaintiffs have a greater or lesser tolerance for facing the risks of trial versus settlement. The Second Circuit has noted that " not every potential disagreement between a representative and class members will stand in the way of a class suit." Rather, " the conflict that will prevent a plaintiff from meeting the Rule 23(a)(4) prerequisite must be fundamental." There are no such fundamental conflicts here.

         2. Rule 23(b)(3)

         a. Predominance

          The Harslems argue that common issues do not predominate over individual ones. First, the Harslems observe that different class members were introduced to the scheme by different Marketing Participants, and argue that the resulting factual differences among class members' claims defeat predominance. Second, they argue that the claims asserted " are ill-suited for class treatment because the strength of the claims depends on very individual factual inquiries," in particular with reference to reliance. Third, they point to differences in levels of sophistication among class members. Finally, they argue that the fact that many different states' laws could apply to these claims prevents a finding of predominance. None of these arguments is persuasive.

         Despite the factual differences pointed to by the Harslems, " the issues in the class action that are subject to generalized proof, and thus applicable to the class as a whole ... predominate over those issues that are subject only to individualized proof." The core issues in class members' claims against Jenkens relate to Jenkens' representations to the class members, in particular the opinion letters. Jenkens' opinion letters were substantially identical. The legal advice given by Jenkens regarding the tax strategies was always the same. Thus, generalized proof-the opinion letters, and other evidence of Jenkens' legal advice-could be used to establish liability. Although different plaintiffs dealt with different accounting firms, it is Jenkens' conduct toward plaintiffs that would be relevant to the determination of liability, and that conduct was essentially the same with respect to all class members. Jenkens' liability toward all class members turns on the same questions of law and fact identified above-most significantly, whether the advice was negligently given, or knowingly false.

         The fact that class members relied not only on Jenkens' representations to them, but also on the representations of several different accounting firms, does not defeat predominance. In Moore v. PaineWebber, Inc., the Second Circuit held that class certification for fraud-based claims could be proper where the misrepresentations made to each member of the class were materially uniform, and reliance could thus be " established by generalized proof." The Moore court further held that even oral misrepresentations, made by different sales agents, could be considered materially uniform, even in the absence of proof that the misrepresentations followed a specific script.

          Here, as noted, Jenkens' most important representations-in the form of their opinion letters-were both written and materially uniform. It is these representations that are at the core of the case, and would predominate in plaintiffs' attempts to prove liability. Insofar as the case turns on oral representations, it appears that those representations were also materially uniform. Although the form of the representations may have varied, the basic pitch was always the same: that the tax shelters were legitimate and supported by independent legal advice, and that plaintiffs would not face penalties. The only difference the Harslems point to is that they were (allegedly) informed that " their chances of being audited were next to nothing" while other plaintiffs were informed that they might be audited, but that the shelter was legitimate and that the opinion letter would protect them from penalties. Despite these (alleged) differences in emphasis, the basic message is the same in both cases. Thus, " [a]ll plaintiffs [would] rely on the same or substantially similar documents, statements, and legal theories to prove the defendants' liability."

         With respect to plaintiffs' RICO and conspiracy claims, the predominant issue is the existence of a conspiracy between Jenkens and the other defendants. Moreover, many of plaintiffs' allegations of fraud turn on the alleged conspiracy, insofar as plaintiffs allege that Jenkens purported to be providing " independent" analysis of COBRA when it was in fact deeply involved in COBRA's marketing and design. The existence and nature of this alleged conspiracy is therefore an issue that is common to each plaintiff, and predominates over the differences among different groups of plaintiffs who were introduced to the alleged conspiracy by different accounting firms.

         Common issues also predominate with respect to plaintiffs' claims that Jenkens' fees were excessive and unreasonable. The burden of this claim is that Jenkens charged high fees for advice and opinion letters which were " canned' and ‘ prefabricated’ [and] used with hundreds, if not thousands, of other clients and ... the Jenkens Defendants charged these clients the same or similar fees for the same services and expended little, if any additional time or effort in providing the opinion letters and advice." In proving this claim, each plaintiff would necessarily rely primarily on the same proof of Jenkens' course of conduct; each plaintiff would have to prove that Jenkens provided essentially identical advice and opinion letters to other plaintiffs, and the marginal cost of providing the advice was therefore very low.

          The Harslems also argue that predominance fails because class members had varying levels of sophistication regarding tax law. In any fraud-based class action, there will be differing levels of sophistication among plaintiffs; nevertheless, the Supreme Court has clearly stated that " [p]redominance is a test readily met in certain cases alleging consumer or securities fraud." This argument arises frequently in the context of securities fraud; in that context, courts have consistently held that differences in levels of sophistication are not sufficient to defeat predominance. It is important to note that, regardless of differing levels of sophistication, each plaintiff in this case could prove reliance by the same common evidence. Although some plaintiffs may have known more about tax matters than others, all plaintiffs relied on the advice of their accountants and lawyers on tax matters of great complexity; even a sophisticated plaintiff could be found to have reasonably relied on such advice.

         Finally, the Harslems argue that " when the law of a claim varies by state, and when putative class members are dispersed across 41 states ... predominance must fail as a matter of law." This argument is unavailing. Because this is a settlement-only class, the Court need not be concerned with the feasibility of managing the trial of a class action involving many different states' laws. While " there may be situations where variations in state laws are so significant so as to defeat commonality and predominance even in a settlement class certification," that is not the case here.

          First, I note that many of the key issues here are matters of federal law; for example, plaintiffs' RICO claims. Second, many of plaintiffs' most significant state law causes of action may be governed by a single state's law, that of Illinois. In determining which state's law to apply, a federal court looks to the choice of law rules of the state in which it sits. Under New York's choice of law rules, a court gives controlling effect to the law of the jurisdiction with the most significant interest in the specific issues involved in the dispute. A state has a paramount interest in regulating the conduct of attorneys licensed to practice within its borders. Plaintiffs' claims for malpractice (and related claims, such as negligent misrepresentation, and disgorgement of excessive fees) would therefore likely be governed by the law of Illinois.

          Even insofar as plaintiffs' claims would require the application of varying state laws, the variations are not so great as to defeat predominance. " When a class action raises common issues of conduct that would establish liability under a number of states' laws, it is possible for those common issues to predominate and for class certification to be an appropriate mechanism for handling the dispute." Plaintiffs' state law claims turn largely on issues of federal tax law: e.g., was Jenkens' advice reasonable in light of published IRS Notices and federal tax law? The basic principles that will determine liability on class members' common law claims will not vary substantially from state to state. For example, plaintiffs' breach of contract claims turn on general principles of contract interpretation, which tend to be uniform among the states. Even if plaintiffs' malpractice claims are not governed by Illinois law, the elements of plaintiffs' malpractice claims are substantially uniform. An attorney is held to the standard of care of a practitioner in his or her field: because Jenkens was engaged in the same practice with respect to each class member, it is likely that, regardless of the applicable state law, Jenkens would be held to a uniform standard of care-that of a practitioner in federal tax law. Thus, although there may be some variations in applicable law, particularly with respect to damages, the variations are not so great as to defeat predominance.

         b. Superiority

          Although class members' individual claims are substantial, and individual resolution of these claims would not be impossible, it is clear that class-wide resolution would be the superior method. The pressure of a thousand individual lawsuits would, in all probability, cause Jenkens to collapse and file for bankruptcy. The total value of plaintiffs' claims greatly exceeds Jenkens' available assets, the value of which would be substantially reduced in bankruptcy. Jenkens' insurance, the only significant asset which plaintiffs could pursue, is a " wasting policy," which is eroded by the cost of defense. Moreover, if Jenkens were to file for bankruptcy, the firm's carriers would be " relieved of concerns of a ‘ bad faith’ claim for failing to settle within policy limits leading to the destruction of a going concern enterprise" and would be free to assert coverage defenses. The likely outcome of a thousand individual suits, then, would be that at most only the first few plaintiffs at the front of the race to the courthouse would recover anything.

         B. Approval of the Settlement

         1. The Procedural Fairness of the Settlement

          This settlement is the product of extensive, protracted, arm's length negotiations by experienced and capable counsel. There is no indication of collusion between Lead Counsel and Jenkens; indeed, on more than one occasion, it appeared that negotiations would break down. The concerns and objections of opt outs were a significant factor in negotiations, and resulted in important improvements in the settlement as late as December, 2004. The parties reached their final settlement only after the plaintiffs had conducted months of merits and confirmatory discovery. The presence of a court-appointed special master during the December 2004 negotiations helped ensure that the proceedings were free of collusion or undue pressure. For these reasons, the proposed settlement is entitled to a strong presumption of fairness.

         2. The Grinnell Factors

          Application of the Grinnell factors weighs in favor of acceptance of the settlement. First, litigation of these claims would be highly complex and expensive. Plaintiffs allege a huge and intricate conspiracy between Jenkens and a large number of global financial and legal institutions, over the course of years. The investigation of such a claim, putting aside trial costs, would be exceedingly complex and expensive. Moreover, the underlying claims involve complicated tax transactions. A central issue in the case is whether Jenkens knew or should have known that COBRA was contrary to established law and published IRS Notices. If this case were to be tried, both sides would be heavily dependent on tax law experts, further compounding the expense and complexity of the case. The burden on the parties would be significant.

          Second, the reaction of the class has been generally positive. Out of over one thousand class members, three groups, comprising nine class members, have objected, and a further eighty-nine plaintiffs have opted out. Even after the Court gave a third and final round of notice and objections, no class member raised any complaint apart from the nine who had objected previously. This reflects a rejection rate of less than 10%. Courts have frequently found this factor to be satisfied in the face of similar or higher levels of dissent. I find the low level of dissent in this case particularly striking given the fact that each class member's individual claim against Jenkens is substantial; these are not plaintiffs who would remain silent if the settlement was unfair.

          The third factor looks to " the stage of the proceedings and the amount of discovery completed[; these] are important factors to consider in order to ensure that plaintiffs have had access to material to evaluate their case and assess the adequacy of any settlement proposal." Here, the parties reached a tentative settlement agreement at an early stage in this litigation, prior to discovery. However, pursuant to the parties' stipulation of settlement, Jenkens provided the class with extensive discovery. Jenkens has produced approximately 70,000 documents relating to the merits of the class claims and the financial status of Jenkens. Lead counsel have conducted extensive interviews with Jenkens witnesses, including the individual Jenkens defendants. Plaintiffs thus " have a clear view of the strengths and weaknesses of their cases" and of the adequacy of the settlement.

         As to the fourth and fifth factors, the risks of establishing liability and damages are significant. In assessing this factor, the Court is not required to " decide the merits of the case or resolve unsettled legal questions" or to " foresee with absolute certainty the outcome of the case." " [R]ather, the Court need only assess the risks of litigation against the certainty of recovery under the proposed settlement." Here, Jenkens has substantial defenses to all of plaintiffs' claims. Jenkens notes, in particular, the " limited ‘ more likely than not’ nature of the opinions," and the fact that many other law and accounting firms gave similar opinions, which it argues will make it hard to demonstrate a breach of the standard of care. Jenkens also argues that the class members-millionaire tax avoiders-make unsympathetic plaintiffs, and that there is a substantial possibility that they will be found to be more than 50% at fault themselves. Even if plaintiffs were able to prove liability, many of plaintiffs' significant items of damages may not be recoverable. For example, plaintiffs may not be able to recover for back taxes or interest on back taxes.

          Sixth, there is some risk of maintaining class status throughout trial. Were this action to proceed to trial, proving reliance and damages might prove unmanageable. This is especially true in light of the fact that, unlike in many class actions, plaintiffs could bring these claims individually; thus, the superiority of class action treatment would be hard to establish if this case were to be litigated.

         The seventh factor requires the Court to examine the ability of the defendant to withstand a higher judgment. This factor " does not require that the defendant pay the maximum it is able to pay." The test takes into account the possibility that, if the case were to go to trial, the defendant would not be able to survive. " The purpose behind this consideration is to determine whether defendant could withstand a judgment significantly higher than the settlement figure, assuming the case were litigated.... If a higher judgment would excessively impact the company's shareholders or would jeopardize the company's survival, this factor weighs in favor of approving the settlement."

          Jenkens' contribution to the settlement is $5.25 million-" over 5% of equity shareholder profits last year." Although this contribution may not seem large, given the magnitude of plaintiffs' claims, Jenkens may not be able to withstand a greater judgment. Jenkens is already in a weakened condition, facing severe retention problems. Jenkens argues, persuasively, that it could not contribute more to the settlement without causing more lawyers to leave the firm, likely resulting in the firm's collapse: " [a]lready unstable, the firm cannot ask its shareholders to [contribute] more and expect them to decline offers from competitors." If the case were to go to trial, the firm would be unlikely to survive. Given Jenkens' position, it does not appear that the firm could withstand a significantly greater judgment.

         I am less convinced that the individual defendants' contributions are reasonable in light of their ability to withstand a greater judgment. However, the individual defendants' potential contributions are relatively minor compared to the available insurance. Moreover, the individual defendants might well succeed on their claim that they are entitled to full indemnification from Jenkens. The low contributions from individual defendants do not render the settlement unfair when weighed against all other considerations.

         Finally, the eighth and ninth factors-the range of reasonableness of the settlement fund in light of the best possible recovery and the range of reasonableness of the settlement fund in light of all the attendant risks of litigation-weigh in favor of the settlement. Plaintiffs' best possible recovery is limited, given the likelihood that, absent this settlement, Jenkens would fail and declare bankruptcy, and the only available assets would be insurance-an uncertain source of recovery, given the carriers' coverage defenses. Moreover, class members' claims, in the aggregate, greatly exceed the available insurance or Jenkens' assets. Absent a settlement, only the first few plaintiffs in line, at best, would recover anything. There is also a significant possibility that class members would not prevail if this case were to go to trial.

         Although the settlement fund by itself represents a fair and reasonable recovery, I note that the settlement also includes significant non-monetary benefits. Pursuant to the settlement, Jenkens has agreed to provide (and has already provided) discovery on plaintiffs' claims. The value of this agreement is hard to determine, but it is not negligible.

         For the foregoing reasons, I find that the settlement is fair and reasonable. I will, however, discuss the specific objections made to certain provisions of the proposed judgment.

         3. Non-Settling Defendants' Objections to the Bar Order

          Non-settling defendants BDO, joined by Deutsche Bank, object to the bar order and judgment credit. Although " [i]n a class action settlement, the normal focus is on the fairness, reasonableness and adequacy of the settlement to the plaintiff class ... [w]here the rights of third parties are affected [ ] their interests too must be considered.... Moreover, if third parties complain to a judge that a decree will be inequitable because it will harm them unjustly, [s]he cannot just brush their complaints aside."

          Such bar orders are common in class action settlements. " If a non-settling defendant against whom a judgment had been entered were allowed to seek payment from a defendant who had settled, then settlement would not bring the latter much peace of mind." Because federal policy strongly favors settlement, especially in complex litigation, courts may approve a bar on contribution claims between the settling defendants and the non-settling defendants, " so long as there is a provision that gives the non-settling defendants an appropriate right of set-off from any judgment imposed against them." If courts were not able to limit the liability of settling defendants through bar orders, " it is likely that no settlements could be reached."

         Nonetheless, " [a] settlement bar should not be approved unless it is narrowly tailored and preceded by a judicial determination that the settlement has been entered into in good faith and that no one has been set apart for unfair treatment." In assessing the fairness of a bar order, a court may weigh relative fault, the likelihood of a plaintiff's success at trial, and the adequacy of the resources of the most culpable party to ensure that " a settling defendant escapes neither the responsibility for his wrongdoing nor, therefore, the deterrent effect which underlies the right to contribution."

         The order proposed here leaves the calculation of the judgment credit to the applicable law of the various jurisdictions in which a class member may bring a claim. BDO urges the Court to impose, on all cases the class members may bring, the capped proportionate share judgment credit approved in Gerber v. MTC Electronic Technologies. Although the Gerber court approved that approach, it does not require it, and a " one-size-fits-all" judgment credit is neither required nor appropriate here.

         " There may [ ] be instances in which a settlement may be approved without the identification of a specific judgment reduction provision." In In re Ivan F. Boesky, the Second Circuit approved a judgment credit that required class members to " reduce or satisfy any judgment against a nonsettling defendant to the extent necessary to extinguish any claims of such non-settling defendant for indemnity or contribution from [the settling defendants], as may be determined by the Court or jury." The court noted that

[t]he precise methods of judgment reduction to be employed are left to a time when, if ever, judgments against particular nonsettling defendants are obtained. Deferring these issues avoids the enormous complexities of hypothesizing findings of fact and law regarding future litigation against nonsettling defendants.... Claims by nonsettling defendants for contribution or indemnification may raise issues as to the legal basis for the particular judgment and the precise facts found. Moreover, choice-of-law questions may preclude use of a single judgment-reduction method for each nonsettling defendant. Other complexities may arise that are not evident at this time and on this record.

          Here, class members have already brought numerous actions, on a variety of state law and federal law theories, in jurisdictions all over the nation, against non-settling defendants and numerous other third parties. To impose a single method of judgment reduction on all claims that have been or might be brought by class members, in any court or tribunal, regardless of the applicable law, would be not be appropriate. Non-settling defendants and third parties will be fully compensated for the loss of their contribution claims: the order ensures that they will receive a judgment credit at least equal to the contribution claim they might otherwise assert. To force the settling parties to accept a judgment credit provision that would provide BDO with a credit that is potentially greater than the value of the contribution claims it might otherwise have been able to assert-as BDO suggests-would give BDO a windfall, and would be an impediment to settlement. Moreover, forcing courts all over the country to follow a particular method of judgment reduction, which may conflict with their own policies and procedures, would be an unwarranted interference with their proceedings.

         This settlement was the result of aggressive, arm's length bargaining. Given the limits on Jenkens' ability to withstand a greater judgment, I have found the settlement to be fair. There is no indication that BDO or other non-settling defendants have been treated unfairly. I also note that while BDO argues that the bar order is too generous to class members, the Harslem Plaintiffs argue that it is too generous to non-settling defendants. Such conflicting objections suggest that the provision strikes the proper balance.

         4. The Harslem Plaintiffs' Objections to the Judgment Credit

         The Harslem Plaintiffs also object to the judgment credit provision. First, the Harslem Plaintiffs object on the ground that the judgment credit's impact falls unequally on different groups of class members, being especially unfair to those who have claims against deep-pocketed third parties. As I explained earlier, this argument is not supported by the facts. All Lead Plaintiffs, like the Harslem Plaintiffs, have essentially identical claims against deep-pocketed third parties, and will also suffer the impact of the judgment credit provision. In accepting the judgment credit provision, all plaintiffs have made a reasonable concession, necessary to secure the benefits of settlement.

         The Harslem Plaintiffs also argue, citing National Super Spuds, Inc. v. New York Mercantile Exchange , In re Auction Houses Antitrust Litigation , and Wal-Mart Stores, that the judgment credit provision is an impermissible attempt to impair claims " non-class claims outside the factual predicate for the settlement." This argument is unavailing.

          The authority cited by the Harslem Plaintiffs stands for the proposition that courts may not approve a settlement that releases claims that are not based on the identical factual predicate as those asserted by the class; however, " class action releases may include claims not presented and even those which could not have been presented as long as the released conduct arises out of the ‘ identical factual predicate’ as the settled conduct." In In re Auction Houses (an unpublished summary order) the Second Circuit expanded the reach of this doctrine, holding that Super Spuds requires rejection of a settlement which " merely impairs, rather than extinguishes" claims held only by a subset of the class, and arising out of a different factual predicate. The settlement in that case contained a provision which prohibited class members from bringing certain non-class claims in United States courts, though it allowed them to be brought elsewhere. The subset of the class who held those non-class claims received no additional compensation. Although the non-class claims were not extinguished, but only impaired,

the impairment is an ‘ uncompensated sacrifice of claims of members ... which were not within the description of claims assertable by the class.’ That the impairment may be slight is of no moment, as we cannot say that it is valueless ... yet it is exacted without any compensation whatsoever.

         This doctrine is not applicable here. Class Members' claims against third parties have not been released, nor, within the meaning of In re Auction Houses, impaired without compensation. The Harslem Plaintiffs may still bring their claims against Ernst & Young; the judgment credit provision will only affect their claims against third parties to the extent that plaintiffs have already been compensated for damages arising out of those claims by Jenkens. The contribution law of the majority of states would reduce the Harslem Plaintiffs' claims against third parties even if the settlement contained no judgment credit provision.

         If courts were to accept the Harslem Plaintiffs' argument that a judgment credit provision is an impermissible impairment of claims against third parties, this would create a serious obstacle to any settlement. There could never be a bar order and judgment credit provision in any partial settlement in which some of the plaintiffs also brought the same claims against different third parties-a not uncommon situation in class actions alleging a conspiracy among multiple defendants. Without the possibility of a bar order, partial settlement in such cases would be extremely unlikely.

         The Second Circuit has explained that " at the heart of our concern [in National Super Spuds ] was the danger that a class representative not sharing common interests with other class members" would sacrifice the interests of those other class members. That is not the case here. The Harslem Plaintiffs' interests with respect to the judgment credit provision are aligned with those of class representatives. The judgment credit provision is part of the price of the settlement for all class members: the settlement fully compensates the Harslem Plaintiffs, like every other class member, for accepting the provision.

         5. The Government's Objection to Paragraph 14

         The Government objects to Paragraph 14 of the proposed order. Paragraph 14 provides that:

Neither this Judgment, the Stipulation of Settlement, nor any act performed or document executed pursuant to or in furtherance of the Stipulation of Settlement: (i) is or shall be deemed to be or shall be used as an admission of, or evidence of, the validity of any Released Claims or any wrongdoing by or liability of any Released Persons; (ii) is or shall be deemed to be or shall be used as an admission of, or any evidence of, any fault or omissions of any Released Person in any statement, release or written document or financial report issued, filed or made; (iii) shall be offered or received in evidence against any Released Person in any civil, criminal or administrative action or proceeding in any court, administrative agency, arbitral or other tribunal other than such proceedings as may be necessary to consummate or enforce the Stipulation of Settlement, the releases executed pursuant thereto, and/or the Judgment, except that the Stipulation of Settlement and the Judgment and the Exhibits thereto may be filed in the Litigation or in any subsequent action brought against any of the Released Persons in order to support a defense or counterclaim of any Released Person of res judicata, collateral estoppel, release, good faith settlement, judgment bar or reduction, or any other theory of claim or issue preclusion or similar defense or counterclaim, including without limitation specific enforcement of the settlement embodied in the Stipulation of Settlement by way of injunctive relief.

         The Government objects to this paragraph on the ground that " it is not appropriate for this or any Court to determine, in the abstract, the admissibility or use of documents or acts in other proceedings."

         At the Government's request, the settling parties have inserted language into the proposed judgment which provides that " [n]othing in this Judgment prejudices or limits in any way the right of the Government of the United States to obtain or use information," and furthermore, that " [n]othing in this Judgment or in any agreement of the parties that relates to the admissibility of evidence shall apply to or be binding on the Government or any federal administrative agency, or shall be binding on any court with respect to the Government or any federal administrative agency." The Government concedes that these provisions are sufficient to protect the Government's interests. The Government therefore has no standing to object to paragraph 14. Moreover, the Government offers no authority in support of its objection. Provisions such as paragraph 14 are common in judgments accompanying class action settlements. Such orders may be necessary to encourage settlement. The parties who are most likely to be affected by this provision-non-settling defendants and third parties-have raised no objection to it. The Government's objection is therefore overruled.

         C. Adequacy of the Notice

          Rule 23(c)(2)(B) requires that " for any class certified under Rule 23(b)(3), the court must direct to class members the best notice practicable under the circumstances, including individual notice to all members who can be identified through reasonable effort." The notice must inform each class member of the nature of the action and the class certified, and that " he has the right to exclude himself from the action on request or to enter an appearance through counsel, and further that the judgment, whether favorable or not, will bind all class members not requesting exclusion." It is not necessary that every class member receive actual notice, so long as class counsel acted reasonably in selecting means likely to inform persons affected. Rule 23(c)(2)(B) specifies certain information that a class notice in a Rule 23(b)(3) action must contain, including (i) the nature of the case, the class definition, and the claims, issues, or defenses in the action, (ii) class members' right to exclude themselves from the class, (iii) the binding effect of a class judgment on all class members who do not request exclusion, and (iv) class members' right to object to the partial settlement and appear through counsel.

         In addition, Rule 23(e)(B) requires that " the court must direct notice in a reasonable manner to all class members who would be bound by a proposed settlement, voluntary dismissal, or compromise."

There are no rigid rules to determine whether a settlement notice to the class satisfies constitutional or Rule 23(e) requirements; the settlement notice must fairly apprise the prospective members of the class of the terms of the proposed settlement and of the options that are open to them in connection with the proceedings. Notice is adequate if it may be understood by the average class member.

         Due to confidentiality concerns, the notices sent to class members were mailed directly by Jenkens. On June 29, 2004, Jenkens mailed notice to the last known addresses of 1286 persons. This notice clearly stated all of the information required by Rule 23(c)(2)(b). Class members were given 136 days to opt out of the settlement, a more than adequate allowance of time. The notice clearly informed class members of the terms of the settlement. Class Counsel published a Summary Notice in the Wall Street Journal on the same day.

         On December 29, 2004, following the amendments to the settlement in December, 2004, Jenkens mailed a supplemental notice to all class members who had not previously opted out. The notice clearly described the nature of the changes to the settlement, and included the original and the amended mediated settlement agreements. The supplemental notice informed class members that the deadline for objections was extended by one week. Simultaneously, Class Counsel published a summary of the notice in the Wall Street Journal. Finally, because the settlement proponents made minor changes to the language of the proposed judgment to accommodate objections, Jenkens, at the Court's instructions and in an excess of caution, mailed a third round of notice to all class members (individually, or to counsel if known), containing the final proposed judgment and extending the time frame for objections.

         The notice was thus more than adequate, both procedurally and with respect to its content.

         C. No Further Opt-Out Opportunity Is Required

         1. Rule 23(e)(3)

          The Harslem, Moore and Mattei plaintiffs (" the objectors" ) argue that the Court should grant them a second opportunity to opt out. Under the new Rule 23(e)(3), a court is permitted to allow class members a second opportunity to opt out. This is a matter for the Court's discretion; the objectors have failed to show any reason for the Court to exercise its discretion to permit such an opportunity.

          The Advisory Committee Note to Rule 23(e)(3) states that " [m]any factors may influence the court's decision [to grant a second opt-out]. Among these are changes in the information available to class members since expiration of the first opportunity to request exclusion." The objectors argue that the information available to them has changed since the expiration of the original opt-out date. However, the proposed settlement has only improved since the June 28 Notice: the settlement fund is now $6.56 million larger, and to be divided among 89 fewer class members. Nevertheless, the objectors argue that the relative attractiveness of opting out has also changed. In the original settlement, no insurance funds were allocated to the defense of opt-out claims; in the amended settlement, the insurers have set aside $25 million (with the possibility of another $25 million in reinstated coverage) to defend or settle the claims of opt-outs. Therefore, the objectors argue that opting out now presents a more attractive prospect.

         Rule 23(e)(3) was not meant to require an automatic second opt-out whenever a proposed settlement is amended after the close of the first opt-out period. The Advisory Committee Note makes it clear that a change in information about the settlement is only one factor to be considered in informing the exercise of the court's discretion. Rule 23(e)(3) was intended to be applied sparingly, to a limited number of cases, and in particular to cases where the first opt-out period closed prior to reaching a settlement:

The rules committees also believe that providing a second opt-out opportunity in a limited number of cases, when warranted, will not be unduly disruptive to settlement. It will make a difference only in cases in which the class is certified and the initial opt-out period expires before a settlement agreement is reached. It is irrelevant in the many cases in which a settlement agreement is submitted to the court simultaneously with a request that a class be certified. In the cases in which it might be used, moreover, the court retains broad discretion.

         Both before and after the 2003 amendments, courts have consistently rejected arguments that due process requires a second opportunity to opt out when the final terms of a proposed settlement become known-even in those cases where the initial opt-out period expires before a settlement agreement is reached. " [T]o hold that due process requires a second opportunity to opt out after the terms of the settlement have been disclosed to the class would impede the settlement process so favored in the law." Rule 23(e)(3) was not intended to alter this sound policy by mandating a second opt out opportunity every time parties renegotiate their settlement in any respect.

         Here, the June 28 Notice clearly apprised all class members of the terms of the settlement. There has been no material change in the settlement adverse to the class: the proposed settlement has only improved since the June 28 Notice. The fact that Jenkens has subsequently negotiated with its insurers for money to defend the claims of opt-outs is a matter outside the proposed settlement, and cannot justify a new opt-out period. A number of class members, with the same information as Objectors, took the gamble of opting out prior to the close of the first period, taking the risk that Jenkens would be unable to find resources to meet their claims; Objectors chose not to take that risk.

          Objectors are a tiny minority of the class, who chose not to opt out of the class in a timely manner. If the Court were to grant a second opt out opportunity, the resulting delay and uncertainty would pose significant risks of killing the settlement and driving Jenkens into bankruptcy, depriving the vast majority of the class of the benefits of settlement. The Objectors' request for a second opt out opportunity pursuant to Rule 23(e)(3) is therefore denied.

         2. Excusable Neglect

          Claiming " excusable neglect," certain objectors ask that the Court permit them to opt out of the class on an individual basis. They argue that their failure to opt out in a timely fashion should be excused because they failed to comprehend the judgment credit provision as described in the notice, and because the information on which they relied in choosing to remain in the class has changed since the end of the first opt out period.

         Pursuant to Rule 60(b)(1), Rule 60(b)(2), and Rule 23(d), courts have the power to grant an extension of the time to opt out on a showing of " excusable neglect." The movant must show " both good faith and a reasonable basis for not acting within the specified period." " Even upon a finding of excusable neglect, it remains within the district court's sole discretion whether or not to grant the extension." Courts rarely grant such extensions, recognizing that " granting leave to file untimely exclusions would undermine the finality of judgments entered therein and would discourage settlement of such actions. Defendants would be loath to offer substantial sums of money in compromise settlements of class actions unless they can rely on the notice provisions of Rule 23 to bind class members." So, for example, courts have refused to permit an extension of the opt-out period on the basis of " excusable neglect" even in cases where a class member never received notice, so long as the notice was sent out by means that comport with due process.

         Objectors have failed to show excusable neglect. The notice clearly stated that the settlement would impose a judgment credit in actions against non-settling defendants and third parties. Objectors' failure to comprehend that provision-even if genuine and in good faith-does not constitute excusable neglect. Objectors' argument that they should be permitted to opt out because of changes to the settlement's terms is more properly treated as a request for a general second opt-out opportunity for the class as a whole under Rule 23(e)(3); to the extent the available information has changed, it has changed for the entire class, not simply objectors. Objectors' request is therefore denied.

         3. Preliminary Certification Was Proper

          At the Fairness Hearing, the Mattei Plaintiffs raised a third argument for a second opt-out opportunity. The original notice to the class was sent out pursuant to the Court's May 2004 order preliminarily certifying the class. The Mattei Plaintiffs argue that, following the 2003 amendments to Rule 23, a court no longer has the power to preliminarily certify a settlement class; therefore, the previous notice and opt-out period was ineffective, and the Court must grant a new notice and opt-out period when the class is finally certified. The Mattei Plaintiffs' argument is creative, but unavailing.

         Prior to the 2003 Amendments, Rule 23(c)(1) stated that " [a]s soon as practicable after the commencement of an action brought as a class action, the court shall determine by order whether it is to be so maintained. An order under this subdivision may be conditional." The 2003 amendments to Rule 23(c)(1)(C) deleted the provision that a class certification " may be conditional." The Advisory Committee Note explains that " [a] court that is not satisfied that the requirements of Rule 23 have been met should refuse certification until they have been met."

         Courts have frequently certified settlement classes on a preliminary basis, at the same time as the preliminary approval of the fairness of the settlement, and solely for the purposes of settlement, deferring final certification of the class until after the fairness hearing. Courts have continued to follow this procedure even after the 2003 amendments came into effect on December 1, 2003. The Manual for Complex Litigation continues to recognize the practice, as do other authorities. In deleting the reference to " conditional" certification, the Committee did not intend to abolish this common and vital practice. The amendment was directed at different problems. The Advisory Committee's report described its concern: " [t]he provision for conditional class certification is deleted to avoid the unintended suggestion, which some courts have adopted, that class certification may be granted on a tentative basis, even if it is unclear that the rule requirements are satisfied." The Committee was troubled by the " fear that emphasis on the conditional nature of a certification order will encourage some courts to grant certification without searching inquiry, relying on later developments to determine whether certification is in fact appropriate."          Rule 23 directs courts to make a decision as to certification " at an early practicable time." The Second Circuit has explained that " [t]he reason for this rule is plain: fundamental fairness requires that a defendant named in a suit be told promptly the number of parties to whom it may ultimately be liable for money damages." The Second Circuit has noted " the onerous effect of failing to decide class certification promptly, finding that a district court's failure to decide class certification ‘ early in the proceedings not only produced below an atmosphere of confusion, but also made [its] appellate review more difficult.’ "

         For these reasons, the Committee was concerned that the conditional certification option might encourage courts to delay undertaking the rigorous analysis required by Rule 23 prior to reaching a certification decision, instead taking the " approach of certify now and worry later." This practice often resulted in confusion and unfairness. Different considerations apply, however, in the context of a settlement class. Where settling defendants and plaintiffs both support certification, there is little danger in a preliminary certification that defers a final certification decision until after the fairness hearing. Preliminary certification of a settlement-only class is not an end-run around a court's duty to conduct a rigorous analysis of the propriety of certification; rather, it is an essential part of the settlement process, and an indispensable tool for the efficient management of complex litigation.

         When a court is presented with a motion for preliminary certification and approval of a proposed settlement, the merits of certification are bound up with the proposed settlement. The Amchem court recognized and accepted the concept of a settlement class, acknowledging that due to the complexity of the class members' claims such a class might not be certifiable in the absence of a settlement because the litigation would not be manageable. Courts must therefore have the ability to preliminarily certify settlement classes that could not be certified if the settlement fails and the case proceeds to trial. At the preliminary approval stage, the settlement is unopposed. The court is not in a good position to make a final decision as to settlement (and therefore certification), because the court has yet not heard any objections. Moreover, after the opt-out period has expired, the settlement's proponents may wish to abandon the settlement or renegotiate the terms; the settlement cannot be fully assessed until the opt-out and objection period has closed. The position advanced by the objectors here would require a court to order final certification of a settlement class, long before it is able to give final approval to the settlement. This makes little sense, as the propriety of certification may depend on whether there is a viable settlement.           The parties also need the flexibility of moving for certification on a preliminary basis. Settling defendants, in particular, must be able to support certification of a settlement class, while being free to oppose certification for litigation purposes if the settlement collapses. If this Court adopted the argument pressed by the objectors, defendants would be required to seek a final and binding certification of the class prior to the onset of the opt-out period and before any objections, taking the risk that the objections may convince the court to reject the settlement, or that opt-outs may be numerous enough to make settlement worthless. This would be a disincentive to settlement.

         These policy considerations explain why, in the settlement context, courts regularly make a preliminary determination as to the propriety of certification, at the same time as the preliminary approval of a proposed settlement, postponing the final decision on certification until the court is ready to evaluate the settlement. These considerations further explain why courts have continued the practice of preliminary certification of settlement classes, despite the 2003 Amendments' disapproval of conditional certification.

         On the other hand, the 2003 amendments should prevent one particularly troubling practice engaged in by some courts. As one leading authority has explained:

In the past, the term " settlement class" was misused to refer to a temporary class approved by the court on a conditional basis, for the limited purpose of conducting settlement negotiations. Courts that made use of this unrecognized type of " settlement class" tentatively assumed the existence of a class in order to permit the parties to negotiate a settlement; and those courts would " conditionally" certify a class without the thorough certification analysis required by Rules 23(a) and (b). Because those courts indulged in the assumption of the class's existence only until a settlement was reached or the parties abandoned the negotiations, those classes were sometimes referred to as " temporary" or " provisional" classes.

         This practice is to be avoided. Assuming the existence of a class, without conducting any preliminary inquiry into whether the Rule 23 requirements are satisfied, in order to permit the parties to engage in " open-ended settlement negotiations" will undoubtedly delay the certification decision. The same authority, however, explicitly recognizes the practice followed in this case.

A true " settlement class" arises when the named parties to an uncertified class action reach a provisional settlement that they wish to make binding on the class as a whole. In those cases, the parties move the court for simultaneous class certification and approval of the settlement. Typically, the court then orders a combined notice of the certification, opt-out rights, and the proposed settlement, and combines the fairness hearing on the proposed settlement with a hearing on class certification. If the settlement is approved and the class is certified, absent class members who do not opt out are bound by the settlement agreement.           In sum: the 2003 amendments to Rule 23 were not intended to prohibit the practice of preliminary certification of settlement-only classes, with final certification to follow after the fairness hearing. However, the amendments were intended to emphasize that, even at the stage of preliminary certification, courts should conduct a rigorous Rule 23 analysis. A court should never merely assume the existence of a class.

         I have discussed this rather technical issue at length because of the recent change to Rule 23 eliminating conditional certification. The important issue from the perspective of the objectors, however, is whether the notice they received provided them with due process. As noted earlier, the notice sent to all putative class members was sufficient in all respects; whether the May 14 Order was preliminary or final does not affect the quality of the notice. The objectors, like other class members, had all the information they needed to make an informed decision as to whether to opt out or remain in the class; they chose to remain in the class and are properly bound by that decision. I have scrutinized the settlement and found it to be fair, reasonable, and adequate, and not a product of collusion or undue pressure. To permit the Mattei Plaintiffs now to opt out of a settlement of which they had full notice (risking the settlement for the overwhelming majority of class members) merely because the class certification was preliminary rather than final would elevate form over substance.

         D. Attorney's Fees

         1. General Principles

          The " equitable" or " common fund" doctrine governing awards of attorneys' fees was established more than a century ago in Trustees v. Greenough. Where an attorney succeeds in creating a common fund for the benefit of a class of plaintiffs, that attorney is entitled to a reasonable fee to be set by the court and taken from the fund.

         While an award of attorneys' fees is justified by the common fund doctrine, the amount of " fees awarded in common fund cases [must] not exceed what is ‘ reasonable’ under the circumstances." Furthermore " [w]hat constitutes a reasonable fee is properly committed to the sound discretion of the district court ... and will not be overturned absent an abuse of discretion, such as a mistake of law or a clearly erroneous factual finding."

         Both the lodestar and percentage of fund methods are available in calculating fee awards in class action settlements. The lodestar method multiplies the number of hours reasonably expended by a reasonable hourly rate for attorneys of similar skill within a given geographic location. " Courts in their discretion may increase the lodestar by applying a multiplier based on factors such as the riskiness of the litigation and the quality of the attorneys." The percentage of fund method is a simpler calculation in that the award is " some percentage of the fund created for the benefit of the class."           Despite the availability of both methods, " the trend in this Circuit is toward the percentage method." Regardless of which method is used, the following Goldberger factors determine the reasonableness of a fee award:

(1) the time and labor expended by counsel;

(2) the magnitude and complexities of the litigation;

(3) the risk of the litigation ...;

(4) the quality of representation;

(5) the requested fee in relation to the settlement; and

(6) public policy considerations.

          Furthermore, " the percentage used in calculating any given fee award must follow a sliding-scale and must bear an inverse relationship to the amount of the settlement. Otherwise, those law firms who obtain huge settlements, whether by happenstance or skill, will be over-compensated to the detriment of the class members they represent." While the Goldberger court recognized the ever increasing use of benchmarks within the 25% range, it cautioned that the use of such benchmarks " could easily lead to routine windfalls where the recovered fund runs into the multi-millions." In cases with recoveries of between $50 and $75 million, courts have traditionally awarded fees in the range of 12% to 20%. Case citations are of limited usefulness, however, as a " fee award should be assessed based on scrutiny of the unique circumstances of each case."

         2. Application of the Goldberger Factors

         Lead Class Counsel, on their own behalf and on behalf of Other Class Counsel Counsel, seek attorneys' fees of $16,310,000 and expenses of $624,484.84. The requested attorneys' fee award alone represents approximately 20% of the $81,557,805 Settlement and is equivalent to 2.04 times the lodestar figure of $7,990,643.50. Lead Counsel argue that such an award is justified based upon the Goldberger factors.

         a. The Time and Labor Expended by Counsel

         Plaintiffs' allegations required extensive pre-filing investigatory work by counsel. Class Counsel undertook an extensive investigation of the tax shelter business and analysis of the applicable law as well as widespread consultation with tax advisors and other experts. The result was the filing of the Denney and Camferdam class actions.

         Five law firms devoted almost 18,800 hours of professional time to investigating, prosecuting and settling the claims. Lead Counsel have been consumed with the litigation and settlement of these two class actions. The following is a list of some of the tasks Lead Class Counsel performed in connection with this litigation:

Interviewed Class Members and their tax advisors Reviewed and analyzed class members' documents

Researched and analyzed relevant law and legal issues

Identified and analyzed defendants' liability and damages for Class Members' claims

Briefed substantial motions and participated in numerous oral arguments

Prepared discovery

Participated in extensive settlement negotiations, including four lengthy mediation sessions

Held extensive conferences with Class Members and their counsel

Reviewed and analyzed over 200,000 documents produced by the J & G Defendants pursuant to the informal " merits" discovery provision of the settlement agreement

Conducted extensive interviews of the Jenkens & Gilchrist defendants as part of the financial " confirmatory" discovery

Reviewed and analyzed financial documents produced by the J & G Defendants as well as Jenkens & Gilchrist's insurance policies

Retained and consulted with tax advisers and other experts

         In short, Class Counsel vigorously and efficiently litigated this case and were successful in reaching a global settlement agreement that is reasonably beneficial to the plaintiff class.

         b. The Magnitude and Complexity of the Case

         This action was complex not only in terms of the procedural requirements associated with major class actions, but the underlying substantive claims involved complicated tax strategies. Class Counsel had to expend significant time learning the complicated tax shelter business in order to prosecute plaintiffs' claims. To succeed, Class Counsel had to understand very sophisticated tax issues. Prosecution of this action was heavily dependent on expert testimony, thereby adding to the complexity of the case. In sum, this is undoubtedly a complex class action litigation.

         c. The Risk of the Litigation

         There was a significant risk that absent a class settlement with Jenkens, the vast majority of Class Members would have recovered nothing from this defendant. This was due, in part, to significant issues regarding defendants' insurance coverage. Another risk was that the pressure of this litigation would force Jenkens to dissolve and file for bankruptcy, thereby frustrating any potential recovery. Thus, two separate sources of risk made the chance of recovering any damages from Jenkens especially speculative.

         d. Remaining Goldberger Factors

         The fourth Goldberger factor-the quality of Class Counsel's representation-is not an issue here as this case was well litigated by very skilled lawyers. Not only did their skill and expertise contribute to the favorable settlement for the class, it contributed to the overall efficiency of the case. The sixth factor is also not an issue as the success of this case should deter others from engaging in this sort of conduct in the future, which benefits society as a whole.

         As to the fifth factor, counsel seek an award of fees and expenses totaling $16,936,084.84 which represents 20.8% of the total Settlement of $81,557,805. This combined award includes attorneys' fees of $16,311,600 which is 20% of the Settlement. While these percentages are not per se unreasonable, although they are at this highest end of the 12 to 20% range of reasonable for settlements in the range of $50 to 70 million, the resulting attorneys' fee award is 2.04 times the lodestar figure of $7,990,643.50. Under the particular circumstances of this case, a multiplier of 2.04 is excessive. Accordingly, the fee award as a percentage of the settlement must be reduced to bring the resulting multiplier in line with what is reasonable.

         3. The Lodestar Cross-Check

          A review of the lodestar computations for the various firms reveals a disproportionate ratio of partner to associate hours expended in this litigation. For example, Deary Montgomery DeFeo & Canada expended 11,413 attorney hours in total. The total number of hours by partners and local counsel billing at $525 per hour is 7,499, which represents approximately 66% of the total. Cory Watson Crowder & DeGaris, P.C. logged in a total of 3,101 attorney hours, 1,947 hours of which are from a partner billing at $525 per hour. That firm's partner hours make up nearly 63% of total attorney hours. Whatley Drake's attorney hours total 2,225.90, of which 910.90 are attributable to partners billing at $550 per hour. At that firm, partner hours constitute approximately 41% of total attorney hours. Finally, all of Stephen F. Malouf's time, totaling 563.4 hours, was billed at his hourly rate of $525 per hour.

         The above analysis reveals that the partners at the firms comprising Class Counsel did not delegate as much of the work to associates as they might have. Thus, the resulting lodestar figure of $7,990,643.50 is somewhat inflated. To permit a fee award amounting to 2.04 times this inflated lodestar figure would be a disservice to the plaintiff class. Indeed, one would be hard pressed to conclude that Class Members would agree to compensate a majority of the work performed at $1,071 per hour, which is what a 2.04 multiplier would do. I therefore conclude that a multiplier of 1.5 is more appropriate under the circumstances. Applying this multiplier to the lodestar figure results in an attorneys' fee award of $11,985,965, which is approximately 15% of the Settlement. Added to this is an award of $624,484.84 for counsel's unreimbursed expenses.

         Accordingly, the total award for attorneys' fees and expenses is $12,610,449.84, which represents approximately 15.5% of the total Settlement funds, which is well within the range of 12 to 20% referred to earlier. The total award includes attorneys's fees of $11,985,965 and unreimbursed expenses of $624,484.84. While the total award is $4,324,035 less than the total amount requested of $16,934,484.84, it is more than sufficient to compensate the attorneys for their labor and their assumption of risk at the beginning of this litigation. As aptly stated by Judge John Gleeson in the Visa Check/Mastermoney litigation, " [i]f [this] amounts to punishment, I am confident there will be many attempts to self-inflict similar punishment in future cases."

         4. The Harslem Plaintiffs' Request For Fees

          Counsel for the Harslem Plaintiffs, the firm of Bondurant, Mixson & Elmore, LLP (" Bondurant" ), request that a portion of the fee award, in the range of 1.5% of the fund awarded to class counsel, be allocated to them. For the following reasons, Bondurant is entitled to a fee, although not in the amount requested.

          It is well settled that objectors have a valuable and important role to perform in policing class action settlements. Accordingly, " they are entitled to an allowance as compensation for attorneys' fees and expenses where a proper showing has been made that the settlement was improved as a result of their efforts." Courts may also consider whether the objectors " aided the court and enhanced the adversarial process by generating debate about issues relating to the proposed settlement which otherwise would not have been discussed." " The trial judge has broad discretion in deciding whether, and in what amount, attorneys' fees should be awarded, since she is in the best position to determine whether the participation of objectors assisted the court and enhanced the recovery."

         Counsel for the Harslems both enhanced the adversarial process, and secured benefits for the class. The Harslems raised a number of significant objections to the settlement and to the propriety of certification. While their objections were ultimately unsuccessful, they served to generate debate and focus the issues before the Court. For example, their objections to the proposed judgment credit helped to refine the parties' and the Court's understanding of this important provision. The Harslems' objections conferred a benefit on the class by forcing the settling parties to clarify the judgment credit provision, removing certain ambiguities that might have worked to the detriment of class members in subsequent proceedings.

         Bondurant is therefore entitled to some compensation. However, the suggested award of 1.5% of the fund awarded to class counsel is excessive. The lodestar value of Bondurant's services is $54,615. Bondurant also incurred expenses of $49,917, for a total in fees and expenses of $104,532.90. An award of 1.5% of the fund awarded to class counsel would amount to $179,784, representing 3.3 times the lodestar value of Bondurant's services, and 1.7 times the combined value of fees and expenses. There is no justification for granting the Harslems' counsel a significantly higher award, relative to their time and expenses, than class counsel. Bondurant did not bear the risk and the expense of the months of intense negotiations leading to this settlement; instead, it " argued the nuances of the settlement during the twilight of this litigation." Although objectors benefitted the class by clarifying ambiguities in the judgment credit provision, they did not achieve any substantive improvements in the settlement. " An appropriate fee award for objectors under these circumstances would compensate counsel for the reasonable fees and expenses actually accrued in pursuit of their objections, nothing more."

         " The fee applicant has the burden of establishing the reasonableness of the expenses it seeks to recover; therefore, a failure to itemize the reasons for substantial expenditures is grounds for a reduction in the amount of an expense award." By far the most substantial of the expenses claimed by Bondurant is the cost of retaining local counsel. This alone accounts for $45,734, and is approximated without any itemization or support. It is impossible for the Court to determine the reasonableness of this expense. On its face, $45,734 appears excessive: the work of drafting the Harslems' objections appears to have been done largely if not entirely by Bondurant. Nevertheless, some of Bondurant's expenditure on local counsel was surely reasonable. I will therefore reduce the requested sum by 50%. This results in a total award of fees and expenses of $81,665.

         The settlement fund for the class is reasonable, but, as a result of Jenkens' vulnerable condition, not particularly generous. As a result, I conclude that the burden of paying the Harslems' fees and expenses should not fall on the class. Accordingly, $81,665 of the $12,610,449.84 award of attorney's fees and expenses is to be allocated to counsel for the Harslems.

         5. Incentive Awards

          Plaintiff request a " modest incentive award" of $10,000 for each of the individual Lead Plaintiffs. " Such awards are not uncommon and can serve an important function in promoting class action settlements." In making these awards, courts generally consider:

the existence of special circumstances including the personal risk (if any) incurred by the plaintiff-applicant in becoming and continuing as a litigant, the time and effort expended by that plaintiff in assisting in the prosecution of the litigation or in bringing to bear added value (e.g., factual expertise), any other burdens sustained by that plaintiff in lending himself or herself to the prosecution of the claim, and, of course, the ultimate recovery.

         In addition, courts consider the relationship between the requested incentive award and the amounts recovered by absent class members under the settlement.

         Class Counsel have stated that Lead Plaintiffs were involved in settlement discussions, and, " while each of these individuals was in a position to capitalize on lawsuits already filed to attempt to get a full or at least far greater recovery for themselves [they] took seriously their role to arrive at a settlement in the best interest of the Class as a whole." In light of Class Counsel's representations, I find that Lead Plaintiffs are entitled to a reasonable incentive award. The requested incentive award of $10,000 is comparable to incentive awards granted in other cases. An award of $10,000 is also proportionate to the amount absent class members will recover under the settlement.

         V. CONCLUSION

         For the foregoing reasons, I hereby approve the proposed settlement as fair, reasonable and adequate, and certify the proposed class. Certification is solely for the purpose of settlement of the class claims against Jenkens. The joint motion of Jenkens and Lead Plaintiffs for entry of final judgment confirming the certification of the settlement class and approving the class settlement is granted. Class Counsel's motion for fees and expenses is granted to the extent stated above. The request of counsel for the Harslem Plaintiffs for fees and expenses is granted to the extent stated above. Lead Plaintiffs' request for an incentive award is granted. Objectors' requests to opt out of the class are denied. The Clerk of the Court is directed to close these motions [# s 173, 181, 187, 188].

         SO ORDERED.

The " Tax Strategies" are defined as: those tax-reducing strategies that are the basis of the Denney, Camferdam and Riggs suits, as well as all other tax-reducing strategies advised upon or opined about by any of the J & G Defendants involving (a) basis-enhancing investment transactions, (b) basis-enhancing derivatives structure, (c) basis leveraged investment swap spreads, (d) hedge option monetization of economic remainders, (e) basis adjustment remainder trust, (f) gain option partnerships, or (g) other basis-enhancing, basis-preserving, and/or gain-avoidance transactions utilizing options and/or indebtedness and involving corporations and/or partnerships.

The " J & G Defendants" are defined as: Jenkens & Gilchrist and all Persons (including Daugerdas, Mayer and Guerin) who, during all or any part of the period January 1, 1998, to date, held the status of director, officer, stockholder, partner, principal, member, owner and/or employee in any of the entities comprising Jenkens & Gilchrist (whether or not any such Person has been sued).

In order that non-settling defendants may know promptly how the judgment credit in Denney will be calculated, should this case go to trial, and be able to prepare their litigation strategy accordingly, non-settling defendants in Denney are invited to request the opportunity to brief the issue of the appropriate judgment credit to be applied in this case, under the applicable law.