Opinion
MASTER FILE 02 Civ. 3288 (DLC).
December 30, 2005
MEMORANDUM OPINION ORDER
Cynthia Levin Moulton ("Moulton"), an objector to the 2005 Settlements in the securities class action, has filed a motion to alter or amend the judgment. For the reasons stated below, her motion is denied.
Moulton argues that the modifications to the Supplemental Plan of Allocation approved by the Court were of a "type and magnitude . . . [that] renders the Settlement Notice (incorporating the Supplemental Plan of Allocation) inadequate and defective." Those modifications were described in this Court's Fairness Opinion approving the Settlements. See In re WorldCom, Inc. Sec. Litig., 388 F. Supp. 2d 319, 344-53 (S.D.N.Y. 2005). The particular modification to which Moulton takes issue is that pursuant to which class members who sold or redeemed their securities on or before January 28, 2002 were allocated a share of the settlement proceeds equaling ten percent of the Recognized Amounts on their claim forms. The Supplemental Plan of Allocation included with the Settlement Notice had accorded such class members no recovery. Specifically, Moulton claims that owners of WorldCom securities who sold their securities on or before January 28, 2002 "would have been discouraged from filing a proof of claim in this settlement because under the Supplemental Plan of Allocation incorporated into the Settlement Notice they would have received no compensation." She also claims that owners of WorldCom securities who sold or redeemed their securities after that date "would have been discouraged from objecting to the Supplemental Plan of Allocation because they received all of the settlement funds."
Moulton's first argument was addressed in the Fairness Opinion. That Opinion stated, regarding an objection by Kenneth D. Laub:
Laub's attorney . . . argued that the allocation of ten percent of the normal recovery to Class Members who sold their securities prior to January 29, 2002 disadvantages Class Members who elected not to submit proofs of claim because they believed they would not recover, and that another notice period is therefore necessary. This argument has no merit, however, in light of the fact that the original deadline for filing a proof of claim was March 4, 2004, a date before the Supplemental Plan had been developed and distributed to Class Members and before the announcement in the Hearing Order that Class Members would have a second opportunity to submit proofs of claim. Any Class Member, regardless of the date on which she sold her securities, who wished to preserve her right to share in the eventual recovery should have filed a proof of claim before the March deadline; the second opportunity was essentially a windfall.WorldCom, 388 F. Supp. 2d at 349 n. 43 (emphasis supplied). All class members would have had every incentive to file proofs of claim before the first claims deadline passed. Moulton's contention that the modifications to the Supplemental Plan of Allocation rendered the Settlement Notice inadequate is thus rejected.
Moulton also lacks standing to move to alter or amend the judgment on this ground, as she did not object to the 2005 Settlements on this basis.
In regard to Moulton's argument that WorldCom class members who sold their securities after January 28, 2002 should have been given an opportunity to object, Moulton has no standing to raise such an argument, as she did not raise it prior to the issuance of the judgment, even though she had the opportunity. At the September 9, 2005 Fairness Hearing, her counsel went on record as supporting the modification. Moulton sold all of her own WorldCom securities prior to that date in any event. The fairness of the modification was considered at length in the Fairness Opinion.See WorldCom, 388 F. Supp. 2d at 345-46.; cf. Wal-Mart Stores, Inc. v. Visa U.S.A., Inc., 396 F. 3d 96, 114 (2d Cir. 2005) (noting that class members need not be given a second opportunity to opt out after the terms of a settlement are announced). Her contention that the Settlement Notice was unfair to class members who sold their WorldCom securities after January 28, 2002 is thus rejected. Conclusion
Moulton's motion to alter or amend the judgment is denied.
SO ORDERED.