Opinion
Master File No, 02 Civ. 3288 (DLC).
March 3, 2005
[PROPOSED] ORDER
WHEREAS plaintiff class members Elizabeth H. and Donald W. Rich ("Claimants") did not request exclusion from the plaintiff class in the above-referenced action by the September 1, 2004 deadline established by this Court;
WHEREAS on November 12, 2004, this Court issued a Judgment Approving Settlement and Dismissing Action Against the Citigroup Defendants (the "Judgment") in the above-referenced action, which released and dismissed certain defined Released Claims against certain defined Released Parties, and which permanently barred and enjoined class members from instituting, commencing, or prosecuting any Released Claims against any Released Parties;
WHEREAS on January 20, 2004, an NASD panel issued an Award in favor of Claimants in the amount of $315,000.00 in compensatory damages, plus additional amounts for interest, costs, and attorneys fees (the "Award"), in connection with their Statement of Claim which named as respondents Philip L. Spartis, Amy J. Elias, and Salomon Smith Barney Inc. d/b/a Citigroup Global Markets Inc. ("SSB"), among others;
WHEREAS on January 21, 2005, Claimants filed a complaint and application for confirmation of the Award in the Circuit Court of the Commonwealth of Kentucky, Jefferson County;
WHEREAS on February 2, 2005, Spartis and Elias applied to this Court seeking enforcement of the release and injunction contained in the Judgment to enjoin Claimants from confirming the Award;
WHEREAS on February 7, 2005, SSB filed a Motion for Clarification of Arbitration Award with the NASD seeking to obtain clarification as to whether any amount of the Award relates to anything other than Claimants' investments in securities issued by WorldCom, Inc.;
WHEREAS on February 9, 2005 this Court issued an Order, instructing Claimants to show cause why they should not be enjoined from enforcing their Award against Spartis and Elias;
WHEREAS on February 10, 2005, the Citigroup Defendants submitted an application joining in the February 7 application of Spartis and Elias, to the extent Spartis and Elias sought to enjoin Claimants from acting on the Award to the extent it relates to their investments in securities issued by WorldCom;
WHEREAS on February 17, 2005, Claimants submitted to this Court a memorandum opposing the issuance of an injunction barring them from proceeding to enforce their Award;
WHEREAS on February 23, 2005, Spartis and Elias submitted a Reply Memorandum of Law in Further Support of Their Application for Enforcement, as Against Elizabeth H. and Donald W. Rich, of the Court's Judgment Approving Settlement and Dismissing Action Against the Citigroup Defendants, and the supporting Affirmation of David I. Greenberger dated February 23, 2005, and the Citigroup Defendants submitted a Reply Memorandum of Law in Support of Their Application for Enforcement, as Against the Rich Claimants, of the Court's Judgment Approving Settlement and Dismissing Action Against the Citigroup Defendants, and the supporting declaration of Eric S. Goldstein, dated February 23, 2005;
WHEREAS a hearing on Claimants' application was held on February 25, 2005;
WHEREAS, prior to the hearing, Claimants notified the Citigroup Defendants that Claimants agreed to be enjoined from seeking to enforce the Award to the extent the Award relates to their investments in securities issued by WorldCom and the parties further agreed that the NASD panel should be permitted to consider the Citigroup Defendants' Motion for Clarification pursuant to its usual practices; and,
WHEREAS the Court has considered all of the arguments presented by Claimants, Spartis and Elias, and the Citigroup Defendants in the above-described submissions;
IT IS HEREBY ORDERED that the arguments offered by Claimants in their submission as to why the Judgment should not be enforced against them to preclude them from seeking enforcement of the Award to the extent that award relates to Claimants' investments in securities issued by WorldCom are without merit;
IT IS HEREBY FURTHER ORDERED that, pursuant to the Judgment, Claimants are permanently barred and enjoined from instituting, commencing or prosecuting, either directly or in any other capacity, or from seeking to enforce the Award with respect to, all claims of every nature and description, known and unknown, arising out of or relating to investments (including, but not limited to, purchases, sales, exercises, and decisions to hold) in securities issued by WorldCom, and/or in options or derivative instruments based in whole or in part on the value of securities issued by WorldCom (including Targeted Growth Enhanced Terms Securities with respect to MCI WorldCom, Inc. and GOALs issued by UBS AG), including without limitation all claims arising out of or relating to any analyst research reports or other statements made or issued by the Citigroup Defendants concerning WorldCom, any disclosures, registration statements or other statements by WorldCom, as well as all claims asserted by or that could have been asserted by Plaintiffs or any member of the Class in the Action against the Citigroup Releasees (the "Rich Injunction");
IT IS HEREBY FURTHER ORDERED that the arbitration panel that issued the award is not enjoined from clarifying whether any portion of the Award relates to claims not covered by the Rich Injunction.
SO ORDERED.