Opinion
00 CIV. 2284 (DLC)
March 21, 2002
SUMMARY NOTICE OF CLASS ACTION
TO: ALL PERSONS WHO PURCHASED SHARES OF THE MANHATTAN INVESTMENT FUND, LTD. AND SUFFERED DAMAGES THEREBY, DURING THE PERIOD COMMENCING OCTOBER 1, 1995 AND CONTINUING THROUGH JANUARY I8, 2000.
The above-captioned lawsuit has been certified by the Court as a Class Action on behalf of a class (the "class") of all persons and entities who purchased shares in the Manhattan Investment Fund, Ltd. (the "Fund"), and suffered damages thereby, between October 1, 1995 and January 18, 2000 (the "Class Period"), for trial of the claims of the class against Defendants Michael Berger, Deloitte Touche (Bermuda) and Financial Asset Management, Inc.
A description of the allegations is contained in the Notice of Class Action (the "Notice"), which has been mailed to identifiable potential Class Members. The Notice also describes your rights as a class member, tells you what you have to do if you choose to be excluded from the class, and specifies that in order to be excluded from the class you must request exclusion in writing on or before June 10, 2002. If you believe you are a member of the class identified above and have not received the Notice, you may obtain copies thereof by writing to:
In re Manhattan Investment Fund, Ltd. Securities Litigation c/o Thelen Reid Priest, LLP 40 West 57th Street New York, New York 10019 Telehone: (866) 256-2270 (toll free) Fax: (212) 603-2001 E-mail: MIFSECURITIESLITIGATION@thelenreid.com PLEASE DO NOT CONTACT THE COURT OR THE CLERK'S OFFICE FOR INFORMATION CONCERNING THIS CASE NOTICE OF CLASS ACTIONTO: All persons who purchased shares of the Manhattan Investment Fund, Ltd. and suffered damages thereby, during the period commencing October 1, 1995 and continuing through January 18, 2000.
THIS NOTICE MAY AFFECT YOUR RIGHTS PLEASE READ THIS ENTIRE NOTICE CAREFULLY IF YOU DO NOT REQUEST TO BE EXCLUDED FROM THE CLASS BY JUNE 10, 2002 AS DESCRIBED BELOW, YOU WILL BE BOUND BY THE DECISIONS AND OUTCOME OF THIS LAWSUIT Description of the LawsuitThe purpose of this Notice is to inform you of a class action lawsuit that is now pending in the United States District Court for the Southern District of New York. In this lawsuit, the Plaintiffs claim that Michael Berger ("Berger") conducted a fraudulent scheme with respect to the Manhattan Investment Fund, Ltd. (the "Fund"), by manufacturing false statements showing the Fund to be profitable, instead of accurately reporting the Fund's losses. Plaintiffs claim that as a result, during the Class Period, defined as commencing October 1, 1995 and continuing through January 18, 2000, investors were issued shares in the Fund at an inflated net asset value ("NAV"); investors continued their investments instead of exiting the Fund; and investors who did exit the Fund received payments at an inflated NAV when their shares in the Fund were redeemed.
Plaintiffs, in their amended complaint, have brought claims against (1) Michael Berger; (2) Fund Administration Services (Bermuda) Ltd., Ernst Young International, Ernst Young Bermuda, and Kempe Whittle Associates Ltd. (collectively, the "FASB Entities"); (3) Deloitte Touche (Bermuda), Deloitte Touche Tohmatsu, and Deloitte Touche LLP (collectively, the "Deloitte Entities"); (4) Bear Stearns Co., Inc., and Bear Stearns Securities Corp. (collectively, "Bear Stearns"); and (5) Financial Asset Management, Inc. ("FAM"). The claims in Plaintiffs' amended complaint against the FASB Entities allege that they calculated and distributed false net asset value statements to investors monthly, issued new shares to investors and redeemed the shares of exiting investors at inflated NAVs, and disseminated the Fund's Offering Memorandum, containing fraudulent performance data, to prospective investors. The claims in the amended complaint against the Deloitte Entities allege that their annual audits certified the year-end NAV, when the Deloitte Entities had access to information demonstrating that the NAV calculations were based on fictitious information. The claims in the amended complaint against Bear Stearns and FAM allege that they are brokerage entities which aided and abetted the fraud concerning the Fund. The amended complaint alleges violations of United States securities laws through the commission of fraud, and wrongful conduct in violation of New York law.
Plaintiffs in this lawsuit represent all persons and entities who purchased shares in the Fund, and suffered damages thereby, during the period commencing October 1, 1995 and continuing through January 18, 2000. The Court has appointed the following entities as class representatives: Cromer Finance, Ltd. and Prival N.V. On behalf of this class of Fund investors, these plaintiffs are asking the Court to order the Defendants to pay damages. Plaintiffs seek a trial by jury to determine liability and decide the amount of damages to be paid, if any.
Status of the Lawsuit
This action has been actively litigated since it was filed on or about March 24, 2000. With the exception of Berger, each of the Defendants has filed at least one motion to dismiss the amended complaint. Plaintiffs have opposed those motions. On April 17, 2001, the Court granted motions to dismiss the amended complaint against Ernst Young International, Deloitte Touche Tohmatsu, Deloitte Touche LLP, Bear Stearns Co., and Bear Stearns Securities Corp. The remaining Defendants in this action were the FASB Entities, Berger, Deloitte Touche (Bermuda) and FAM.
On December 21, 2001, Plaintiffs and the FASB Entities advised the Court that they had reached a settlement in principle, which contemplates the Court's approval of a separate class for the purposes of the settlement (the "FASB Settlement Class"). The proposed settlement resolves the claims against the FASB Entities and provides for a payment to be made by the FASB Entities to the members of the FASB Settlement Class. The FASB Settlement Class, the provisions of the proposed settlement and the rights of members of the FASB Settlement Class are not the subject of this Notice. Your decision to remain in or to be excluded from the class that is the subject of this Notice will have no effect upon your membership in the FASB Settlement Class or upon your ability to receive a portion of the settlement payment from the FASB Entities. A subsequent notice concerning the proposed settlement and the rights of members of the FASB Settlement Class will be provided at a later time.
On December 27, 2001, the Court certified this lawsuit to proceed as a class action pursuant to Rule 23 of the Federal Rules of Civil Procedure to try the claims of the class against Defendants Berger, Deloitte Touche (Bermuda) and FAM.
On February 22, 2002, the Plaintiffs moved to amend their complaint again, in order to supplement their allegations against Deloitte Touche Tohmatsu. On March 12, 2002, the Court granted Plaintiffs' motion to revise the Court's April 17, 2001 Order to the extent that it dismissed Deloitte Touche Tohmatsu from this lawsuit, so that Deloitte Touche Tohmatsu and the Plaintiffs can litigate whether the Plaintiffs are able to assert any claims against Deloitte Touche Tohmatsu. If the Court determines that the Plaintiffs may bring claims against Deloitte Touche Tohmatsu, this lawsuit will proceed as a class action to try the claims of the class against Berger, Deloitte Touche (Bermuda), Deloitte Touche Tohmatsu, and FAM (collectively the "Trial Defendants"). This means that the final result of this action, including the trial of the claims against at least three defendants, and against four defendants if there are claims against Deloitte Touche Tohmatsu, whether favorable to the class or not, will apply to all class members who do not act as described herein to exclude themselves from the class.
The Court has made no decision regarding the merits of the claims of the class.
The Definition of the Class
The class to be represented in this lawsuit is defined as:
All persons who purchased shares of the Fund, and suffered damages thereby, during the period commencing October 1, 1995, and continuing through January 18, 2000.
Your Rights as a Class Member
If you purchased shares of the Fund during the Class Period you might be a class member. If you are a class member, you have the right to decide whether to remain a member of the class. If you choose to remain a class member, you do not need to do anything at this time. If you do nothing, you will automatically be included in the class.
If you choose to remain in the class, you will be entitled to your share of any money awarded to the class either through a settlement with the Trial Defendants, or through a judgment of the Court. If the Court dismisses one or more of the claims against any remaining Trial Defendant, or if the Trial Defendants prevail at trial, you will be bound by the decision (and all prior decisions of the Court, including the dismissal of the amended complaint against certain Defendants noted above) if you remain a member of the class. In other words, you will not be allowed to sue for your individual claims.
If you choose to remain in the class, you will not be personally responsible for the fees of the class attorneys or the costs they incur in representing you as a class member. In the absence of an alternate agreement, the attorneys in this lawsuit have agreed to represent the class on a contingent basis; which means they will be awarded fees and costs only if they succeed in obtaining money from one or more Trial Defendants. Any such contingent attorneys' fees will be awarded by the Court from the settlement or judgment they obtain on behalf of the class, if any.
If you choose to remain in the class, you will receive another notice concerning the claims of the class against the Trial Defendants in the event that a settlement is reached with the Trial Defendants that provides for a payment to the members of the class, or after the claims of the class against the Trial Defendants are determined at trial.
If you choose to be excluded from the class, you must complete and submit the attached request for exclusion form, or submit a written request for exclusion that includes your name, address, telephone number, fax number, e-mail address if available and, if possible, a list of all purchases and sales you made of shares of the Fund during the class period. In your request for exclusion you must state: "I wish to be excluded from the class." You must sign the request for exclusion. A sample request for exclusion is attached to this Notice. Your mailed request for exclusion must be postmarked no later than June 10, 2002 . If you choose to be excluded from the class, please mail your request by certified or overnight mail to: Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator, c/o Thelen Reid Priest LLP, 40 West 57th Street, New York, New York 10019.
If you choose to be excluded from the class, you will not be bound by the prior decisions of the Court in this lawsuit or by any judgment in this lawsuit against the Trial Defendants, whether favorable or unfavorable, and you will not be entitled to share in any money that is distributed to the class. If you choose to pursue a lawsuit on your own, you will be responsible personally for any fees that your individual attorney charges you.
Information about the status of the case can be obtained by: (1) sending a letter or fax to Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator, c/o Thelen Reid Priest LLP, 40 West 57th Street, New York, New York 10019, fax number (212) 603-2001; or (2) sending an e-mail to Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator at MIFSECURITIESLITIGATION@thelenreid.com.
Please Keep Your Address Current
If you change your address, or if this Notice was not mailed to your correct address, you should immediately provide your current address to Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator, c/o Thelen Reid Priest LLP, by letter, fax or e-mail. If the attorneys representing the class do not have your correct address, you might not receive notice of important developments in this class action lawsuit and you might not receive your share of any money recovered by the class.
Special Notice to Nominees
If you purchased shares of the Fund during the period commencing October 1, 1995 and continuing through January 18, 2000 for the beneficial interest of a person or entity other than yourself, you are directed to provide each such beneficial owner with a copy of this Notice within twenty (20) days of your receipt of this Notice. The class representatives shall reimburse any nominee for reasonable expenses incurred by the nominee in providing each such beneficial owner with a copy of this Notice.
Additional Information
This Notice gives only a summary of this lawsuit and the claims asserted by the Plaintiffs. For more detailed information, you may examine copies of the pleadings submitted by the parties and the written decisions and opinions issued by the Court in this lawsuit at any time during regular office hours at any of the following three depositories:
Manhattan Investment Fund, Ltd. Securities Manhattan Investment Fund, Ltd. Securities Litigation Litigation LeBoeuf Lamb Greene MacRae KPMG No. 1 Minster Court 58 Par-la-Ville Road Mincing Lane Hamilton HM11 London EC3R 7YL Bermuda Attention: Sarah Stutchfield Attention: Mike Morrison Tel: 020 7459 5109 Tel: (441) 294-2626 Manhattan Investment Fund, Ltd. Securities Litigation Thelen Reid Priest LLP 40 West 57 Street New York, New York 10019 Attention: Joyce Gilroy Tel: (212) 603-8000 In the alternative, you may contact the Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator at MIFSECURITIESLITIGATION@thelenreid.com, or the following attorneys in writing.Lead Attorneys for the Class
Jeffrey H. Squire, Esq. Steven S. Honigman, Esq. Richard L. Stone, Esq. Richard P. Swanson, Esq. Kirby McInerney Squire, LLP Thelen Reid Priest LLP 830 Third Avenue 40 West 57th Street New York, N Y 10022 New York, N Y 10019-4097
If you have questions regarding this Notice or this class action lawsuit, you may write to any of the attorneys listed above. DO NOT WRITE OR TELEPHONE THE CLERK OF COURT OR THE JUDGE WITH QUESTIONS REGARDING THIS LAWSUIT.
Information about the status of the case can be obtained by sending a letter, fax or e-mail to:
In re: Manhattan Investment Fund, Ltd. Securities Litigation c/o Thelen Reid Priest, LLP 40 West 57th Street New York, New York 10019 Telephone: (866) 256-2270 (toll free) Fax: (212) 603-2001 E-mail: MIFSECURITIESLITIGATION@thelenreid.com REQUEST FOR EXCLUSION FROM THE CLASSDated: _________, 2002
Manhattan Investment Fund, Ltd. Securities Litigation Class Administrator c/o Thelen Reid Priest LLP 40 West 57th Street New York, New York 10019