NatWest, Deutsche Bank get closer to approval of $34M settlement in CHF LIBOR lawsuit
NatWest Markets and Deutsche Bank are moving closer to securing the Court’s approval for a settlement in a CHF LIBOR lawsuit. This becomes clear from a set of documents filed with the New York Southern District Court on June 29, 2022.
Representative Plaintiffs (California State Teachers’ Retirement System, Frank Divitto, Richard Dennis, and Fund Liquidation Holdings LLC) move for preliminary approval of the: (i) $21,000,000 Settlement with NatWest Markets Plc (f/k/a The Royal Bank of Scotland plc) (“RBS”); and (ii) $13,000,000 Settlement with Deutsche Bank AG and DB Group Services (UK) Ltd.
The Court previously preliminarily approved Plaintiffs’ $22,000,000 Settlement with JPMorgan Chase & Co. If finally approved, the three Settlements will recover a total of $56,000,000 for the Settlement Class.
This litigation was initiated on February 5, 2015 against Credit Suisse Group AG, JPMorgan, RBS, and UBS AG on behalf of traders of Swiss Franc LIBOR- Based Derivatives by Fund Liquidation Holdings, LLC (FLH) in the name of Sonterra Capital Master Fund, Ltd. On June 19, 2015, Plaintiffs filed their First Amended Complaint, adding Defendants Credit Suisse AG, Bluecrest Capital Management, LLP, Deutsche Bank, and certain Plaintiffs.
The proposed Settlement Class under the RBS and Deutsche Bank Settlements is identical to the Class preliminarily approved for the JPMorgan Settlement:
All Persons (including both natural persons and entities) who purchased, sold, held, traded, or otherwise had any interest in Swiss Franc LIBOR-Based Derivatives during the period of January 1, 2001 through December 31, 2011 (“Class Period”). Excluded from the Settlement Class are the Defendants and any parent, subsidiary, affiliate or agent of any Defendant or any co-conspirator whether or not named as a Defendant, and the United States Government.
Negotiations with RBS took place over several years, starting with a mediation in August 2018 and resuming again in April 2020 and continuing until June 2, 2021. Interim Lead Counsel engaged in lengthy negotiations with RBS over the material terms of the settlement, including the settlement amount, scope of the cooperation to be provided by RBS, the release, and the circumstances under which the Parties may terminate the settlement.
During negotiations, RBS denied any liability and maintained that it had meritorious defenses to the claims brought against it, and each side presented their views on the strengths and weaknesses of the case, as well as RBS’s litigation exposure. On February 1, 2021, RBS and Interim Lead Counsel signed a term sheet and executed the RBS Settlement Agreement on June 2, 2021.
The negotiations with Deutsche Bank occurred over several months starting in September 2021. Interim Lead Counsel engaged in similarly lengthy discussions with Deutsche Bank’s counsel over the strengths and weaknesses of the claims and defenses, as well as Deutsche Bank’s litigation exposure.
Deutsche Bank denied any liability and maintained that it had potentially strong defenses to the claims brought against it.
After significant discussions over the settlement consideration and the scope of cooperation, Deutsche Bank and Interim Lead Counsel signed a term sheet on December 16, 2021 and executed the Deutsche Bank Settlement on April 18, 2022.