More on the Lloyd's Trap
Dear Names,
Cashing
either the check from Citibank or selling the credit notes is a dangerous
move right now. The "suggestion" of the lawyer handling the matter
for names is to wait until after a decision is made on class certification, probably
in late June, before deciding on whether or not to cash the check or sell the
credit notes. Here, in more detail, is why.
The law firm of
Beatie and Osborn in New York City has brought a class action case against
Lloyd's in the Federal Court in Washington, D.C. The case is both offensive and
defensive and uses legal arguments generally not heard before in the U.S. or
the UK. The class action, if certified, "sweeps up" all the
defensive cases in 25 states into one master case. Part of the pleadings is a
request that the class be structured to include all unsettled names
worldwide.You can start to get a flavor of the case by reviewing the pleadings
titled "North Carolina Defense" which are attached along with my
extract of same. I am sorry I do not have the actual pleadings to form the
class action in computer readable form.
By cashing the
Citibank check or selling the debt credits you are "confirming"
your agreement to the settlement with Lloyd's that is contained within the
Citibank settlement and you are "acknowledging"
the R&R debt. Lloyd's will eventually seek to have all new cases brought by
names thrown out based upon the settlement clause. If you have
"confirmed" your agreement to the clause by taking money and/or
property, you have made it more difficult or impossible for your lawyers to
keep you in the cases. Two cases of immediate interest are the U.S. class
action mentioned here and the UNO's new misfeasance in public office case.
I would expect
that Lloyd's will wait until after September 30, 2004 to spring their trap.
This is the date that the checks expire, so by then they will have gotten the
largest number of "patsies" to sign their rights away by endorsing
the checks or selling the debt credits. At that point, they will change their
pleadings to demand that all names who were in Citibank (and that is most
of us) be deleted from the cases. The lawyers will then have a bloody battle.
If you have taken the money from Citibank, you have made it easy for
Lloyd's to pick you off.
Here is an extract from the
troublesome clause clipped from an appeal brief:
Pursuant to the
settlement, Objectors release "all claims, rights, or causes of action or
liabilities of any kind whatsoever" relating to the LATF against
Lloyd's. Lloyd's will use the release in this case and various
state and federal courts in the United States will interpret that release . . .
to waive Objectors' defenses and counterclaims?
From one of the Beatie
pleadings we have:
Under the Settlement Agreement, the
Names release:
any and all claims, rights or causes
of action or liabilities of any kind whatsoever . . . that any [Name] ever had,
now has or hereafter may have against the Released Parties, or any of them,
whether or not asserted in this [case] and whether known or unknown, based on
or arising out of any matter, cause, thing, act or failure to act whatsoever by
any of the Released Parties in relation to the establishment, conduct,
administration, operation, supervision, direction or oversight of the LATF . .
. .
From a letter one of the names wrote
objecting to the Citibank Settlement:
7. The inclusion of ÒCredit NotesÓ
useable against claims by LloydÕs has no proper place in a claim against
Citibank for breach of fiduciary duty and for an accounting.
LloydÕs is not a party, its claims are not in issue, and it is not legally
bound by the settlement. The ÒCredit NotesÓ presume that the class
members have debt to LloydÕs, which is not a party to this
case. This is a hotly disputed issue.
8. The ÒCredit NotesÓ are worthless
window dressing. Plaintiff Class Members are defined as those
Names who have rejected R&R, i.e. those who do not acknowledge any debt to
LloydÕs. This is a back door way for LloydÕs, which is not even a party
to this case, to bootstrap its claims. The inclusion of ÒCredit NotesÓ
against claims by LloydÕs is like the Trojan Horse. They tend to
undermine the claims we and other members of the Plaintiff Class Members have
against LloydÕs, whether filed yet or not.
9. To
purport to settle our case by giving us ÒcreditsÓ against those debts, valuing
LloydÕs claims at 100% of face is worse than worthless. By
definition of the class, every Plaintiff Class Member has already
rejected a more favorable settlement offer by LloydÕs than the 100% of claims
this ÒsettlementÓ implicitly forces on them. To give the credits any
value, a Plaintiff Class Member would have
to acknowledge the debt, at 100% and do that in a short time window. Indeed, each would have to acknowledge
the full amount of the claim, something well beyond the minor percentage of the
fabricated ÒclaimsÓ for which LloydÕs has settled without suit.
Action groups, including the ANA and UNO, are desperate for
money and are urging their members to cash their checks now and pay over
some or all the proceeds to the group. Ask them if they have a written opinion
from counsel regarding the impact of the cashing the check or selling the debt
credits will have on your future ability to pursue Lloyd's. Have them send you
a copy of the opinion if they have it.
May 2004