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Sidney S. Liebesman knew he was a part of something unique. Liebesman, a partner in Wilmington, Del.’s Grant & Eisenhofer, is co-lead counsel for about 50 European investors seeking damages arising from Royal Dutch Shell PLC’s alleged overstatement of its oil and gas reserves by 5.8 billion barrels between 1997 and 2003. To get there, the plaintiffs’ team invoked a fairly untried Dutch statute that allows both sides to petition the courts to form a special foundation in order to enforce the negotiated settlement. The statute had been invoked a couple of times before, but never in a securities action or one involving investors across Europe. “So all the Europeans are looking to see how this is going to work out and if this is going to be a possible model for resolving class actions in Europe,” Liebesman said. “It’s groundbreaking and historic.” Investors from Denmark, France, Germany, Luxembourg, the Netherlands, Norway, Switzerland and the United Kingdom asserted claims against Shell, which is based in The Hague, Netherlands. In the Matter of Royal Dutch Shell Settlement, No. 396/07 (Amsterdam, Neth., Ct. App.). Grant & Eisenhofer became involved because the firm had represented Stichting Pensioenfonds ABP before in a variety of matters, said Jay W. Eisenhofer, the firm’s founder and managing partner. The Dutch public pension plan manages more than $230 billion in assets and was the co-lead plaintiff in the case. Eisenhofer said that five or so lawyers from his firm were involved. Normally, the plaintiffs would pursue claims individually. “I really didn’t think the clients would be particularly interested in settling their individual claims on a European classwide basis, but I was surprised the clients were very interested in doing that,” Eisenhofer said. Following months of negotiations and meetings in the United States, Switzerland and the Netherlands, the parties reached their agreement on April 11. Shell has admitted no wrongdoing. “It’s been a historic experience,” Eisenhofer said. “The clients were trying to achieve something they viewed as being historic, and so it’s rewarding to be a part of that.” The settlement includes a $352 million cash payout from Shell. Additionally, the plaintiffs will receive $96 million out of a $120 million U.S. Securities and Exchange Commission fine and fees and costs associated with the settlement. The deal’s value ultimately could exceed $500 million, according to Grant & Eisenhofer. U.S. investors have a stake in a separate class action in U.S. district court in New Jersey. In re Royal Dutch Shell/Transport Sec. Litig., No 02-266-PB (D.N.J.). The Dutch settlement is payable to all non-U.S. shareholders who bought Shell stock between April 8, 1999, and March 18, 2004. Some European investors had joined the U.S. litigation, but opted out to seek a resolution in Europe. Shell has agreed that, should the U.S. shareholders secure a higher payout, the company will pay the difference to the European investors. Because the Netherlands lacks a class action apparatus, the lawyers relied on a 2005 Dutch law that allowed both sides to petition the Amsterdam Court of Appeals to create a special-purpose foundation that will collect the money and distribute it to the investors. That Shell Reserves Compensation Foundation will be governed by an independent, three-member board. “Since nobody had ever done this before, it was very challenging,” Eisenhofer said. “You have to convince people to do something they’ve never done.” The firm worked with Pels Rijcken & Droogleever Fortuijn, a firm based in The Hague that could not be reached for comment. Ralph C. Ferrara, a partner in the Washington office of New York’s Dewey & LeBoeuf, which represented Shell, said the case could provide an important blueprint for future class action settlements in Europe. “This was the first case in history where an enormous class action was resolved outside the borders of the United States,” Ferrara said. “And to be a part of creating the architecture for that resolution is just a tremendous � tremendous � sense of satisfaction. I think it may be a template for resolving the kind of ambivalence that exists outside the United States as to class action litigation.” Ferrara estimated that 15 lawyers from his firm and 10 Shell in-house lawyers worked on the case. The Dutch lawyers handled most of the research and consulted with local experts to figure out how the 2005 statute � originally implemented to settle claims against a drug company � could be applied for Shell. On the plaintiffs’ side, a number of U.S. firms joined Grant & Eisenhofer. Miami’s Diaz, Reus, Rolff & Targ represents a group of German investors, and Schiffrin Barroway Topaz & Kessler, in Radnor, Pa., got involved on behalf of half a dozen Swedish and Danish investors. Schiffrin Barroway partner Darren Check said the case could signal openness in Europe to something resembling an American-style class action. “I don’t think there will ever be a system like in the U.S.,” Check said. “But I think there is definitely going to be a move toward some type of group mechanism for aggrieved investors and consumers to recover their losses.”

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