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Federal Judge Shirley Wohl Kram of the U.S. District Court for the Southern District of New York cleared the way Thursday for the payment of billions of dollars in reparations to victims of the Holocaust. After refusing twice during the last four months to dismiss claims in 10 consolidated class actions charging that German and Austrian banks looted accounts and seized property during the Nazi era’s “Aryanization” campaign, Kram said she felt that the remaining impediments to a proposed settlement in the cases had been removed. Kram said she was satisfied that certain claims holders would be adequately represented in the settlement. “I want to commend everyone for expediting these developments,” the judge told dozens of lawyers and interested parties who gathered for a hearing in a fifth floor courtroom at New York City’s 40 Foley Square. The dismissal of the cases that make up In re Austrian and German Bank Holocaust Litigation, 98 Civ. 3938, was the last major bar to the payment of $4.5 billion to Holocaust victims from a foundation created last year called “Remembrance, Responsibility and Future,” which is to be funded by contributions from the German government, as well as banks and corporations in that country. The foundation is intended to compensate victims in more than 50 class actions, including those in the bank litigation, cases concerning victims of slave labor, and claims against German insurance companies. The German Bundestag had indicated that it would not fully fund the foundation and authorize payments to victims until litigation is settled. ASSIGNED CLAIMS When she was first asked to dismiss the cases in January, Judge Kram had two objections: that the foundation was not yet fully funded and that a certain subclass of plaintiffs might be prejudiced by the dismissal. The subclass consisted of those people who had already reached a separate, $40 million settlement with Austrian banks. As part of that settlement, the Austrian banks, which had their own claims against German banks for the looting of assets, assigned those claims to the plaintiffs. Kram expressed concern that the foundation would not make provisions for compensating the holders of the assigned claims. The creation of the foundation was announced last summer by plaintiffs in many of the class actions, defendant banks, German industry and the governments of Germany, the United States and other nations with significant populations of Holocaust survivors, including Israel. The foundation was announced along with a compact that embodied several documents, including an executive agreement between the United States and the German government that provides for the formation of the foundation. On Aug. 12, 2000, the German Bundestag passed enabling legislation for the foundation. STATEMENT OF INTEREST One concern of Judge Kram’s was that the United States committed itself in the compact to provide any court where a Holocaust claim is filed with a “Statement of Interest,” which says it is in the foreign policy interest of the United States for the foundation to be the exclusive remedy for all Nazi era claims against German companies. The submission of such a statement of interest, she said at the January hearing, would “undoubtedly have a significant impact on the resolution of any new cases brought by absent class members,” and, in all likelihood, lead to a dismissal of those cases. By March, Kram was satisfied that the foundation was fully funded, but she remained adamant that provisions for the assigned-claims holders were inadequate, and she again refused to dismiss the cases. Frustrated, plaintiffs’ lawyers appealed her refusal to the 2nd U.S. Circuit Court of Appeals. But that appeal is now moot, as Kram is persuaded that a last-minute agreement reached between the parties provides some protection to the assigned claims subclass and has removed the possibility of prejudice. Plaintiffs’ attorney Michael D. Hausfeld, of Cohen, Milstein, Hausfeld & Toll, told the judge that the five member countries of the multination board that helped negotiate the settlement were committed to persuading the board that the claims of the subclass “would be treated equally” to those of other people seeking compensation. Hausfeld also said that some $2.5 million in funds already allocated for other purposes would be set aside for the assigned claims plaintiffs. Plaintiffs’ attorney Burt Neuborne said the five member countries, all from Eastern and Central Europe, would work hard to assure the interests of the subclass would be protected. Those countries, which include Poland and Czechoslovokia, have between them more than a million victims who will be compensated. “You could not get a more sympathetic group of people to help correct the injustices of the Holocaust,” Neuborne said.

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