Thank you for sharing!

Your article was successfully shared with the contacts you provided.
U.S. District Judge Shirley Wohl Kram of the U.S. District Court for the Southern District of New York on Wednesday expressed reservations about some aspects of the proposed settlement of property claims made by Holocaust survivors against German banks. In a hearing held to discuss objections to the settlement, Kram said she was concerned that a massive victim compensation fund assembled by the German government would also be the object of claims by victims who had accounts in Austrian banks that were looted by German banks in collaboration with the Nazis. “We don’t know to what extent the funds available to the [compensation fund] will be diluted [by these claims],” Kram told several lawyers who urged her to grant their voluntary motion to dismiss. The motion is a prelude to a settlement of more than 50 consolidated class actions on property claims, and the ultimate distribution of monies from a massive fund to be established by the German government and German industry. The fund is to be 10 billion Deutschmarks, the equivalent of more than $4 billion. The creation of the fund was announced last summer, after months of negotiations between the plaintiffs, defendant banks, German industry and the governments of Germany, the United States, and other nations with significant populations of Holocaust survivors, including Israel. It is intended to compensate victims with slave labor claims against German industry and against German insurance companies, as well as claims that are the subject of the class actions before Judge Kram: those for property and other assets seized from victims and their bank accounts during the infamous Nazi “Aryanization” campaign. Should Kram approve the plaintiffs’ motion to dismiss the case, money from the settlement fund could be distributed as early as March through a German-created foundation called “Remembrance, Responsibility and Future.” Kram, who also heard from Holocaust survivors Wednesday as she weighed whether to grant plaintiffs’ motion, said she would rule shortly. The genesis of the assigned claims issue that troubled Kram was a 1998 suit filed by a class of Holocaust victims against two Austrian banks, Bank Austria AG and Creditanstalt AG, for stealing money from their accounts. The case settled in 1999 for the sum of $40 million, with the two banks agreeing to give victims any rights to claims that the banks themselves could make against banks in Germany for the seizure of assets. But on Monday, that same class filed a new lawsuit in the Southern District, alleging that three German banks conspired with the Nazis to confiscate hundreds of millions of dollars from the bank accounts of victims kept in Austrian accounts. Wednesday, Jack S. Dweck, the attorney who filed the suit, told Kram, “The assigned claims have been totally ignored.” “I do believe the court is disposed to sign [the motion to dismiss],” Dweck said. “It must contain an exception on these claims. The $40 million settlement is nominal at best; there is no consideration — no one was has really taken seriously the assigned claims.” But Stephen A. Whinston, of Berger & Montague, said that he and other plaintiffs’ lawyers “tried hard” in settlement negotiations to get the assigned claims included in the fund, but were unable to convince Germany to do so. “The assigned claims remain viable,” he said. “The Austrian banks are not considered a claimant under the German foundation.” “I can’t agree with you,” Kram said, and when Winston said he thought the issue was clear, she shot back, “We’ll see how clear it is.” Plaintiffs’ lawyer Lawrence Kill, of Anderson Kill & Olick, agreed that the issue of the assignment of claims was one that was negotiated without success. “The German side did not think the assignment was a valid claim,” Kill said. When Kram asked Kill if the assignment issue raised a conflict for the plaintiffs’ attorneys, he responded, “You want to call it a conflict, well, maybe it is, but it is the type of conflict that lawyers face” in class actions where plaintiffs are seeking recovery from a capped fund. Charles Stillman, who was appointed in October as a special master charged with reviewing the fairness of the settlement, gave a favorable report. Stillman said that no claims appear to have been compromised by the settlement. He also said that named plaintiffs and their attorneys have not benefited to the detriment of absent class members, and that there is no evidence of collusion between the parties. ATTORNEYS’ FEES Judge Kram said she was also concerned about attorneys’ fees in the case. “I had heard that one plaintiffs’ attorney has submitted a bill for 10,000 hours,” she said. Two lawyers, Kenneth R. Feinberg and former Attorney General Nicholas D. Katzenbach, were selected by the governments of the United States and Germany, as well as the plaintiffs’ attorneys, to arbitrate fee claims from the hundreds of attorneys involved in the case. Under the terms of the settlement, plaintiffs’ lawyers will receive one and a quarter percent of the foundation monies, Kill said. Stillman, of Stillman & Friedman, called the attorney fee arrangement for the settlement “fair and reasonable.” “I am very confident that Messrs. Katzenbach and Feinberg will make those awards fairly …, ” Stillman said. “ These men are tough and they are going to make a very thorough inquiry.”

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Advance® Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.