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Fifty-one lawyers were awarded $59.9 million Thursday for their work in securing a $5 billion fund for the families of Holocaust victims from the German government and businesses in an international negotiation that was concluded last summer. The highest award, $7.3 million, went to Melvyn I. Weiss of Milberg Weiss Bershad Hynes & Lerach, one of the lead lawyers in the negotiation. The panel, which consisted of two arbitrators, was set up as a part of the negotiations that led to the settlement of German Holocaust claims. One arbitrator, Kenneth R. Feinberg, a special master in the settlement of many mass tort cases, was selected by American litigators who attended 13 plenary negotiating sessions in Bonn and Washington, D.C. The other arbitrator, Nicholas deB. Katzenbach, a former U.S. attorney general under President Lyndon B. Johnson, was selected by representatives of German industry involved in the talks. The top three awards went to lawyers who were responsible for negotiating a settlement for persons whom the Nazis had impressed into slave or forced labor. In addition to Weiss, the lawyers were Michael D. Hausfeld of Cohen, Milstein, Hausfeld & Toll in Washington, D.C., who was awarded $5.8 million; and Professor Burt Neuborne of New York University School of Law, who received $5 million. The other top awards went to Edward D. Fagan of Livingston, N.J., who received $4.4 million; and Robert A. Swift of Kohn, Swift & Graf in Philadelphia, $4.3 million. Swift and Fagan were responsible for property loss claims, principally bank accounts and insurance awards that were taken from Holocaust victims. The lawyers’ awards appear large in contrast to what individual victims will receive under the settlement. Surviving slave laborers, who were mostly Jewish concentration camp victims, will receive about $7,500 apiece, while forced laborers, mostly Eastern Europeans who were impressed into work in Nazi war factories, will receive about $2,500 each, depending upon the exchange rate for Deutsche marks. But Former Deputy Treasury Secretary Stuart E. Eizenstat, who was the chief representative of the United States at the talks, called the awards “very reasonable and modest in light of the enormous amount of work put in by the lawyers.” He described the process of meeting the Germans’ demands for “enduring legal peace” without resort to a class action as a particularly difficult legal task. 13 NEGOTIATING SESSIONS The lawyers participated in 13 plenary negotiating sessions between early 1999 and the signing of the accord in July 2000, as well as innumerable side sessions, added Eizenstat, who is now at Covington & Burling in Washington, D.C. In addition, class action experts said Thursday that $59.9 million is only 1.2 percent of the entire $5 billion fund, a percentage that is unusually low for an award in a common fund case. In common fund class actions, they said, fee awards generally amount to between 15 and 22 percent of the total award. At 15 percent, the fee award would have been $750 million. The awards to the attorneys included expenses for litigation and travel costs, which normally amount to about a 15 percent add-on to fee applications. Feinberg, citing the confidentiality of the process, declined to comment on how many of the attorneys had been awarded straight lodestar amounts (fees times hourly rates), and how many had been awarded bonuses to reflect the extraordinary value of their work in bringing about the settlement. Professor Neuborne said that his lodestar amount had been doubled by the arbitrators, while Fagan said that his $4.4 million was almost exactly the straight lodestar amount he had asked for. About 80 percent of the $5 billion fund was allocated to pay the claims of slave and forced laborers, while about $500 million was allocated to pay survivors of persons whose bank accounts or insurance policies were confiscated by the Nazis. Another $350 million was set aside for the German Foundation, which was established to administer the settlement and promote international tolerance. The fund was set up to provide compensation to Holocaust victims and their families that had not been previously paid by the German government. Starting in the 1950s, the West German government paid out about $60 billion in reparations to Nazi victims, but the East German government paid very little. U.S. DISMISSALS To obtain “enduring legal peace,” the plaintiffs’ lawyers at the negotiating table agreed to obtain the dismissal of 56 cases that were then pending in U.S. courts. That task proved exceedingly difficult when federal Judge Shirley Wohl Kram of the U.S. District Court for the Southern District of New York resisted dismissing the cases before her out of concerns that claims assigned by Austrian banks to Holocaust victims in a $40 million settlement were being unfairly compromised. Eventually, on May 17, the 2nd U.S. Circuit Court of Appeals issued an order of mandamus directing Kram to unconditionally dismiss the cases before her. A week later, the German Bundestag authorized the start of payments to survivors and their families, which are now estimated to begin in the next two to three weeks. The German Foundation, which is next scheduled to meet on June 21, will not authorize the release of funds to the lawyers, however, until substantial payments are made to victims. In negotiating the overall settlement, it was agreed that fees would be limited to between $50 million and $62.5 million (between 1 and 1.25 percent of the entire fund). As a part of the accord, it was agreed that the named plaintiffs in pending lawsuits would be given $15,000 each on top of any amount they would be entitled to under the pact. The amount approved by the arbitrators for the lawyers, combined with $4.4 incentive awards to 294 plaintiffs, came to $62.1 million, just shy of the ceiling. The settlement established a separate fund for fees, so the fee awards will not affect the amounts paid to Holocaust victims and their families.

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