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In spite of recent developments, the final terms of a proposed settlement in the class actions brought by Holocaust victims against German and Austrian banks are still in dispute. Tuesday, the 2nd U.S. Circuit Court of Appeals heard arguments over whether federal Judge Shirley Wohl Kram of the U.S. District Court for the Southern District of New York exceeded her authority when she refused to approve a settlement reached between plaintiffs’ lawyers and attorneys for the German banks, and whether what she approved was final. Kram, after twice refusing to dismiss the cases at the request of the parties earlier this year, finally agreed last Thursday that the terms of the settlement did not prejudice a subclass consisting of people who were assigned claims in a separate settlement involving Austrian banks. When Kram announced her decision from the bench last Thursday, it was widely assumed that the dismissal rendered moot four applications for writs of mandamus to the 2nd Circuit, three by lawyers representing different plaintiffs’ groups in the class action and a fourth by the defendant banks. But after Kram accepted the assurances of lawyers that the so-called assigned-claims subclass would not be prejudiced, representatives of the German banks came to the conclusion that her order of dismissal, formally entered Friday, was not final. Jeffrey Barist, of Milbank, Tweed, Hadley & McCloy, told a three-judge panel that the German banks believed that the order dismissing the cases was conditional, according to plaintiffs’ lawyer Lawrence Kill, of Anderson Kill & Olick. David Boies, of Boies Schiller & Flexner, who represented Judge Kram on the mandamus petition, told the court that the judge did not issue a conditional order in the 10 class actions she dismissed, and that the parties were misreading the order of dismissal. The dismissal of those cases is a prerequisite to the distribution of some $4.5 billion to Holocaust victims in the bank cases, as well as cases involving claims for reparations from German industry for slave labor during the Nazi era and claims against German insurance companies. The German Bundestag must be satisfied that there has been a global settlement of Nazi-era claims before the money is released to victims. Lawrence Byrne, of Squadron Ellenoff Plesent & Sheinfeld, who represented Kram on the assigned claims issue, said, “We were arguing that the order was final and that the order achieves the legal peace that now allows the German foundation to pay out funds immediately to well-deserving Holocaust victims.” Senior Judge James L. Oakes and Judges Amalya Kearse and Jose A. Cabranes also heard from lawyers representing three different groups of plaintiffs: Burt Neuborne of New York University School of Law, Stephen Whinston of Berger & Montague, and Robert Swift of Kohn, Swift & Graf. “Everyone had a different posture and interpretation of the settlement,” Kill said. “Some of the plaintiffs felt that Judge Kram should have dismissed the cases along the lines we originally proposed. Others took the position that the so-called conditions were not arbitrary or capricious — in fact, they weren’t really conditions all — just the judge’s view on what the parties would attempt to achieve in Germany.” “It is really a matter of trying to make certain that the language employed in any final order was clear and unequivocal,” Kill said.

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