Area of Practice

Direct Actions

Maximizing recoveries for institutions

Under the right circumstances, filing securities claims directly (and “opting-out” of a class proceeding) can yield significant additional value for large holders.  A direct action can provide enhanced control over the course of litigation and the timing of resolution, additional creativity in the structure of the resolution, and monetary recoveries that are greater than corresponding class settlements, which on average amount to approximately 2-3% of the investment losses at issue.

Institutional investors and their boards of trustees should have a regular process for monitoring ongoing litigation affecting their portfolios and considering whether opting out of a securities class action is appropriate under the circumstances, in light of the potential benefits and drawbacks.

Our firm can provide expert analysis regarding the prospects of an opt-out claim based on the circumstances of a pending litigation, and will pursue the litigation, if desired, on contingency or an alternative fee arrangement.

The Numbers
13%
Opt-out premium in securities cases studied between 1996 and 2014
>20%
Premium realized in six of the cases in the same study
90%
Loss recovery for opt-out plaintiffs in the AOL Time Warner securities litigation
Opt-Out Cases In Securities Class Actions, Cornerstone Research and Latham & Watkins

"[O]pt-out settlement plaintiffs may succeed in obtaining a larger recovery than would have been received by remaining part of the class action . . . "