In Re: Hibernia Foods, PLC Securities Litigation 04-CV ...securities.stanford.edu/filings-documents/1031/HIBNYPK04-01/... · 8 1(,) BefOre: DOC #, 9 HON. HAROLD AER, JR., 10 ... That

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JAN 1 1 200 -1Stk

UNITED STATES DISTRICT COURT /'SOUTHERN DISTRICT OF NEW YORK OF t4—

2

3 IN RE: HIBERNIA FOODS, PLCSECURITIES LITIGATION,

4

5 04 CV 3182 (HE)

6NeW York, N.Y.

7 December 21, 20061010 a.m.

1(,)8BefOre: DOC #,9

HON. HAROLD AER, JR.,10

District Judge11

APPEARANCES12

MILBERG WEISS BERSHAD & SCHULMAN LIP

13 Attorneys for PlaintiffsBY: GEORGE A. BAUER III

14',MACH COUGHLIN sTOTA GELLER RUDMAN & ROBBINS LIP

15 Attorneys for PlaintiffsBY EVAN J. KAUFMAN

16HUGHES HUBBARD & REED LIP

17 Attorneys for DefendantsBY: SARAH L. CAVE

18

19

20

21

22

23

24

25

SOUTHERN DISTRICT REPORTERS, P.C.(212) 805-0300

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1 UNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF EBW YORK

2 X

3 IN RE: HIBERNLA FOODS, PLCSECURITIES LITIGATION,

4

5 04 CV 3182 (HB)

6 -- New York, N.Y.

7 December 21, 200610:10 a.m.

8Before:

9HON. HAROLD AER, JR.,

10District Judge

11APPEARANCES

12MILBERG WEISS BERSHAD & SCHULMAN LLP

13 Attorneys for PlaintiffsBY: GEORGE A. BAOER III

14LERACH COUGHLIN STOIA GELLER RUDMAN & ROBBINS LLP

15 Attorneys for PlaintiffsBY EVAN 3. KAUFMAN

16HUGHES HCBBARD & REED LLP

17 Attorneys for DefendantsBY: SARAH L. CAVE

IB

19

20

21

22

23

24

25

SOUTHERN DISTRICT REPORTERS, PC-(212) 805-0300

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1 (case called)

2 (In open court)

3 THE DEPUTY CLERK: Will counsel please state their

4 appearances for the record.

MR. KAUFMAN: Evan Kaufman for Lerach Coughlin_ Good

6 morning.

7 MR. BAUFR: Good morning. George Bauer for Milberg

8 Weiss.

9 M. CAVE: Sarah Cave for Hughes Hubbard & Reed_

10 THE COURT: Please be seated_ I gather that all of

11 you are relatively happy with this settlement, but I'd

12 appreciate making sure that the record reflects why that is.

13 And I gather we have nobody here that is objecting, although I

14 presume there was notice of this final hearing. Is that true?

15 MR. KAUFMAN: Yes, your Honor. There was notice of

16 the hearing. We have not received any objections.

17 THE COURT: Well, one of you ought to tell me what a

18 wonderful job you did.

19 MR. KAUFMAN: Good morning, your Honor.

20 THE COURT: Good morning_

21 MR. KAUFMAN: Evan Kaufman for Lerach Coughlin for the

22 plaintiffs. Were very pleased with the terms of the

23 settlement. We believe that the settlement is fair,

24 reasonable, and adequate and should be approved by the Court.

25 The settlement was reached after mediation after a hard-fought


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1 litigation. The settlement is for $2,8 million in cash

2 which --

3 THE COURT: Where does the figure $10 million plus

4 come to my attention from?

5 MR. KAUFMAN: Because our damage consultant estimated

6 the total recoverable damages at the conclusion of the case

7 would be approximately $10.2 million in damages. So as a

8 result --

9 THE COURT: And how did it all come about?

10 MR. KAUFMAN; The damage estimate?

11 THE COURT: The damages.

12 MR. KAUFMAN: Oh, the damages. We allege in the

13 complaint-that during-the 'class period, which was August 2nd of

14 1939 through October 21, 2003, that PWC and -- let me take a

15 step back. That Hibernia's financial statements were

16 misrepresented and contained omissions of material fact.

17 Curing the class period, PWC reported its opinion that

18 Hibernia' s financial statements had been presented fairly, and

19 in all material respects the financial position of Hibernia

20 Foods PLC and its subsidiaries and its financial statements

21 were in compliance with GAP. As alleged in the complaint,

22 especially to investors, the company's record sales, gross

23 margins, and revenues were a sham and that defendant's material

24 plea to the company's revenues and gross margins and other

25 financial results through certain accounting improprieties.


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1 For example, Hibernia repeatedly defaulted on payments

2 to lenders and suppliers. They sold products at deep

3 discounts. They recognized revenues on products not shipped

4 With respect to failure to pay suppliers, they even failed to

5 pay PWC for services rendered, and they failed to write off

6 frozen inventory.

7 We allege that ?WC ignored Hibernia's numerous GAP

8 violations and red flags and issued a clean audit opinion for

9 2000 and 2001 and 2002. As a result of the material

10 misrepresentations in Hibernia's financial statements,

11 Hibernia 's ADRs were artificially inflated.

12 Then, at the end of the class period in October 2003,

13 Hibernia was placed into receivership by-one of its creditors,

14 General motors Acceptance Corporation, and shares of Nibernia's

IS ADR's had become virtually worthless, falling to as low as 7

16 cents. And that's where the damages come from.

17 THE COURT: So why didn't Price Waterhouse, for its

18 failures, pay $10 million?

19 MR_ KAUFMAN; I'm sorry? Why didn't they pay $10

, 20 million?

21 THE COURT: Instead of 2.8.

22 mR. KAUFMAN: Well --

23 THE COURT: They were the people who were paying the

24 money. Right?

25 MR. KAUFmAN: Well, of Course, we --

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1 THE COURT: No. Its a yes-or-no question. For whom

2 is the $2.8 million coming?

3 Na.. KAUFMAN: The $2.8 million is coming from Price

4 Waterhouse, which was Hibernia's outside auditor.

5 THE COURT: And what I'm asking is if the damages were

8 $10 million plus, why did it come about that you thought it was

7 a wonderful thing to settle for a quarter of that?

8 MR. KAUFMAN: Well, first of all, it is because PWC

9 was only the outside auditor of Hibernia. It was the only

10 solvent defendant. $o PWC had strong defenses, which after a

11 prolonged litigation, there was a risk that they could have

12 been successful. While we thought --

13 THE COURT: Isn't there always a risk in litigation?

14 MR. KAUFMAN: Yes, your Honor_ That's why it's often

15 very difficult to obtain the maximum damages in connection with

16 a settlement prior to a judgment in the case. We believe that

17 the 27 percent of the total damages is an excellent recovery,

18 and by comparing it to other class action settlements, it's a

19 very, very good percentage, considering that the company itself

20 is insolvent.

21 In order tor us to prove this case, there would have

22 been a number of hurdles. For example, while we allege all of

23 these accounting improprieties, because the company is

24 insolvent and because there wasn't a restatement, it would have

25 been very difficult to quantify the actual accounting


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1 misrepresentations, and it would have been very difficult to

2 obtain discovery from the people that were directly involved

3 with that, because the company is no longer in existence.

4 THE COURT: Well, but the people are around_ Right?

5 MR. KAUFMAN: I presume the people are located

6 throughout Europe. Correct.

7 THE COURT: So it's conceivable that those people

6 could have been examined, right, but you chose not to do that?

9 MR. KAUFMAN: Well, that would have occurred had we

10 not reached a settlement. We --

11 THE COURT: But it went into that calculus, I hope,

12 that you could have or could not, as the case may be, through

13 discovery found out what had happened and perhaps had more

14 people that you could have gotten money from for the people who

15 lost in the class that you're representing.

16 MR. KAUFMAN: Absolutely. That's always a goal, to

17 obtain as much money for the class members. Because Hibernia

18 itself, the company is out of business, it would have been very

19 difficult to obtain any type of money judgment from them.

20 There were two other defendants named in the case, individual

21 defendants, senior executives of Hibernia which we've been

22 unable to locate.

23 With respect to what we would have done in pursuing

24 , litigation is -- and T think we've demonstrated up to this

25 point that were willing to do what it takes in order to obtain


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1 as much money as possible for the class. We realized that much

2 of the key documents that were not located in the United States

3 were in the possession of Hibernia's receiver. As a result, we

4 contacted legal counsel for Hibernia's receiver. we arranged

5 to travel, and we traveled to Ireland and --

6 THE COURt: Why was that onerous?

7 MR. KAUFMAN: What was onerous was actually obtaining

8 the documents. Because the company was insolvent, people went

9 in and they took the documents, and they just took them and

10 shoved them into-boxes and just stored them in warehouses

11 throughout Europe. So we had to comb through what was millions

12 of pages of documents in order to identify ones that could

13 support our claims, and we did that—whIle•we were over there.

14 TiiE COURT: Where did you have to go to do this

15 onerous work?

16 MR- KAUFMANt We went to Dublin and Manchester, united

17 Kingdom.

18 THE COURT: My concern is -- I gather you may have

19 gleaned -- is that while I'm prepared to take you at your word,

20 what it does is it results in what seems to me a tiny gain for

21 the class members of like 11 cents a share. But that doesn't

22 really help me, because I don't know what the shares would be

23 fully valued at, do you? I mean, when they bought these

24 shares, what were they paying during the class period?

25 MR. KAUFMAN: I believe the damage analysis -- which

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1 is very complicated, and the plan of allocation accounts for

2 when individuals purchased the shares, when they sold the

3 shares. I believe that certain class members can obtain up to

4 $1.32 per share in connection with the settlement.

5 THE COURT: But do you have the answer as to my

6 question, which is what they would have gotten if they sold it

7 on the day they bought it?

8 MR. BAUER: Your Honor, if I may be heard on that.

9 With respect to the damages of plan of allocation, this stock

10 traded -- the AMR traded during the class period about $7 a

11 share_ However, not all $7 was inflation. There was some

12 value for the stock. We claim that the stock was inflated to

13 some extent.

14 And under the way damages are analyzed and under Dura,

15 the Supreme Court precedent, we- looked-at what happened when

16 some disclosures were made with respect to correcting the

17 misstatements, and there were about five disclosures made. And

18 when those disclosures were made, various pieces of the

19 inflation came out. If you add up all those pieces, the

20 damages per share, put it at the beginning and held it beyond

21 the bad news, we would have alleged it constituted about $1.32

22 per share. The defendants don't agree with that, They said

23 there was no damages. But in our view, $1.32 per share was

24 about the maximum that we could have recovered as damages.

25 So, you know, 11 cents is what the PSLRA requires us


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1 to say is an average of the recovery per share. If you look at

2 all the shares and divide the recovery over all the shares,

3 it's 11 cents per share. Some people didn't get all that in

4 damages. So people got less. If you only bought it at the

5 end, you only have about 20 cents of the damages.

6 The plan of allocation takes each person who makes a

7 claim_ We look at their transactions and determine how much of

8 their losses would be in the damage formula, and everybody

9 recognized -- each person has a recognized claim from the

number of shares they bought to how much they paid for it and

11 if they sold it, how much that affects it, You know, if they

12 bought before the first disclosure and sold right after the

13 first disclosure, they'd only have I think about 36 cents of

14 loss, So their recognized claim is different from somebody who

15 held it all the way to the end.

16 But each person will be allocated a recognized claim

17 At the end of the day, all the recognized claims are added up

18 and compared to what the settlement fuad is. If everybody

19 filed a claim, we would expect that the total claim should be

20 about $10.2 million. It's possible that not everybody will

21 file a claim. That frequently doesn't happen. Some people

22 will also have had other transactions in the class period where

23 they may have had a gain. They might have bought for 4 and

24 sold for 5 in the early part of the class period, and if that

25 reduced their overall loss, that will come out of their claim.


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1 THE COURT: But on average, what I gather you're

2 telling me, if I understand you correctly -- and I know saying

"avera9e 4 makes it sound easy, but it isn't so easy to

4 calculate -- it would be $1.12 a share.

5 MR. BAUER; I don't believe it would be $1.32 as An

6 average, because the $1.32 is for people who bought in roughly

7 the first half of the class period and held all the way till

B the end. So a lot of those people will have sold in the second

9 half --

10 711E—COURT: Are those the majority of the

11 shareholders?

12 MR. BAUER: I don't think I can speculate as to

13 whether it's a majority or minority or --

14 THE COURT: Don't you know when the people bought?

15 MR. BAUER: well, we have data from the exchanges

16 which tell us how many shares are traded in a day_

17 TRE COURT: Each day?

18 MR. BAUER: each day, and what the price for the day

19 was and what the high and low for the day was That gives you

20 a good way to estimate what -- based on formulas that the

21 damage experts do, you estimate what the losses are, but you

22 can't be precise until you actually get the claims in and see,

23 you know, did this person pay at the high end of the day or the

24 low end of the day, the middle of the day, when did they --

25 THE COURT: Right.

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1 MR. BAUER: Some people buy and sell very quickly. So

2 the formula takes out an estimate of the end-of-day trading.

3 There's estimates based on is it an institutional investor or

4 is it an individual investor. Individual investors tend to

5 trade more. So you put in parameters that estimate what the

6 average trader on that day was and, you know, when his sales

7 were. And that's a very complicated formula, and we have

a experts that do that. They come out with these estimates Of

9 damage, and then that's -- based on the number of shares that

10 they believe were damaged and the $2.8 million, it's roughly 11

11 cents per share. Average per share, it's difficult to average.

12 If Bill Gates walks into a bar with 20 people, on average

13 they're all millionaires, but, you know,.that'may not be really

14 appropriate to call them all millionaires_

15 THE COURT: Maybe I misunderstood you. What does your

16 $1.3 figure represent?

17 MT. BAUER: That's the maximum loss one class member

18 would have had if he had bought in the early part of the class

19 period and held all the way till the end.

20 THE COURT: Even if he got 11 cents?

21 MR. BAUER Even if he got 11 cents, that recovery

22 would be more than the median recovery that academic studies

23 have shown have been recovered in class actions over the last

24 time period since the ?SLRA was introduced.

25 There was a report called the Cornerstone Report,

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1 which says that on a review of all the actions that were filed

2 since the PSLRA was instituted, they do a study that shows that

3 the median recovery, half more and half less, in securities

4 class actions that have been approved for settlement range, I

5 believe from 2000 the high recovery percentage was 7.2 percent.

6 2004's recovery was about 7.1 percent. So our recovery of 27

7 percent is quite considerably larger than the median recovery

8 approved over that entire period and certainly over recent

9 recoveries.

10 THE COURT: Yeah. But with this little amount of

11 money, it doesn't seem like very much.

12 MR. BAUER! Well, its not a huge case to start with.

13 You know, the damages on our -- our damage expert's estimate is

14 $10.2 million. That's not --

15 THE COURT! Well, your accounting folks and I guess

16 the law thought -- Goldberger at least -- about the

17 complexities of the litigation. Other than the fact that you

18 were forced to go to places like London and Manchester and

19 Dublin, which I am sure was onerous, what are the other

20 problems that made this a complex litigation?

21 MR. BAUER: Well, 1 can speak to that, but Mr. Kaufman

22 is prepared to do that.

23 THE COURT: Fine.

24 MR. KAUFMAN: Your Honor, there were essential risks

25 Of establishing liability on the part of PC. Despite our

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case, because this is a section 10(b) and 28 claim under the

2 Exchange Act, you must establish scienter on the part of PriCe

3 Waterhouse, and that would have been -- it would have been

4 difficult to do, because in connection with discussions we've

5 had with them and mediation papers and so forth, they raised

6 some of their arguments.

7 One of their arguments that they were going to raise

8 is that the PWC expended 1600 hours for just the 2002 audit

9 alone and generated more than 150,000 pages at working papers.

10 Not only that, but they're also closely shadowed by individuals

11 from PCs global capital markets group, who, according to PWC,

12 are trained and experienced in the application of U.S.

13 accounting principles aad SEC requirements.

14 So that would have been, we believe, a defense, a

15 strong defense to cur argument that they ignored some et these

16 red flags. PC could have had the argument that a fraud was

17 perpetrated on them as well, and that would have been a hurdle

18 for us to overcome.

19 THE COURT! Turning to the time that you spent and the

20 comparatively large amount of money you're asking for in fees

21 here, what is it that took you the most time to get to this

22 figure of $1,558,000?

23 MR_ KAUFMANt Your Honor, first, T'd like to point out

24 that the amount of legal fees we're asking for is a fraction of

25 the amount of time that we actually spent on the case.

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1 THE COURT: well, that may be, but j_t's twice as much

2 as I ever give in terms of percentages, or have given. This is

3 really close to 30 percent, and I usually am at the 15 percent

4 area.

5 MR. KAUFMAN: Your Honor, our expenses have been --

6 normally there's -- when a personal fee is awarded, there is

actually a multiplier to the lodestar.

8 THE COURT: Yeah, but there's no compulsion for me to

9 use that.

10 MR. KAUFMAN: No, there isn't, but it's extremely

11 unusual in class action settlements for the attorneys to

12 actually request a fee that's less than --

13 TI-1 COURT: But if you'd requested a little more than,

14 there wouldn't have been any left.

15 MR. KAUFMAN: Your Honor, our

16 TER COURT: You don't really think that's a good idea,

17 do you?

18 MR. KAUFMAN: Actually, our fee, the 23 percent, was

19 directly negotiated with our institutional client, Central

20 Labor Pension Fund.

21 THE COURT: The people that we're talking about

22 getting 11 cents, you talked to each of them and said, is it

23 okay if I take a million five?

24 MR. KAUFMAN: Well, we did. Actually, We provided

25 notice to all of the

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1 THE COURT: I understand you provided notice, but did

2 you v:J through how much of the settlement you were taking?

MR. KAUFMAN; We're not asking for a million five,

4 your Honor.

5 THE COURT: No. No. But that's the way it figures

6 out in the first instance in the schedule. That would be

7 almost a million dollars to Milberg and 16S to Michael Swick

8 and 391 to Lerach Coughlin and a few more dollars to someone

9 else, I guess. Cavanar & O'Hara didn't have any attorneys'

10 fees. I'm not saying that's how you came out. I'm saying that

11 was, apparently, what you did expend in the way of hours.

12 Isn't that fair?

la MR. KAUFMAN. Yes, your Honor. We spent a lot of time

14 on this case. We --

15 THE COURT: Yeah. My queStion is really a simple one.

16 What did you do for all that time, other than going to

17 Manchester and Dublin and reviewing these million pieces of

18 paper, which I presume is what you're saying based -- and

19 presume, further, talking to your defendant, to see what you

20 could settle the case for?

21 MR. KAUFMAN: Your Honor, we did a lot of work.

22 Before we even filed the amended complaint, we spent a lot of

23 time analyzing Hibernia's public statements during the class

24 period. We collected and reviewed analysts' reports and major

25 financial pews service reports on Hibernia. We interviewed and

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1 followed up with former Hibernia employees and the factual

2 circumstances underlying the allegations. We also extensively

3 researched the applicable law underlying our claims.

4 THE COUT I thought you couldn't find a lot of those

5 people. How many people did you interview?

6 MR. KAUFMAN: we interviewed -- I don't know the

7 precise number. We interviewed several people, and we

8 reference several people in the amended complaint. We

9 interviewed more people than we actually even used to support

10 our allegations. We then -- PWC then filed a motion to

12 dismiss, which we opposed, and the Court denied their motion to

12 dismiss.

13 Following the Court's denial of Price Waterhouse's

14 motion to dismiss, we aggressively pursued documents and

15 discovery from PWC. We received and reviewed over 130,000

16 pages of documents produced just by Price Waterhouse Coopers.

17 Then, as I mentioned before, we traveled. We spent a

18 week in Europe going through warehouses, going through boxes of

19 documents that were not organized in any type of fashion,

20 trying to obtain evidence to support our claims. And I can

21 tell you it was in the a fun trip, your Honor. I was

22 personally there. It was a lot of hard work early in the

23 morning till late at night looking through documents. It was

24 not even close to what it's --

25 THF COURT; How many of you went?


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1 MR. KAUFMAN: Four of us went there, your Honor.

2 THE COURT: Okay. Tell me something about this

3 interest concept that you include in your attorneys' feos 1

4 request, When does that begin, in your view?

5 MR. KAUFMAN: I believe it begins when the money was

6 deposited in escrow by Price Waterhouse, and it would earn --

7 that money --

a THE COURT! When was that?

9 MR. KAUFMAN: When the $2.8 million was deposited to

10 escrow.

11 THE COURT: When was that? This can't be -- this is

not a trick question.

13 MR. KAUFMAN: It was the end of March.

14 THE COURT: Of this year?

15 MR. KAUFMAN: 2006, yes.

16 THE COURT: And what would that amount to as of

17 tomorrow, assuming we sign this judgment?

18 MR. XAUFMAN: I don't have the precise interest rate

19 that was being applied to that money.

20 THE COURT! You must have an interest rate, or you

21 couldn't have asked for it. Well, you could have, but you

22 shouldn't have.

23 MR. KAUFMAN: It's about 4 and a half percent.

24 THE COURT: All right. And that would have been on

25 the $644,000. Is that right?


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1 MR_ KAUFMAN: Well, the interest would be earned on

2 the entire $2.8 million.

3 THE COURT: Why isn't it just on what you're expecting

4 or thinking you deserve in the way of a fee?

5 MR. KAUFMAN: The interest that is earning on the

6 other funds would be attributed to the class, your Honor.

7 THE COURT: What? I didn't hear you.

8 MR. KAUFMAN: Well, the interest earned on the

9 entire -- interest would be earned on the entire amount, and

10 only a portion of it would be attributed to attorneys' fees and

11 expenses.

12 HE COURT; Yeah. That's what I've been -- your

13 interest on top of your $644,000 would only be interest on that

14 $644,000. Is that right?

15 MR. KAUFMAN: Correct, your Honor.

16 THE COURT: Okay. Anything else?

17 MR. KAUFMAN: Your Honor, one other thing I'd like to

19 point out is that ordinarily in cases where there are class

19 action settlements, the plaintiffs' attorneys would request a

20 percentage of the fee -- a percentage of the settlement --

21 excuse me -- plus a reimbursement for expenses.

22 Here, we're expecting -- sorry. We're requesting a

23 percentage for attorneys' tees, and we're going to be deducting

24 expenses out of our attorneys' tees.

25 THE COURT: And on the schedule, they come to a lot

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1 more -- well, not a lot more, but they come to $465,000.

2 MR. KAUFMAN: Yes, which is most of the requested

3 . attorneys' fees.

4 THE COURT; And you're deducting that from your

5 $644,000?

6 MR. KAUFMAN: Yes.

7 THE COURT: Okay. And I presume that, Ms. Cave, you

6 think this is a wonderful thing too, or maybe you don't if you

9 really came to this result screaming.

10 M. CAVE: Yes, your Honor. well, we're certainly

11 pleased to hopefully today have the litigation over This, in

12 fact, was the first securities fraud class action in which the

13 United Kingdom Price Waterhouse Coopers accounting firm was

14 named, and so we certainly approached this particular piece of

ls litigation as certainly precedent setting for us and also with

16 an eye to not wanting to open the door to other class actions

17 down the road.

18 And so, with that in mind, we fought a hard fight in

19 this case and certainly put up all of the defenses that we

20 could. We also saw additional defenses that we had planned to

21 raise at the summary judgment stage, Including loss causation,

22 which we thought was a particularly difficult issue for the

23 plaintiffs in this case, in light of the fact that there was a

24 substantial drop in the price of Hibernia's ADRs in November

25 2001 based on some announcements by the company at that time


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1 that had nothing to do -- or did not signify a corrective

2 statement about the company's financial statements.

3 111 addition, we have actually interviewed the

4 plaintiffs' principal confidential witness. we went to England

5 and interviewed her, and based on that, based on that

6 interview, it was our belief that while there were a number of

7 employees at Hibernia who were displeased with the company,

8 that we still had substantial defenses to the point that

9 Mr. Kaufman raised about PWC's knowledge of these practices

10 that we were planning to raise at the summary judgment stage,

11 and we were confident that if we were to proceed to trial, that

12 we would have substantial defenses.

13 However, as in every Case, as Mr. Kaufman also pointed

14 out, there's significant risks. And in any situation where you

15 have a jury deciding the facts, those risks will be taken into

16 account.

17 At the mediation, however, we had a very candid

15 discussion with the plaintiffs about the strengths and

19 weaknesses of our respective cases, and Judge Wayne Phillips is

20 an experienced mediator in securities fraud class action cases

21 and really made the parties lay their cards on the table and

22 worked us hard over the course of the day. And, you know, we

23 came to this agreement, and I think --

24 THE COURT: Did you go with them to Dublin?

25 MS. CAVE: I did not go with the plaintiffs to review


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1 the documents in Dublin. We had reviewed, obviously, all of

2 our documents, and if the litigation proceeded, we were in

3 negotiations with the plaintiffs about a way to make the

4 documents available to us here in the United States. There

5 was, you know, various copying and scanning procedures that

6 were under discussion.

7 So with that, we think that the plaintiffs counsel,

0 in light of all of the defenses that we have confidence in,

9 have done a remarkable job in obtaining this discovery and for

10 that reason hope that the Court will approve the settlement

11 today.

12 THE COURT: I'm not sure I understand the concept that

13 you advance about not opening the door. I understand that

14 concept. T don't understand how it relates to whether or not

15 this is a fair settlement_

16 MS. CAVE; Well, in terms of giving -- certainly this

17 number that PWC has agreed to pay is a public number, and 50 we

18 certainly didn't want -- in terms of it being -- we wanted the

19 number that we agreed to pay as a number that was not something

20 that would lead other plaintiffs to think that the UK Price

21 Waterhouse coopers firm caves in easily, and this gives the

22 impression that, at least from PWC's perspective, just because

23 they're sued in the United States doesn't mean that they are

24 going to, you know, just cave in easily and throw a lot of

25 money on the table.

SOUTHERN DISTRICT REPORTERS, P.C.(212) 805-03"

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1 THE COURT: Well, but of cOurse the other side of that

2 coin is going to trial and winning.

3 M. CAVE: That's true, but the other side of that

4 coin is also going to trial and losing. So --

5 THE COURT: Yeah. But part of this settlement -- or

6 my job with respect to this settlement is to figure out whether

7 this was really a complicated case in which there was a real

8 likelihood that the plaintiff or the class would lose, and from

9 what you're telling me, you're not that clear. Is that fair,

10 or am I overstating your thinking?

11 MS. CAVE: Well, you know, we certainly were confident

12 in the strength of our defenses, but we weren't overconfident

13 is I guess the message that I'm trying to communicate.

14 THE COURT: Well, if you were overconfident, you would

1S have gone to trial.

16 MS. CAVE: Right. And in any case, there are -- well,

17 for example, while we were able to speak to one of the

18 plaintiffs' principal witnesses, it was uncertain whether we

19 were going to be able to speak to all of them, and without

20 speaking to them and without knowing what they were going to

21 say before we went to trial, that's a significant risk to take,

22 to wonder what somebody will say when there are 12 people

23 sitting in the jury box.

24 THE COURT: You mean you wouldn't have been able to

25 just take discovery --


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1 M. CAVE: Well we were hoping to proceed with

2 discovery through the Hague Convention, for example, but, you

know, that in itself is a cumbersome and very expensive

4 process_ That --

5 THE COURT: That would have been another hardship,

6 maybe, Paris._

7 All right. I gather you thought it was best to settle

8 that case before that proceeding began.

9 MS. CAVE: That's correct, because it looked like --

10 as tar as we know, there wasn't anybody in Paris, but there

11 were witnesses in other places in Europe and other unfavorable

12 locations and the cold north of England that we were looking to

13 be heading to in the middle of last winter. While Dublin is

14 certainly a lovely place to be, there are other more remote

15 locations that were not as enticing.

16 TEE COURT: All right, Anything else you want to add,

17 either of you?

18 MR. KAUFMAN: Your Honor, just for the record, I just

13 want to add that approximately 3,000 copies of the notice were

20 disseminated to the class members, and not a single class

21 member has objected to the settlement or our fee request.

22 THE COURT: Very well. I have your proposed final

23 judgment somewhere. I guess I didn't bring it up. But we will

24 look at it and think a little bit more and hopefully get it out

25 certainly before the end of the year one way or another, or


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1 I'll write something, But I think probably it will happen

2 quickly.

3 Anything else? Thank you all.4 o0o

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Documents

In Re: Hibernia Foods, PLC Securities Litigation 04-CV ...securities.stanford.edu/filings-documents/1031/HIBNYPK04-01/... · 8 1(,) BefOre: DOC #, 9 HON. HAROLD AER, JR., 10 ... That