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Lehman Feb 22
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S&P Settles Australian Lawsuit Over Lehman Bros Collapse
Feb 20, 2016 | Reuters
...The Federal Court lawsuit was brought by 92 Australian groups who had bought synthetic collateralized debt obligations issued by Lehman Brothers Australia between 2005 and 2007.The applicants alleged Standard & Poor's engaged in misleading and deceptive conduct by assigning AA and AAA credit ratings to the Lehman Brothers... -
The Big Short: Moree Beats Wall Street In Law Suit
Feb 20, 2016 | The Australian
By Leo Shanahan
They are the Australian councils, charities and church groups who took on the might of Wall Street — and won. “You don’t stuff with bush people,” said a jubilant Moree Mayor Katrina Humphries yesterday after the council and its fellow litigants finalised a settlement believed to be worth more than $100 million with the world’s... -
Settlement Reached In Class Action Against McGraw-Hill Financial, Standard & Poor's Over Lehman Brothers Collapse
Feb 20, 2016 | ABC News (Au)
By David Weber
A substantial settlement has been reached in a class action involving dozens of councils and organisations related to the collapse of Lehman Brothers Australia. The group of 92 members led by the City of Swan in Western Australia and Moree Plains Shire in New South Wales includes investors, councils, churches and charities. -
Councils Hail 'David and Goliath' Legal Win To Recoup GFC Losses
Feb 19, 2016 | Shanghai Daily
A substantial settlement has been reached in a class action involving dozens of councils and organisations related to the collapse of Lehman Brothers Australia. The group of 92 members led by the City of Swan in Western Australia and Moree Plains Shire in New South Wales includes investors, councils, churches and charities.
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Standard & Poor
Full Text of Stories Below
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S&P Settles Australian Lawsuit Over Lehman Bros Collapse
Feb 20, 2016 | Reuters
A substantial settlement has been reached in a landmark A$200 million ($143 million) class action brought against ratings agency Standard & Poor's, according to the law firm for the local governments, churches and charities bringing the suit.
London-based law firm Squire Patton Boggs said on Saturday that the settlement, which is subject to court approval, is likely to have widespread international ramifications for similar actions against Standard & Poor's (S&P) due to the number of products it rates throughout the world.
Financial terms of the settlement were confidential, Squire Patton Boggs said. Litigation funder IMF Bentham (IMF.AX) said it would generate revenue of about A$52 million and a pretax profit after capitalized overheads of around A$47 million as a result of the settlement.
The Federal Court lawsuit was brought by 92 Australian groups who had bought synthetic collateralized debt obligations issued by Lehman Brothers Australia between 2005 and 2007.
The applicants alleged Standard & Poor's engaged in misleading and deceptive conduct by assigning AA and AAA credit ratings to the Lehman Brothers products.
S&P denied the allegations. It could not immediately be reached for comment on the settlement.
...The Federal Court found three years ago that Lehman Brothers Australia had engaged in misleading and deceptive conduct, breached fiduciary duties, breached contracts and acted in negligence toward plaintiffs.
The finalization of that matter enabled the launch of the class action against Standard & Poor's in 2013.
For full story: http://uk.reuters.com/article/us-australia-s-p-court-idUKKCN0VT04T
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The Big Short: Moree Beats Wall Street In Law Suit
Feb 20, 2016 | The Australian
By Leo Shanahan
They are the Australian councils, charities and church groups who took on the might of Wall Street — and won.
“You don’t stuff with bush people,” said a jubilant Moree Mayor Katrina Humphries yesterday after the council and its fellow litigants finalised a settlement believed to be worth more than $100 million with the world’s leading ratings agency, Standard & Poor’s, over financial losses sustained during the global financial crisis.
The 90 Aussie groups lost almost $300m on toxic securities peddled by failed investment bank Lehman Brothers and given the tick of approval by Standard & Poor’s.
But after a six-year legal battle they have come out on top.
Combined with the previous win over the Lehman Brothers liquidator, the group as a whole could get a payout of more than what they lost, when interest is calculated. Moree Plains Shire Council was the lead plaintiff in the lawsuit.
...Their investments were made in the fiendishly complex financial products that fuelled the toxic fire of the GFC. Collateralised debt obligations were sold by Lehman Brothers between 2004 and 2005 and received Standard & Poor’s AAA rating.
In a twist, CDOs were the securities largely responsible for the collapse of the 158-year-old company in 2008.
After they lost hundreds of millions of dollars in the GFC, the groups pursued both the liquidators of the failed Lehman Brothers and S&P in the Federal Court, claiming they would not have invested in the CDOs if not for the high ratings given to them by S&P. Pressure from Australian councils forced a world-first Federal Court ruling in 2012 that found S&P could be liable for the ratings it gave the toxic financial products.
In December last year, Lehman’s Australian liquidators were able to unlock about $500m to provide to Australian creditors, providing about 80c in the dollar to the Australian group of councils and charities.
The epic legal journey spanning over six years between the High Court, Federal Court and US courts has cumulated in the settlement with S&P.
In 2008, Ms Humphries said, the case against Lehman and S&P was “the first thing to come across (her) desk”.
...Ms Humphries said she wouldn’t be popping champagne corks until the settlement was finalised. “I’m very, very cautious,” she said. “I will not be opening a bottle of champagne till that money is in our account.”
Mick Wainwright, Mayor of Western Australia’s City of Swan, said the agreement vindicated the “lengthy international pursuit” of Lehman and S&P. “As one of the few Australian local governments prepared to stand up to these international giants of the finance sector, we hope this settlement will finally see the conclusion of this eight-year saga,” Mr Wainwright said.
In a statement to the Australian Securities Exchange yesterday, IMF said the settlement was a “significant step” in the settlement of the class action and final distribution of the Lehman funds.
For full story: http://www.theaustralian.com.au/business/legal-affairs/the-big-short-moree-beats-wall-street-in-law-suit/news-story/f3b5880f7336ca867559fee966cfedcc
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Feb 20, 2016 | ABC News (Au)
By David Weber
A substantial settlement has been reached in a class action involving dozens of councils and organisations related to the collapse of Lehman Brothers Australia.
The group of 92 members led by the City of Swan in Western Australia and Moree Plains Shire in New South Wales includes investors, councils, churches and charities.
They had bought synthetic collateralised debt obligations issued by Lehman Brothers Australia and took the action against McGraw-Hill Financial and Standard & Poor's.
The applicants alleged Standard & Poor's engaged in misleading and deceptive conduct by assigning AA and AAA credit ratings to Lehman Brothers products.
City of Swan Mayor Mick Wainwright described the confidential settlement as "a welcome end to the monumental David and Goliath style action".
He said the agreement vindicated the lengthy international pursuit to recover funds.
"As one of the few Australian local governments prepared to stand up to these international giants of the finance sector, we hope this settlement will finally see the conclusion of this eight year saga," Cr Wainwright said.
While Moree Plains Shire helped lead the Standard & Poor's case, the City of Swan had joined the Shire of Wingecarribee and the Shire of Parkes in the Lehman Brothers case.
City of Swan Executive Manager Colin Cameron said it looked like the end of a long road was near.
"We've been working towards this for many years, this started with our action against Lehman Brothers to try and knock out a Deed of Company Arrangement that would've given us less than 6 cents in the dollar," he said.
"We were successful in that and then we went to the Federal Court to prove ourselves against Lehman Brothers.
"And now this final settlement we've made with Standard & Poor's brings to an end a long, sad and sorry saga but it's a good result for our group, absolutely."Case highlights need for transparency in assigning credit ratings
It was nearly three years ago that the Federal Court found Lehman Brothers Australia had engaged in misleading and deceptive conduct, breached fiduciary duties, breached contracts and acted in negligence towards plaintiffs...
For full story: http://www.abc.net.au/news/2016-02-20/councils-hail-%27david-and-goliath%27-legal-win-to-recoup-gfc-losses/7186012
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Councils Hail 'David and Goliath' Legal Win To Recoup GFC Losses
Feb 19, 2016 | Shanghai Daily
A substantial settlement has been reached in a class action involving dozens of councils and organisations related to the collapse of Lehman Brothers Australia.
The group of 92 members led by the City of Swan in Western Australia and Moree Plains Shire in New South Wales includes investors, councils, churches and charities.
They had bought synthetic collateralised debt obligations issued by Lehman Brothers Australia and took the action against McGraw-Hill Financial and Standard & Poor's.
The applicants alleged Standard & Poor's engaged in misleading and deceptive conduct by assigning AA and AAA credit ratings to Lehman Brothers products.
...While Moree Plains Shire helped lead the Standard & Poor's case, the City of Swan had joined the Shire of Wingecarribee and the Shire of Parkes in the Lehman Brothers case.
City of Swan Executive Manager Colin Cameron said it looked like the end of a long road was near.
"We've been working towards this for many years, this started with our action against Lehman Brothers to try and knock out a Deed of Company Arrangement that would've given us less than 6 cents in the dollar," he said.
"We were successful in that and then we went to the Federal Court to prove ourselves against Lehman Brothers.
"And now this final settlement we've made with Standard & Poor's brings to an end a long, sad and sorry saga but it's a good result for our group, absolutely."Case highlights need for transparency in assigning credit ratings
It was nearly three years ago that the Federal Court found Lehman Brothers Australia had engaged in misleading and deceptive conduct, breached fiduciary duties, breached contracts and acted in negligence towards plaintiffs.
The finalisation of that matter enabled the action against Standard & Poor's.
For full story: http://www.shanghaidaily.com/AustraliaPlus/Councils-hail-David-and-Goliath-legal-win-to-recoup-GFC-losses/shdaily.shtml
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Standard & Poor
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