Joint Declaration of Lynn L. Sarko and Marc I ... - Cohen Milstein

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. Defendants’ actions were presumptively prudent. Merrill was a well-run company adversely impacted by an unprecedented and unpredictable credit and liquidity crisis, which impacted and impaired all financial institutions, and could not be said to be itself on the verge of collapse in light of the $50 billion paid by Bank of America (the value based on Bank of America’s stock price at the time the merger was announced). The notion that a company worth $50 billion is not viable and is permanently impaired “blinks at reality.” Id. at pp. 21-26; c. The events of the week of September 15, 2008, were driven by industry-wide market forces (not anything concealed by Merrill) and do not make an ERISA case, let alone a case invoking a lengthy class period. Id. at pp. 24-26; d. A few days of tumult in early September should absolutely not have triggered a panicked shutdown of the Plans, especially given the price paid by Bank of America for Merrill reflected a 70% premium to market for participants. Id. at pp. 14-15; e. Plaintiffs’ claims were nothing more than a disguised diversification claim, specifically carved out of ERISA in employer stock cases. Id. at pp. 19-20; f. Neither Merrill nor the Administrative Committee had discretion over the investment and management of Plans’ assets and Defendant O’Neal had no fiduciary discretion or authority whatsoever with regard to the Plans. Id. at pp. 30-35, 39-40; g. Removing Merrill stock as a Plan investment or selling Merrill stock out of the Plans would have violated insider trading laws. Id. at pp. 40-41; and h. ERISA § 404(c), 29 U.S.C. § 1104(c), placed the responsibility for the Plans’ investments on the individual participants and served as an absolute defense to Plaintiffs’ claims. Id. at pp. 52-53. 15. Motions to dismiss are often routine, even perfunctory, but these motions were not. Defendants used their dismissal motions to lay the groundwork for series of attacks on the case, and the briefing was extensive. 16. Plaintiffs filed their Memorandum of Law in Opposition to the Motion to Dismiss on October 6, 2008. Defendants replied on November 19, 2008. (Dkt. No. 77). 17. Plaintiffs were in the process of preparing for the oral argument on the Motion to Dismiss, which was scheduled for January 16, 2009, at the time the Settlement was reached. 5
C. Discovery 18. Plaintiffs started document discovery at the outset of the case with statutory and informal requests for a variety of ERISA-related materials. In response to these requests, Defendants produced the Plan documents, trust agreements, summary plan descriptions and material modifications, 5500s, summary annual reports, and a Plan prospectus, information from which was incorporated into the Complaint and relied upon in opposition to Defendants’ motion to dismiss. 19. Although formal discovery had yet to commence, a key component of the Settlement is Plaintiffs’ right to conduct extensive discovery in order to confirm that the Settlement is fair, reasonable, and adequate. Settlement Stip. § 8.1.3. Between January and June 2009, the discovery process has included the following: a. Extensive negotiation of the production of relevant information and documents in order to ensure full and fair disclosure of ERISA-specific information and documents and information pertaining to the corporate malfeasance alleged in the Complaint. In addition to Plan documents, Defendants’ production included materials presented to Merrill’s Board of Directors bearing on the riskiness of Merrill stock, and documents, including minutes and presentations, relating to the work of the Committees whose members are named as fiduciaries in the Complaint; b. Coordination with counsel for the Defendants and counsel in the Bond and Securities actions of the establishment and maintenance of electronic, case-specific document depositories to facilitate the efficient review, coding and management of documents produced by the Defendants, including more than 38 million pages of documents produced by the Defendants not only to Plaintiffs, but also to the SEC, the New York Attorney General, and/or in connection with the Merrill Lynch merger litigation, County of York Employees Retirement Plan v. Merrill Lynch & Co., Inc., et al., 08- 4066 (Del. Ch.); c. Development of a highly efficient document organization, coding and management program designed to maximize quality of information obtained in the document review process; d. Review and analysis of the millions of pages of documents that the document discovery process yielded; 6
Page 1 and 2: -----------------------------------
Page 3 and 4: A. Class Certification is Warranted
Page 5 and 6: “27.5% fee request,” which is m
Page 7: 12. The initial and subsequent Comp
Page 11 and 12: 25. Plaintiffs insisted that any se
Page 13 and 14: of Merrill’s balance sheet identi
Page 15 and 16: (including spouses of deceased Pers
Page 17 and 18: class members at their last known a
Page 19 and 20: 50. Plaintiffs’ claims raise a ho
Page 21 and 22: Fees, Expenses, and Case Contributi
Page 23 and 24: 9 documents cannot relieve fiduciar
Page 25 and 26: f. Defendants argue that neither Me
Page 27 and 28: turmoil experienced in the financia
Page 29 and 30: 77. With respect to breaches in 200
Page 31 and 32: H. The Reasonableness of the Settle
Page 33 and 34: 92. Defendants had no role in formu
Page 35 and 36: own firms and to the others involve
Page 37 and 38: Firm Hours Lodestar Harwood Feffer
Page 39 and 40: expenses of $372,312.94. In additio
Page 41 and 42: 116. Despite the complexity and unc
Page 43 and 44: 125. Keller Rohrback’s work as le
Page 45 and 46: litigation are also debtors in bank
Page 47 and 48: evaluating the fairness of both sec
Page 49 and 50: Sterling, LLP, and Simpson Thacher
Page 51 and 52: See, e.g., ERISA § 502(a), 29 U.S.
Page 53: X. NAMED PLAINTIFFS SHOULD BE GRANT

Joint Declaration of Lynn L. Sarko and Marc I ... - Cohen Milstein

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