Declaration of K. Rehns in Support of Plaintiffs' Motion for - Lehman ...

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Case 1:09-md-02017-LAK Document 666-1 Filed 01/13/12 Page 29 of 74 traceable to SASCO’s August 16, 2005 Registration Statement or May 10, 2006 Registration Statement, and the accompanying prospectuses and prospectus supplements in the following 17 offerings and who were damaged thereby: the LXS 2005-5N offering, LXS 2005-7N offering, LXS 2005-6 offering, LXS 2005-8 offering, LXS 2006-2N offering, LXS 2006-14N offering, LXS 2006-16N offering, LXS 2006-GP2 offering, GMFT 2006-AR4 offering, GMFT 2006-AR5 offering, SARM 2006-1 offering, SARM 2006-4 offering, SARM 2007-6 offering, SASCO 2007-BC1 offering, SASCO 2007-EQ1 offering, SASCO 2007-OSI offering and FFMLT 2006- FFB offering (collectively, the “Certificates”). RECEIPT OF THIS NOTICE DOES NOT NECESSARILY MEAN THAT YOU ARE A CLASS MEMBER OR THAT YOU ARE ELIGIBLE TO RECEIVE PROCEEDS FROM THE SETTLEMENT. IF YOU WISH TO PARTICIPATE IN THE SETTLEMENT, YOU MUST SUBMIT THE ENCLOSED CLAIM FORM POSTMARKED NO LATER THAN _______________, 2012. WHAT ARE THE SETTLING PARTIES’ REASONS FOR THE SETTLEMENT 27. Plaintiffs, Intervenors, Intervenors’ Counsel and Lead Counsel believe that the claims asserted against Defendants have merit. Plaintiffs, Intervenors, Intervenors’ Counsel and Lead Counsel recognize, however, the expense and length of continued proceedings necessary to pursue their claims against Defendants through trial and appeals, as well as the difficulties in establishing liability. In addition, certain insurance companies providing Directors and Officers insurance coverage under policies purchased by LBHI denied coverage for Plaintiffs’ and Intervenors’ claims against Defendants, and therefore it was uncertain whether there would be sufficient funds (from insurance or other sources) to pay a judgment if Plaintiffs and/or Intervenors prevailed on their claims. Plaintiffs, Intervenors, Intervenors’ Counsel and Lead Counsel have considered the uncertain outcome and trial and appellate risk in complex lawsuits 15
Case 1:09-md-02017-LAK Document 666-1 Filed 01/13/12 Page 30 of 74 like this one, as well as the limited resources of Defendants, uncertain availability of Directors and Officers insurance and the lack of a solvent corporate defendant. 28. In light of the amount of the Settlement and the immediacy of recovery to the Settlement Class, Plaintiffs, Intervenors, Intervenors’ Counsel and Lead Counsel believe that the proposed Settlement is fair, reasonable and adequate, and in the best interests of the Settlement Class. Plaintiffs, Intervenors, Intervenors’ Counsel and Lead Counsel believe that the Settlement provides a substantial benefit now, namely $40 million (less the various deductions described in this Notice), as compared to the risk that the claims would produce a similar, smaller, or no recovery after summary judgment, trial and appeals, possibly years in the future. 29. Defendants have denied and continue to deny each and all of the claims alleged by Plaintiffs or Intervenors in the MBS Class Action. Defendants expressly have denied and continue to deny all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the MBS Class Action. Defendants also have denied and continue to deny, among other things, the allegations that Plaintiffs, Intevenors or the Settlement Class have suffered any damage, or that Plaintiffs, Intevenors or the Settlement Class were harmed by the conduct alleged in the MBS Class Action. Defendants also have taken into account the uncertainty and risks inherent in any litigation, especially in a complex case such as this. Nonetheless, Defendants have concluded that further conduct of the MBS Class Action would be protracted and expensive, and that it is desirable that the MBS Class Action be fully and finally settled in the manner and upon the terms and conditions set forth in the Stipulation. The Settlement shall in no event be construed or deemed to be evidence of or an admission or concession on the part of Defendants with respect to any claim or of any fault or liability or wrongdoing or damage whatsoever, or any infirmity in the 16
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Declaration of K. Rehns in Support of Plaintiffs' Motion for - Lehman ...

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