Declaration Of Helen J. Hodges In Support Of Lead Counsel's ...

egarding the §11 claims, which were the only claims remaining against BofA and Lehman. We
drafted a demand letter and the mediation statement with input from Chris Patti, University Counsel
for The Regents. With Judge Weinstein’s assistance we negotiated an agreement with BofA quickly,
and the $69 million settlement began earning interest for the benefit of the Class in late May. The
agreement to settle with Lehman required more lengthy discussions and meetings over several
months. After months of hard-fought negotiations and further review of the remaining claims, we
reached an agreement to settle with Lehman for $222.5 million, which began to earn interest on
October 27, 2004. We worked with counsel for the banks to memorialize the agreements in
stipulations of settlement. Both of these settlements are excellent results for the Class. At the time
these settlements were negotiated, the only claims remaining were §11 claims, which, against
underwriters, are limited to the amount of the securities they sold. Lehman and BofA sold notes and
holders of the notes were entitled to receive a recovery in Enron’s bankruptcy. Consequently,
Lehman and BofA argued that their exposure was reduced due to the bankruptcy recovery, at that
time estimated to be about 17%. In addition, private plaintiffs had sued these same banks and the
banks argued those private plaintiffs’ claims should reduce their exposure to the Class. We believed
that the settlements with Lehman and BofA were in excess of 50% of their exposure to the Class.
The Class also benefited from the early settlement of these claims (before depositions) so that we
could focus our resources on pursuing the banks who had §10(b) liability.
243. Kathy Patrick, counsel for the Outside Directors, contacted Professor Eric Green in
October 2004 to set up a mediation. We gathered and reviewed the directors and officers’ (“D&O”)
insurance policies at issue and we promptly convened with Professor Green in Boston. At the same
time we had reached an agreement with Lehman with Judge Weinstein’s diligent efforts and we
drafted the memorandum of understanding regarding Lehman. Settlement discussions with the
Outside Directors were complicated because in order to secure the insurance proceeds for the benefit
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