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

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of the Class, we necessarily had to cut off the further payment of defense costs for other insureds. At the time our discussions with Kathy Patrick began, the insurance policies had been drained of $150 million out of the $350 million available. Since the Court had dismissed the Class’ §10(b) claims against the Outside Directors, the only Class claims remaining against them were the §11 claims on four Enron notes. 244. With Professor Green’s assistance, we reached an agreement with Kathy Patrick’s clients that called for the Outside Directors to personally pay 10% of their gains on the sale of Enron stock, plus their agreement to secure the remaining $200 million in insurance. That agreement was reached only after hard-fought negotiations overseen by Professor Green, and it was just the starting point for achieving an agreement that we could get approved. 245. First, Enron and its Creditors Committee stood in the way. Since the insurance policies were arguably assets of the bankrupt entity, the Enron estate would object to payment of the proceeds to the Class unless the estate received a cut. In order to obtain the remaining $200 million for investors and to implement the agreement with the Outside Directors, the carriers would have to ask Judge Gonzalez to lift the stay as to the balance of the excess coverage. Since the insurance provided for entity coverage, Enron had an interest in obtaining some of the proceeds for the creditors. Thus, Enron and the Creditors Committee could object to the motion to lift the stay and thereby hold up payment of the insurance for the settlement. After more negotiations overseen by Professor Green, we and counsel for Enron and the Creditors Committee reached an agreement for the allocation of the insurance proceeds: 82.8% to the Class and 17.2% to Enron/Creditors Committee. 246. Second, the non-settling insureds were unhappy that their ability to defend themselves using the D&O insurance was coming to an abrupt halt. Since they were insureds and were not receiving a release from our case, they arguably had a right to object to the use of the insurance - 134 -
proceeds for our settlement. Thus, when counsel for some of the non-settling insureds approached Lead Counsel, more negotiations followed. We conceived the idea of a “set aside” of some amount of the remaining insurance for the non-settling insureds so as to obviate objections from Lay, Skilling and others as had occurred in the Tittle settlement. Counsel for Enron and the Creditors Committee and Coughlin Stoia then spent weeks hammering out the particulars of the concept, which, so far as we know, was unprecedented. Ultimately, the agreement among Lead Plaintiff, Enron/Creditors Committee and the non-settling insureds was memorialized in the Agreement Regarding Insurance Proceeds and Interpleader Action; it provided that the non-settling insureds would receive approximately $13 million out of the $200 million in remaining insurance. The agreement among Lead Plaintiff, Enron/Creditors Committee and the Outside Directors was memorialized in the Stipulation of Settlement. We negotiated and drafted those agreements in the fall of 2004 and in January 2005; the negotiations required several face-to-face meetings and countless telephone calls with counsel for the diverse group of insureds, including Lay, Skilling, Pai, and other former Enron officers. 247. While we were wrestling with Enron and the non-settling insureds on how to divide the insurance proceeds, the Outside Directors, again represented by Kathy Patrick, filed an action against certain of the insurance carriers and sought a temporary restraining order to preserve the proceeds for purposes of the settlement. The Court granted the request for the TRO. Shortly after the entry of the TRO, Harrison filed a case against the carriers in New York. We then engaged in discussions with counsel for Harrison to address the Class’ claims against him and his claim on the insurance. Ultimately, an agreement was reached with Harrison as well. He agreed to pay 10% of his stock sales gains to settle the §11 claim with the Class and we agreed to drop the §10(b) claim which the Court had upheld against him. - 135 -
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UNITED STATES DISTRICT COURT SOUTHE
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2. The Parties Establish a Document
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I, HELEN J. HODGES, declare as foll
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• Reviewed over 70 million pages
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6. The above recoveries were based
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gathered and which the banks and En
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14. In this endeavor, Coughlin Stoi
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17. Lead Counsel prosecuted the lit
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[T]his representation has been unde
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and the necessary involvement with
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case. The Court hereby awards attor
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published an article, “Enron Jolt
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statements. We compiled profiles on
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34. We had no way of knowing whethe
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which witnesses to pursue, but cont
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the market in October 2001. The ana
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said it was unable to determine whe
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depositions because discovery was p
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65. After the motion was filed, The
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institutional plaintiffs, their rep
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drawing on the expertise of our in-
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83. On May 3, 2002, the Preferred P
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finance certain of the partnerships
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and participated in a scheme to def
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(j) Arthur Andersen LLP (Docket No.
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Lead Plaintiff had adequately alleg
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(a) The Court ruled that Lead Plain
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director of New Power, and issuance
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94. On September 26, 2002, Lead Pla
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mandamus review, and that the Court
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106. On May 6, 2003, defendant Citi
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scheme, and certain specific allega
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pled with the requisite particulari
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Merrill Lynch and Deutsche Bank Ent
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4. Motions to Intervene Additional
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Gramm, Jaedicke, LeMaistre, Meyer,
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professionals and experts, and atte
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121. On May 7, 2003, the Outside Di
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of Enron’s prominence and magnitu
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131. As part of discovery, Lead Cou
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Third Parties and Defendants Date S
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Third Parties and Defendants Date S
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133. Document requests and subpoena
Page 87 and 88: 139. In responding to the document
Page 89 and 90: 146. In addition to JPMorgan’s in
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Page 93 and 94: Protocol Order provided for the ord
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Page 97 and 98: Deponent Entity Date[s] Location No
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Page 115 and 116: 195. On April 13, 2004, defendants
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Page 119 and 120: • Outside Directors’ Memorandum
Page 121 and 122: 208. A two-day hearing was held reg
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Page 131 and 132: primarily involving Deutsche Bank,
Page 133 and 134: We filed a notice of request for se
Page 135 and 136: 236. Bankruptcy Examiner Batson him
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Page 143 and 144: team; for example, we reviewed info
Page 145 and 146: Court ruled that Lead Plaintiff fai
Page 147 and 148: Opposition to Deutsche Bank’s Mot
Page 149 and 150: Sec. Litig., 443 F.3d 987 (8th Cir.
Page 151 and 152: Plaintiff’s Opposition to Motion
Page 153 and 154: dated June 5, 2006 as It Pertains t
Page 155 and 156: the Pleadings (Docket No. 5019). On
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Page 161 and 162: y the court and cited in In re Cend
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Page 166 and 167: ADDITIONAL SERVICE LIST Stuart Yoes
Page 168 and 169: ENRON COUGHLIN STOIA GELLER RUDMAN
Page 170 and 171: Name Title Hours Rate Lodestar Meye
Page 172 and 173: ENRON - SUMMARY OF PLAINTIFFS' FIRM
Page 178: EXHIBIT 4
Page 182 and 183: TOP SECURITIES SETTLEMENTS Case Nam
Page 184 and 185: Exhibit Listings and Notes regardin
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