DIVIDEX

Steps For Filling Fiduciary Gaps & Recovering Litigation Settlement Payments

DIVIDEX vs. the Status Quo

Required Steps DIVIDEX Automated DIVIDEX Consultative
Real time self-monitoring of global portfolios for potential securities fraud losses

designed in part to address the Morrison problem

Status Quo: Typically none

Analyze:

Use patent-pending analytics to seek to identify possible securities fraud

Action:

Identified cases tracked internally and available externally through the DIVIDEX portal

Analyze:

Use patent pending analytics to seek to identify possible securities fraud – reported on bespoke criteria

Consultation:

Whether to investigate litigation options for recovery

Independent evaluation of merits of potential claims by outside counsel

designed in part to address the Morrison problem

Status Quo: Typically none

Analyze:

Evaluation of all identified cases, domestic and foreign, free of the potential conflicts of interest that class counsel or litigation funders may have

Action:

Decide what recovery opportunities to join that meet client risk tolerances

Analyze:

Evaluation of all identified cases, domestic and foreign, free of the potential conflicts panel counsel may have

Consultation:

What cases to join to seek to recover losses

Identify counsel for cases to seek to recover losses

designed in part to address the Morrison problem

Status Quo: Receiving no guidance from outside fiduciary

Analyze:

Various options for U.S. and non-U.S. securities counsel

Action:

Retain counsel for suitable cases that meet client risk tolerances

Analyze:

Various options for U.S. and non-U.S. securities counsel

Consultation:

Selecting qualified counsel and negotiating favorable fee arrangements

Oversight & management of counsel for cases in which the plan sponsor is named plaintiff

designed in part to address the Morrison problem

Status Quo: Typically, there is limited oversight of outside counsel, which we believe results in little attention to cost impact on recoveries

No Action:

Service only available to DIVIDEX Consultative clients

Action:

Sophisticated independent litigation oversight and management

Consultation:

Steps to reduce costs to increase recoveries

Negotiation of litigation funding for non-U.S. cases

designed in part to address the Morrison problem

Status Quo: Typically falls to fund counsel

Action:

For cases that meet client risk tolerances, seek to obtain favorable funding terms based on aggregated losses across multiple clients with a focus on improved litigation funding options and terms for each case

Action:

Seek to obtain favorable funding terms based on aggregated losses across multiple clients

Consultation:

Improved litigation funding options and terms for each case

Calculate and track important deadlines such as statutes of limitations and statutes of repose

designed in part to address the ANZ Securities problem

Status Quo: Typically none

Action:

Calculate important deadlines and update as required, with tickler system, to assure timely opt-out analyses

Action:

Important deadlines are calculated and updated as required, with tickler system

Receive advice on opt-out, settlement proposals and fee applications

designed in part to address the ANZ Securities problem

Status Quo: Typically falls to fund counsel

Action:

Implement strategies to improve recoveries at critical points in securities fraud litigation, such as deadlines to opt-out of class actions

Action:

Analyze and determine viable options to seek to improve recoveries

Consultation:

Implementation of chosen actions, which may relate to addressing deadlines to opt-out of class actions or to object to settlement terms and/ or attorneys’ fees

Securities claims filings in class action settlements

Status Quo: At best, automated claims filing with no intention of seeking to improve outcomes, and little attention to non-U.S. cases

No Action:

No claims filing service for DIVIDEX Automated clients, except in connection with settled opt-out or foreign group cases

Action:

Implement proprietary claims filing methodology that was developed to seek to increase recoveries, and

electing the superior filing approach for each claim

Settlement payment receipt and reconciliation against recognized loss (damages per share as approved under settlement)

Status Quo: Typically, no reconciliation

No Action:

No claims payment reconciliation service, except in connection with payments against settled opt-out or foreign group cases

Action:

Negative deviation from expected recovery initiates investigation and, if necessary, advocacy with court- appointed claims processing agent

Receipt of payments to the fiduciary

Status Quo: Most typically involve payment to plan sponsor net of fees

No Action:

No cash management service

Action:

Payment in full of all recoveries to plan sponsor as directed

DIVIDEX fees for services

Payable either out of recoveries or the investment management budget

Status Quo: General counsel typically pays for legal services and costs of claims filing are typically embedded in custodial contract, plus sometimes contingency out of recovery

Fees:

$100,000 fee plus 2% of recovered amounts billed quarterly in arrears

Fees:

Minimum $250,000 fee billed quarterly in arrears and performance fee once   a hurdle rate is exceeded, or 10% of recovered amounts

Contact Us

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ONE UNIVERSITY AVE, SUITE 301C
WESTWOOD, MASSACHUSETTS 02090
INFO@DIVIDEXMANAGEMENT.COM   TEL: 781-636-5070