Attorney fees limited in securities suit
Judge sets amount at 12%; ruling benefits Colorado PERA
By David Milstead
Rocky Mountain News
Wednesday, November 15, 2006
Colorado PERA will get more and its attorneys less as a judge
moved to limit fees in one of the largest securities lawsuits
ever. Dutch grocer Royal Ahold settled the lawsuit a year ago
for $1.1 billion. The Colorado Public Employees' Retirement
Association was lead plantiff.
Attorneys will receive $130.6 million in fees, 20 percent less
than requested, U.S. Judge Catherine Blake ruled Tuesday.
She said while federal law was unclear on what attorney fees are
appropriate, 12 percent of the $1.1 billion case settlement was
"reasonable." She also allotted $3.3 million in expenses.
"The settlement obtained is among the largest cash settlements
ever in a securities class-action case and represents an
estimated 40 percent recovery of possible provable damages,"
Blake said in her order. "Strictly on a percentage comparison
approach, a 12 percent fee award appears to me a reasonable
The amount PERA will receive has not been determined. The
pension fund said in January 2004 it had losses of $16.2
million, based on its purchases of Ahold stock over the years
and the damage done when the company revealed it had accounting
Ahold said in 2003 that it overstated profit by $1.23 billion
and inflated sales for three years. Blake approved the
settlement of the shareholder suit in June.
The accounting scandal triggered a 63 percent drop in the
Amsterdam-based company's share price in a single day and the
resignation of the CEO.
PERA had $36 billion in assets as of Aug. 31. It served 389,948
members, including active workers, retirees and other inactive
members who have some service time in the system.
Wire services contributed to
this report. David Milstead is finance editor of the Rocky
Mountain News. He can be reached at
milstead@RockyMountainNews.com or 303-954-2648.