Now who would’ve thunk that we’d be reading an opinion issued in the Cendant case in 2006? I mean seriously, this thing settled in like 1972, didn’t it? Well, June 2000 actually, but even that’s an awfully long time ago. So what could possibly generate an opinion now you ask? Well, how about some sizeable shareholders who submitted claims in the settlement but were rejected by the administrator because it found their claims“did not merit compensation under the Plan because the profits they made by selling stock at artificially inflated prices cancelled out any losses they suffered on stock held after the irregularities were disclosed."
So you can read the Court’s lengthy analysis if you’re fascinated by plans of allocation, but if you’re not (perhaps because you are normal), you will be satisfied to know that the Third Circuit, led by Judge Thomas L. Ambro, affirmed the denial of payment to these shareholders because they “reaped a net gain rather than a net loss.” As Johnny might have put it, if you came out ahead, your claim is dead. Dead indeed.
You can read In re Cendant, issued July 18, 2006 right here.
Nugget: "The bottom line: SKAT's profit far outweighs its loss amount. Thus, it is not entitled to any payout."