On September 11, 2012, the Honorable Lynn Duryee of the Superior Court of the State of California granted preliminary approval to the proposed sale of a Class asset, as memorialized in the Agreement for the Sale and Assignment of Claim Against Reliance Insurance Company, in Liquidation, dated July 16, 2012, as amended, (the “Agreement”) in the certified class action In re Phoenix Leasing Limited Partnership Litigation, No. 173739.
Labaton Sucharow LLP and Chimicles & Tikellis LLP are the court-appointed Class Counsel for Plaintiffs and the Class.
Plaintiffs, on behalf of the Class, alleged that, among other things, Phoenix Leasing Incorporated, Phoenix Leasing Associates II L.P., Phoenix Leasing Associates II, Inc., Phoenix Securities, Inc. and Phoenix American Incorporated (“Defendants”) operated Phoenix Leasing Cash Distribution Funds I through V (the “Partnerships”) for their own financial advantage; that Defendants, because of their extensive experience in computer equipment leasing, knew that the residual values of the equipment purchased for the Partnerships would drop rapidly, and that as a result, the limited partners would not profit from their investments in the Partnerships.
The Court certified the action as a class action in Orders entered on June 28, September 1 and October 30, 2000. A Notice of Pendency of Class Action was sent to Class members on January 8, 2001 regarding the certification of the Class and Class members’ rights to exclude themselves from the Class. The time to exclude yourself has passed.
The litigation was resolved by a negotiated Settlement Agreement dated October 11, 2001. A Notice to Class of Proposed Settlement was sent to Class Members on or about November 19, 2001. The Settlement was finally approved on February 19, 2002 following a Settlement Fairness Hearing that same day. In addition to a payment of more than $11.5 million into the Settlement Fund, the Settlement created a potential source of future additional funding for the Class in the form of an assignment of the Class’s claim against the Reliance Insurance Company, in Liquidation (“Reliance”) (the “Reliance Claim”), one of Defendants’ insurers that had become insolvent during the pendency of the litigation. After a thorough and diligent investigation and extensive arm’s length negotiations, Plaintiffs, through Class Counsel, are selling the remainder of the Reliance Claim to Contrarian Funds, LLC (“Contrarian”) for a certain and immediate payment.
If you purchased limited partnership interests in the Phoenix Leasing Cash Distribution Funds I through V, were accepted as an eligible claimant, and were mailed a distribution check in 2003 from the first distribution of the proceeds from the Settlement, you may be entitled to a future distribution from the sale proceeds. Class Members do not need to submit a new claim form to receive a future distribution from the sale.
A settlement hearing will be held on November 13, 2012, at 9:00 a.m. before Judge Duryee in Dept. No. L of the Superior Court of the State of California at 3501 Civic Center Drive, San Rafael, CA 94913. The deadline for objecting to the Claim Sale is October 23, 2012.
A copy of the Preliminary Approval Order can be accessed here, the original 2001 Stipulation of Settlement here, and the original 2001 Notices here. Please call the Claims Administrator at 1-877-872-3814 if you have questions about your eligibility or 2003 distribution check.