SECURITIES LAWSUIT SETTLEMENT FALLS 50%
New York March 19, 2009 13.00 pm: Based on a research conducted by Cornerstone, the average securities class action lawsuit settlement fell by about 50 % to reach $ 31.2 million in the year 2008.
Named as Securities Class Action Settlements: 2008 Review and Analysis, the report attributes the sharp drop to multi-billion dollar settlements. The average amount of cases settled in fiscal year 2008 reached $ 8 million, a drop of $ 1 million from the previous year. This was an all-time high for those cases which were settled from 1996 all through 2007, based on Cornerstone report.
Meanwhile, the sum of all settlements in the year 2008 dropped drastically from 110 to 99 in the previous year. According to Cornerstone analysts, the decline is less likely to transform into a trend in the coming years.
According to Joseph Grundfest, Stanford Law School Securities Class Action Clearinghouse and co-author of the report, “The settlement figures could bounce back in the coming few years as the cases usually associated with huge damages to the present financial collapse start working their way to the current judicial system”.
Based on the findings of the report, no mega settlements or settlement larger than $ 1 billion was made in the year 2008, which is in stark contrast to those in the former years. According to Cornerstone, during the past ten years, nine settlements amounting to more than $ 1 billion were made. However, it included lawsuits against Tyco International Ltd., Enron Corp and WorldCom.
According to Cornerstone, the mean length of class period in the year 2008 had touched yet another high of 800 days and above.
The average length of the class period in 2008 reached a new high of more than 800 days, nearly a year longer than the average for all settlements through 2007. The average class period before 2008 was 518 days.
Safeguarding Your Money
When you’ve decided to sell your structured settlement for a lump sum of cash it’s important to have a plan in place for what you’ll do with the money you receive from the sale.
Without a plan in place it’s to easy to spend the money on things you hadn’t intended to spend it on. Let’s face it; it can be very tempting to start making purchases with that money if it’s not earmarked for something before you get it. It’s important to know what you’re going to do with the money before the structured settlement sale is final. Figure out what you want to do with it, and be sure that’s what you do when the payment comes through.
Why The Need For Court Approval?
Unfortunately the world of commerce is thick with not-so-honest people. They have one thing in mind when they do business; themselves. The structured settlement industry is not exempt from such persons, and that’s why court approval is required in order to sell your structured settlement to a third party. At least in most states it’s required.
A court is able to, without bias, review the terms of the sale thus making sure the seller’s rights, and best interests, are protected. If you think about it, it’s really a wise route to take when selling a structured settlement. A court of law will quickly pick up on something that isn’t right and set if straight for you.
Why Sell Your Structured Settlement?
Most structured settlements are the result of personal injury or neglect suffered on the part of the recipient. A structured settlement is intended to help the recipient meet their current and future financial needs. So why sell it?
The reality is that by the time the process is finished, and the ink has dried, the recipients has incurred debt that their settlement payments won’t really help to diminish. For many structured settlement recipients, selling their settlement for a large lump sum of cash is a way for them to make a dent in their financial debt, and give them a fresh start on the future.
Why Not A Lump Sum Option At The Time The Settlement Is Awarded?
This is a good question, and one that needs to be answered in order to clear up any confusion. A lump sum option isn’t available at the time the settlement is set in place because the insurance companies that is paying the lump sum would go bankrupt within a relatively short period of time.
Many of the insurance awards are for thousands and thousands of dollars, some even into the millions. Imagine if one insurance company had to settle up with one-hundred or so claims within any one calendar year. They wouldn’t be able to keep up. A structured settlement company, however, allows the insurance company to stay in business, and the recipient of the settlement still gets their money, just over an extended period of time. It’s a win/win situation for everyone involved.