Attention, Class Members
Please read this statement from Robbins Geller Rudman & Dowd, Lead Counsel for the class:
On May 21, 2015, the Court of Appeals for the Seventh Circuit issued its opinion on defendants' appeal from the verdict and the October 2013 judgment in favor of 10,902 class members. The Court of Appeals reversed the verdict and remanded the case to the district court for a new trial on certain issues. Although the Court's opinion rejected the vast majority of defendants' arguments on appeal, we will have to re-try certain aspects of the case. We began litigating this case in 2002. It has been a long and challenging road. Given the very discrete issues on remand, we believe that we are nearing the end of this case. The issues that need to be re-tried are limited. Assuming there are no additional proceedings in the Court of Appeals, we will return to the district court and present those issues again to the jury. We believe that we will prevail and that class members will finally get the justice they deserve.
Click here to view the opinion.
Class Action Complaint
Class Notices and Proof of Claim Form
Final Judgment with Ex. A (List of Claimants)
Pleadings, Orders and other documents filed in this Litigation
Appellate Briefs Filed in Connection with Defendants' Appeal to the Court of Appeals for the Seventh Circuit from the October 17, 2013 Judgment; Oral argument scheduled for May 29, 2014
Contact Class Counsel
HOUSEHOLD INTERNATIONAL SECURITIES CLASS ACTION VERDICT FUND
On May 7, 2009, a jury verdict in the case of Lawrence E. Jaffe
Pension Plan v. Household International, Inc. et al., Lead Case
No. 02-C-5893 (the “Litigation”), pending in the United
States District Court for the Northern District of Illinois, Eastern
Division, was returned in favor of the plaintiff Class and against
defendants Household International, Inc., William Aldinger, David
Schoenholz and Gary Gilmer. As a result of the jury verdict,
Class Members who purchased or otherwise acquired Household
International common stock during the period beginning March 23,
2001 through October 11, 2002 (the “Damages Period”)
may be entitled to a recovery, subject to approval in a claims
proceeding and the outcome of any appeals. Pursuant to the Jury
Verdict, there will be no recovery for any purchases of Household
International common stock made before March 23, 2001.
The Jury Verdict may result in payment to Class Members who (i) purchased
Household International common stock during the Damages Period; (ii)
filed a timely and valid Proof of Claim form; and (iii) suffered a
Recognized Loss, which is calculated based on the inflation per share
on each trading day set forth in the Jury Verdict and the
Court-approved formula for calculating damages. Class Members whose
claims are approved may be entitled to receive 100% of their
Recognized Loss less their proportionate share of any attorneys’
fees and expenses which may be awarded by the Court.
THE DEADLINE TO FILE A PROOF OF CLAIM IN THIS MATTER WAS MAY 24, 2011.
ANY AND ALL CLAIMS RECEIVED AFTER MAY 24, 2011 ARE LATE AND MAY BE
BARRED FROM PARTICIPATION IN ANY DISTRIBUTION
This website is intended to provide certain background information
regarding the Jury Verdict and subsequent proceedings.
SUMMARY OF THE LITIGATION
On August 19, 2002, Lawrence E. Jaffe Pension Plan initiated an action
in the United States District Court for the Northern District of
Illinois, Eastern Division, by complaint styled as Lawrence E.
Jaffe Pension Plan v. Household International, Inc. et al., Lead
Case No. 02-C-5893, alleging various violations of the federal
securities laws against Household International, Inc. and certain of
its executive officers. Thereafter, a number of similar class action
complaints were filed.
On December 9, 2002, the Court consolidated the cases. On December 18,
2002, the Court appointed Glickenhaus & Co., PACE Industry
Union-Management Pension Fund, and International Union of Operating
Engineers Local No. 132 Pension Plan as Lead Plaintiffs and approved
its selection of Robbins Geller Rudman & Dowd LLP as Lead
On March 13, 2003, Lead Plaintiffs filed a Corrected Amended
Complaint (“Amended Complaint”) for violations of the
federal securities laws, which included claims for violations of
§§10(b) and 20(a) of the Securities Exchange Act of 1934
and Rule 10b-5 promulgated thereunder, and §§11, 12(a)(2)
and 15 of the Securities Act of 1933. The named defendants in the
Amended Complaint were Household International, Inc.; Officer
Defendants William Aldinger, David Schoenholz and Gary Gilmer;
Director Defendants Robert Darnall, Gary Dillon, John Edwardson, Mary
Evans, J. Dudley Fishburn, Cyrus Friedheim, Louis Levy, George Lorch,
John Nichols, James Pitblado, S. Jay Stewart, Louis Sullivan; HFC
Director Defendant J.A. Vozar; Auditor Defendant Arthur Andersen; and
Investment Bank Defendants Merrill Lynch and Goldman Sachs. Lead
Plaintiffs alleged that defendants made materially false
representations and omissions in public filings, press releases,
analyst reports and other public statements concerning Household, its
operations, and financial condition during the period October 23,
1997 through October 11, 2002 (the “Class Period”).
On March 19, 2004, the Court granted in part and denied in part
defendants’ motion to dismiss, dismissing claims against the
Director Defendants, Goldman Sachs and Merrill Lynch, and upholding
claims against Household International, Inc. William Aldinger, David
Schoenholz, Gary Gilmer, J.A. Vozar, and Arthur Andersen. Thereafter,
Defendants filed answers denying all material allegations in the
Amended Complaint and asserting various defenses thereto.
On December 3, 2004, the Court certified a Class in this case, defined
as: all Persons who purchased or otherwise acquired the securities of
Household during the period between October 23, 1997 and October 11,
2002. Excluded from the Class are defendants herein, members of
defendants’ immediate families, any person, firm, trust,
corporation, officer, director or other individual or entity in which
any defendant has a controlling interest or which is related to or
affiliated with any defendant, and the legal representatives, agents,
affiliates, heirs, successors-in-interest or assigns of any such
On June 16, 2005, the Class and Arthur Andersen reached a settlement for
$1.5 million (the “Andersen Settlement”). On January 31,
2006, a notice was sent to Class Members informing them of the
Andersen Settlement, of the certification of the Class, and notifying
Class Members of the right to be excluded from the Litigation. On
April 6, 2006, the Court approved the settlement.
On February 28, 2006, the Court issued an order that all claims based on
purchases of Household stock from October 23, 1997 through July 29,
1999 were barred by the applicable statute of limitations provisions
of the federal securities laws. On June 30, 2008, the Court ruled
that trial in this case would commence on March 30, 2009.
Copies of certain pleadings, orders and other documents filed in this case
may be accessed on this website by clicking on Pleadings, Orders
and other documents filed in this litigation. A complete copy of
the case file may also be inspected at the Office of the Clerk of the
United States District Court, Northern District of Illinois, Eastern
Division, Everett McKinley Dirksen United States Courthouse, 219
South Dearborn Street, Chicago, IL 60604, during business hours of
each business day, under Case No. 02-C-5893.
THE JURY VERDICT
A six (6) week trial commenced on March 30, 2009 against Household
International, Inc., William Aldinger, David Schoenholz and Gary
Gilmer (the “Trial Defendants”) on behalf of all
purchasers of Household stock from July 30, 1999 through October 11,
2002. On May 7, 2009, the jury returned a verdict in the case (the
“Jury Verdict”), finding that: (i) all the Trial
Defendants violated §10(b) of the Securities Exchange Act of
1934 and SEC Rule 10b-5; and (ii) all the Trial Defendants except
Gilmer violated §20(a) of the Securities Exchange Act of 1934 in
connection with public statements made about Household during the
period March 23, 2001 to October 11, 2002. The jury found that the
Trial Defendants did not violate the federal securities laws related
to any purchases made prior to March 23, 2001. The jury also awarded
per share damages for each trading day during the Damages Period.
All of the Court’s rulings and the Jury Verdict are subject to
appeal. An appellate court may uphold, modify or reverse the verdict.
SUBMISSION OF CLAIMS FOR DAMAGES BY CLASS MEMBERS AND POST-TRIAL
Class Members were required to submit their completed Proof of Claim forms
on or before May 24, 2011. Class Members who (i) purchased Household
International common stock during the Damages Period; (ii) file a
timely and valid Proof of Claim form; and (iii) evidence a Recognized
Loss, which is calculated based on the inflation per share on each
trading day set forth in the Jury Verdict and the Court-approved
formula for calculating damages, may be entitled to damages.
If you failed to file a claim, you will not share in the proceeds of any
judgment rendered as a result of the Jury Verdict or the Andersen
Settlement which was previously approved by the Court.
As of December 22, 2011, the Court-appointed claims administrator,
Gilardi & Co. LLC (“Gilardi”), had received 80,112
claims submitted by potential Class Members. Gilardi completed its
review of submitted claims on December 22, 2011. Relying on the
Court’s prescribed method of calculating allowed losses,
Gilardi determined that there are 45,921 claims that generate an
allowed loss. The aggregate loss amount for the 45,921 claims,
according to Gilardi’s computation, is $2,225,884,588.31.
Gilardi submitted a report to the Court on December 22, 2011
identifying the claims that Gilardi recommends for rejection, as well
as the claims that Gilardi believes generate an allowed loss.
As to the 45,921 claims that Gilardi believes generate an allowed loss,
the Court ordered Defendants to file any objections to the claims in
terms of (a) calculation of the amount; (b) submission of the claim
without proper authority of the actual Class Member; or (c)
incompleteness, duplication of another claim or some mechanical
deficiency in the claim submission itself on or before February 27,
2012. On March 28, 2012, Plaintiffs responded on behalf of the Class
Members to Defendants’ objections. The parties and the Court
have resolved these ministerial objections as to some claims, while
the objections to other claims will need to be resolved by a
Court-appointed Special Master.
The Special Master issued a Report and Recommendation on July 11, 2013
setting forth his initial findings and categorizing the claims as
follows: List 1 identified 10,902 claims valued at almost $1.5
billion (before prejudgment interest) that were entitled to judgment;
List 2 identified 133 claims valued at approximately $58 million that
must be resolved at trial; List 3 identified approximately 2,500
claims valued at about $60 million that should be rejected due to the
claimant’s failure to answer the claim form question.
Approximately 30,000 other claims, which were not set forth in Lists
1-3, remained subject to outstanding objections at that time.
Ultimately, the Special Master will have to resolve objections to
On October 4, 2013, the Court entered an Order denying Defendants’
post-trial motions for judgment as a matter of law and for a new
trial. The Court also ordered that Defendants pay Class Members
prejudgment interest beginning on October 11, 2002, until the entry
of Judgment. On October 17, 2013, the Court entered judgment in
favor of 10,902 Class Members with claims valued at
$1,476,490,844.21. (Any ministerial objections to those 10,902
claims had already been resolved in favor of the Class Member.) The
Court also awarded prejudgment interest of $986,408,772 in favor of
these Class Members. The total amount of this Judgment is
$2,462,899,616.21. The Judgment, dated October 17, 2013, identifies
the 10,902 Class Members by claimant name and claim number. If you
wish to confirm that your claim has been allowed, you may access the
Judgment at the Office of the Clerk of Court or on the internet at
As set forth above, the parties are continuing to litigate and, at
times, resolve Defendants’ objections to approximately 30,000
additional claims in ongoing proceedings before the Special Master.
Defendants have appealed from the Verdict and October 17, 2013
Judgment in favor of 10,902 Class Members. The appeal was fully
briefed as of April 11, 2014. The Court of Appeals for the Seventh
Circuit will hear argument on the appeal on May 29, 2014.
RUDMAN & DOWD LLP
Michael J. Dowd
655 West Broadway, Suite 1900
San Diego, CA 92101-3301
Lead Counsel for Plaintiffs
For your convenience, copies of all Pleadings, Orders and other documents filed in this Litigation are accessible by clicking on Pleadings, Orders and other documents filed in this Litigation.