Barclays Bank PLC, UBS AG and HSBC Bank PLC have agreed to pay into a $36.1 million fund to settle a putative class of bondholders’ claims that the banks conspired to manipulate the London Interbank Offered Rate (LIBOR). The proposed settlements were filed in a New York federal court on June 7. Bondholders Ellen Gelboim and Linda Zacher asked U.S. District Judge Naomi Reice Buchwald to grant preliminary approval of the settlements, which were negotiated separately with each of the banks.
To create the settlement fund, Barclays has agreed to contribute $7.1 million, UBS has agreed to contribute $17.9 million and HSBC has agreed to contribute $11.1 million. The bondholders said negotiations began on the proposed settlements in January 2016, months before Judge Buchwald’s December ruling that dismissed the bondholders’ case.
Judge Buchwald found in that ruling that the court lacked personal jurisdiction over the foreign banks named in the suit and that the bondholders were not “efficient enforcers” of antitrust laws. But as part of their settlement bid, the bondholders have asked the judge to modify her dismissal so that it does not apply to Barclays, UBS and HSBC pending her consideration of the proposed settlement. According to the bondholders, the three banks have not opposed this request.
For the purposes of the settlement, the bondholders are also seeking certification of their putative class, which would cover the owners of more than 5,200 Libor-based debt securities with an outstanding face value of more than $500 billion. The bondholders additionally requested that the court appoint their counsel, Morris and Morris LLC and Weinstein Kitchenoff & Asher LLC, as lead counsel. Judge Buchwald previously granted preliminary approval to a $120 million settlement between Barclays and a group of so-called over-the-counter Plaintiff investors who bought Libor-based products directly from the British banking giant.
The bondholders are represented by Karen L. Morris, Patrick F. Morris and R. Michael Lindsey of Morris and Morris LLC, and David H. Weinstein and Robert S. Kitchenoff of Weinstein Kitchenoff & Asher LLC.