'European Model': Huge Settlement, But No Suit

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A settlement of more than $350 million with aggrieved shareholders announced this week by Royal Dutch Shell PLC provides a “European model” for a kinder, gentler approach to such situations than traditional U.S. securities litigation, according to lawyers for both sides.

The parties – all European investors who bought their shares outside the U.S. – agreed to a settlement without a foreign lawsuit ever being filed, explains the ABA Journal eReport. However, the parties have petitioned a Dutch court to approve the settlement contract, as provided for under a 2005 law that has never before been applied to a securities dispute. (The relevant statutory provisions are: Wet Collectieve Afwikkeling Massaschade, Articles 907 and 910, and Articles 1013 and 1018 of the Civil Code of the Netherlands.)

“As far as we know, it’s the first class-wide settlement between European investors and a European company over European securities claims—and on its face, it’s one of the absolute largest recoveries ever in Europe,” says Allan Ripp. He is a spokesman for Grant & Eisenhofer, a Wilmington, Del., law firm representing the foreign investors.

“There’s a whole different model now,” says Shell lawyer Ralph C. Ferrara of LeBoeuf, Lamb, Greene & MacRae’s Washington, D.C., office “The European model is, if you’ve got claims, sit down and talk.”

For details, see the ABA Journal eReport story, and an earlier blog post.

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