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Southwest Exchange Receiver Page |
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Case Number - 07-A-535439-B - Sunset-Pecos Ltd Partnership vs. Southwest Exchange Inc. |
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Larry L. Bertsch, Receiver |
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Information Regarding UBS Settlement A. The Litigations This page relates to litigations and Settlement with UBS. The litigations involve exchangers as plaintiffs and Southwest Exchange, Inc., Qualified Exchange Service, other receivership entities (collectively, the “Receivership Entities”), and others, including UBS Financial Services, Inc. (“UBS”), as defendants. B. The Settlement with UBS The exchangers and the Receivership Entities reached a settlement agreement with UBS. Pursuant to the settlement, UBS agreed to pay $23,000,000 in exchange for releases of claims and other similar relief. On March 24, 2008, Judge Elizabeth Gonzalez of the Eighth Judicial District Court, Clark County, Nevada, Judge R. Clive Jones of the United States District Court for the District of Nevada, and Judge Bruce Markell of the United States Bankruptcy Court for the District of Nevada jointly heard motions to approve the settlement. Judge Gonzalez and Judge Markell approved, and Judge Jones preliminarily approved the settlement. Judge Jones’ preliminary approval was required by applicable federal law related to class actions. On August 11, 2008, Judge R. Clive Jones gave final approval of the settlement with UBS. C. Payment of the Settlement Amount by UBS The final approval by Judge Jones triggered the obligation of UBS to pay the $23,000,000. The settlement provides that UBS is to make such payment within thirty (30) days of entry of a final order of approval. The parties project that the 30 day period expires no later than September 15, 2008. D. The Qualified Settlement Fund. The Receiver filed motions in both the state and federal courts for permission to establish a “qualified settlement fund” (“QSF”), an IRS approved vehicle used for payments to large classes of plaintiffs. You may obtain more information regarding a QSF by clicking on the following link: Sec. 1.468B-1 Qualified settlement funds. The Receiver makes no representations or statements regarding the tax consequences to you of a distribution from the QSF. You are to consult your tax advisor, accountant or attorney for such information. Judge Gonzalez permitted the Receiver to establish a QSF, and appointed the Receiver the administrator of the fund. The motions filed in federal court have not been ruled upon. E. Distributions from the QSF Once UBS pays the settlement amount, the Receiver-Administrator will consider distributions from the fund. He will make payments of receivership administrative and legal costs, and court-approved attorney’s fees. He expects to distribute the remainder to exchangers at an appropriate time. The timing of distributions to exchangers will be based on negotiations with class & state court counsel. The individual exchanger amount of distribution of the settlement funds from UBS to the Receivership Entities will depend on, among other things, the exchanger’s decision to Opt-In or Opt-Out of the Class Action litigation. It is possible that the Receiver will make a partial pro rata distribution by the end of the calendar year. If you are unsure whether you are part of the Opt-In UBS class, please contact your attorney for further information. |