March 6, 2015
Bernstein Liebhard LLP and Partner U. Seth Ottensoser were recognized in the March 2015 issue of The American Lawyer for the firm’s role as court-appointed co-lead counsel in In re Freeport-McMoRan Copper & Gold, Inc. Derivative Litigation. A “landmark settlement” in this shareholder derivative class action, which includes a recovery of $137.5 million, was announced on January 15, 2015. The majority of the recovery will be distributed to shareholders of Freeport-McMoRan Copper & Gold Inc. (“Freeport”) in the form of a special dividend. A hearing on the settlement is set for March 6, 2015.
The article highlights the fact that the Freeport settlement is “the third-largest settlement ever in a shareholder derivative class action, and unlike other derivative settlements, the proceeds will go directly to investors.” Additionally, the article notes that this is “the first-ever settlement in which shareholders will receive direct payments to resolve derivative claims”.
The settlement resolves claims that executives and directors had conflicts of interest that caused Freeport to overpay significantly for two oil and gas companies, McMoRan Exploration Co. (“MMR”) and Plains & Production Company (“PXP”), in 2013. Specifically, the Second Amended Complaint alleges that the Chairman and former CEO of Freeport, who is also the co-founder, Co-Chairman, President, CEO, and largest individual shareholder of MMR, orchestrated the acquisition of MMR and PXP in order to bail-out his personal investment in the financially endangered, cash-poor MMR, and gave substantial personal benefits to insiders, including a majority of the Freeport Board and PXP’s CEO, at the expense of Freeport and its stockholders.
The full text of the article is available at http://www.americanlawyer-digital.com/americanlawyer-ipauth/201503ip?pg=28%20-%20pg28#pg28