Lawyers are expected to emerge as the biggest winners in a long-running US class action suit against Ryanair (FR, Dublin International), collecting more than USD1.4 million from the USD5 million proposed settlement by the airline accused of defrauding shareholders over its willingness to recognise labour unions.
This is according to a memorandum of law filed with the New York District Court in support of two Alabama-based pension funds' motion for final approval of the USD5 million class action settlement, acceptance of the plan of allocation, and the lead counsel's application for an award of attorney's fees and expenses, and an award to the lead plaintiffs.
According to this, US law firm Robbins Geller Rudman & Dowd LLP seeks attorneys' fees of 18% of the settlement or USD900,000, and USD526,073.86 in expenses, plus interest on both amounts, totalling USD1,426,073.86. "This request has the full support of the plaintiffs, institutional investors with meaningful losses, and is within the range of, if not below, fees often awarded in comparable securities class action settlements in this district and across the country," argue the lead plaintiffs, the City of Birmingham Firemen's and Policemen's Supplemental Pension System and City of Birmingham Retirement and Relief System.
In contrast, the two pension funds seek an award of USD3,696 for their efforts to represent the class and supervise the management and prosecution of the litigation for more than four years.
The allocation plan provides formulas for calculating the recognised claim of each class suit member based on when they purchased and sold their Ryanair shares. Each authorised claimant, including the lead plaintiffs, will receive a pro-rata distribution under the plan. The settlement notice was sent to more than 80,000 potential class members.
The settlement will be distributed to authorised claimants whose distribution amount is USD10 or more. Any balance remaining after distributing and paying outstanding administration expenses, taxes, and attorneys' fees will be equally reallocated among the claimants. Anything remaining after that will be donated to the New York Bar Foundation or a non-profit organisation chosen by the court.
The New York District Court is to decide on the settlement and related claims on October 20. Any objections to the settlement must be filed by September 29. All claims under the class action suit must be submitted to the claims administrator by October 17, 2023.
According to the counsel for the pension funds, the USD5 million cash settlement by Ryanair represents 22% of damages, was "fair, reasonable and adequate", and should be finally approved.
The pension funds led the class action suit against Ryanair in 2018, claiming the airline and its long-standing CEO, Michael O'Leary, used tactics to inflate its stock price artificially. They claimed the company misled them by implying a lack of willingness to embrace labour unions, which could lead to increased costs and decreased profits.
O'Leary's statement during Ryanair's 2017 annual general meeting was famously cited during the case, where he said that "hell would freeze over" before the budget carrier would accept trade unions.
