Cases & Investigations

Dodona I, LLC v. Goldman, Sachs & Co.

CASE NUMBER: 10 Civ. 7497
CASE STATUS: Settled
SETTLEMENT AMOUNT: $27.5 million
COURT: United States District Court for the Southern District of New York

This matter is a securities class action brought against Goldman, Sachs & Co., The Goldman Sachs Group, Inc., Hudson Mezzanine Funding 2006-1, Ltd., Hudson Mezzanine Funding 2006-1, Corp., Hudson Mezzanine Funding 2006-2, Ltd., Hudson Mezzanine Funding 2006-2, Corp., Peter L. Ostrem and Darryl K. Herrick (collectively, the “Defendants”).

The action is captioned Dodona I, LLC v. Goldman, Sachs & Co., et al., No. 10 Civ. 07497(VM) (S.D.N.Y). A copy of plaintiff’s amended complaint is available here.  The Court appointed Dodona I, LLC as lead plaintiff (“Plaintiff”), and Berger Montague as lead counsel for the class.

The action was initially filed on September 30, 2010. It concerns two offerings of collateralized debt obligation (“CDO”) securities sponsored by Goldman Sachs known as the Hudson Mezzanine Funding 2006-1 and Hudson Mezzanine Funding 2006-2.

The amended complaint alleges that the defendants violated section 10(b) of the Securities Exchange Act of 1934 and New York law in structuring, offering and selling to the plaintiff and other investors the Hudson CDO securities. More specifically, plaintiff alleges that, in a classic case of “heads we win, tails you lose,” the defendants failed to disclose to investors both that they structured the Hudson CDOs in late 2006 and early 2007 to decrease Goldman’s own then-existing exposures to subprime mortgage-related financial instruments, and that Goldman would profit from its own short positions when those securities lost value. The specific Hudson CDO securities and their CUSIP numbers at issue are identified in the Notice of Pendency of Class Action available here.

On March 21, 2012, U.S. District Court Judge Victor Marrero granted in part and denied in part the defendants’ motions to dismiss.  A copy of the ruling is available here.

On January 23, 2014, Judge Marrero granted Plaintiff’s motion for class certification.  A copy of the ruling is available here.

On June 27, 2014, the United States Court of Appeals for the Second Circuit denied the defendants’ Rule 23(f) petition for leave to file an immediate appeal of Judge Marrero’s decision granting Plaintiff’s motion for class certification. A copy of the order is available here.

On October 21, 2014, the Court granted Plaintiff’s motion for an order approving the giving of notice to class members. A copy of the Court-approved Notice of Pendency of Class Action is available here.

On September 8, 2015, the Court granted Goldman’s motion for summary judgment, and dismissed Plaintiff’s claims that survived the Court’s prior ruling on the defendants’ motion to dismiss. A copy of the Order is available here.

On February 11, 2016, the parties entered into a settlement agreement whereby the case was settled for $27.5 million, subject to the approval of the Court.  On that same date, Plaintiff sought the Court’s preliminary approval of the settlement.  A copy of the preliminary approval brief and accompanying settlement agreement is available here and here.

On February 16, 2016, the Court granted preliminary approval of the settlement.  A copy of the Court’s order is available here.

Beginning on March 1, 2016, the Claims Administrator distributed a notice (“Notice”) of the settlement to class members.  The Notice was accompanied by a Proof of Claim form. The Notice and Proof of Claim form is available here.

On May 13, 2016, Plaintiff sought final approval of the settlement and an award of attorney fees. Copies of the filings are available here (Final Approval Brief), here (Motion for Final Approval), here (Attorney Fee Brief), here (Motion for Attorneys’ Fees), and here (Declaration in Support of Final Settlement Approval).

On July 1, 2016, the Court held a Final Approval Hearing. The judge approved the settlement in full. Copies of the relevant orders are available here (Order and Final Judgement), here (Order Approving Plan of Allocation), and here (Order Approving Attorney’s Fees).

On August 28, 2017, the Court granted a Distribution Order approving distribution of the settlement funds to authorized claimants. A copy of the order is available here.

If you have any questions regarding this case, please feel free to contact:

Lawrence J. Lederer, Esq.
Berger Montague
1622 Locust Street
Philadelphia, PA 19103
Telephone:  (215) 875-4625 or (800) 424-6690
llederer@bm.net

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