SAN DIEGO- LAWFUEL – The Law News Network – Oct. 27, 2005–Lerach Coug…

SAN DIEGO- LAWFUEL - The Law News Network - Oct. 27, 2005--Lerach Coughlin Stoia Geller Rudman & Robbins LLP, the nation's leading law firm representing institutional investors in securities litigation, earlier today announced it had recovered more than $651 million for institutional investors in individual non-class action lawsuits arising out of the financial collapse of WorldCom Inc. Following this announcement and subsequent conference call, the lead plaintiff in the class action lawsuit issued a press release attacking the firm's analysis of its clients' recovery. "We were saddened to read the attacks on our analysis of the unprecedented recovery for our clients in the WorldCom matter by the class action lead plaintiff," said William S. Lerach. "We went out of our way in the press conference this morning to compliment the class on their excellent recovery. However, when the numbers are properly understood, our clients' recovery is substantially better than what they would have recovered in the class action. We have attempted to be as transparent and accurate in our analysis as possible." In a response to each of the issues raised in the New York State Retirement Fund's press release, Lerach Coughlin notes the following: 1. The statement that we inflated the damage numbers for the class action in order to make the class recovery look lower. Our response: The damage numbers for the class action set forth in Exhibit A to our press release (the comparison chart) were taken directly from the expert report of the lead plaintiff's damage expert -- Blaine Nye. 2. The statement that the damage number of $12.3 billion for the May 2000 and May 2001 offerings in our chart for the class action was inaccurate because it includes damages for our clients that opted out of the class. Our response: The purpose of the comparison chart in Exhibit A was to simply show what our clients would have received if they had remained in the class action versus their actual recovery. Our clients are receiving a premium to their imputed class recovery by getting a 45-67% recovery net of fees and expenses on these two bonds. 3. The release attacks our assumption of a 90% claim rate in the class action with the implication being that a lower claim rate will yield the class a greater recovery. Our response: That is true except for the fact that we have been told by one of the defendants' counsel that they expect the claim rate to be 95%, which means we were being conservative in our calculations. Since the claim date has passed and all claims have been filed, if we were so far off in our assumption of a 90% claim rate you would expect class counsel to provide that information to the State of New York to include in its press release. The WorldCom bonds were held by sophisticated institutions, it was a highly publicized fraud and settlement, and it is not surprising that almost 95% of institutions that bought the bonds would be claiming on the settlement fund. 4. The release attacks our prior statements about our clients' bond losses. Our response: The May 2003 letter referred to in the release which discusses our clients having $1.4 billion in bond losses was accurate at the time. Some of our clients had claims that were dismissed by Judge Cote and they decided to dismiss their private actions and go back into the class after May 2003. These clients had bond losses of at least $150 million which were included in the $1.4 billion number. Our bond losses for the August 1998, December 2000, May 2000, and May 2001 offerings now total $1.25 billion. Of that amount, approximately $1 billion is for the May 2000, May 2001 and December 2000 bonds and the remainder is for the August 1998 offering, which was treated like the common stock by the class action. Our current overall total of $2 billion for bond and stock claims is accurate. 5. The release claims that our recovery of $620 million (it is actually $644 million excluding interest per the comparison chart) is a recovery of 43% based on bond claims of $1.4 billion which is the same as the class recovery. Our response: Our bond claims are $1 billion for the May 2000, May 2001 and December 2000 bonds. For these bonds we recovered a total of $610 million ($482 million for the May 2001 bonds, $103 million for the May 2000 bonds, and $24.5 million for the December 2000 bonds). A recovery of $610 million based on total bond claims of $1 billion is approximately 60%. As set forth on the comparison chart attached to our press release, our clients' recovery on the May 2000 and May 2001 bonds is 62-67% for most clients, and 45% for some clients on the May 2000 bonds. The August 1998 bonds were treated the same as common stock by the class and we also treated them the same and included them in the comparison chart as part of the common stock recovery. There is no reason to lump those bonds in with the other bonds for the purposes of this comparison. 6. The release claims we have manipulated the stock damages. Our response: The market capitalization losses for the class were $160 billion based on 2.97 billion shares outstanding and a stock decline from the $50-$60 per share range to as low as $0.06 per share. We used $100 billion in the comparison chart to give the class the benefit that only approximately 62% of class members would file a claim. Footnote 5 to the chart reflects this assumption and reduces the market cap losses to $100 billion. Unlike the bond claimants who are highly sophisticated and we expect will file a very high rate of claims, the common stock holders are a more diverse lot and it is possible the claim rate will be around 60%, which is the average for stock claims in class actions. The class claims it has common stock damages of $30 billion. We calculated our clients' losses based on market losses and for comparison purposes calculated the class losses in the same manner. Had we reduced our clients' losses in a fashion similar to the class, our clients' losses would be substantially lower than the $720.9 million presented and the recovery percentage would have been substantially higher than 2.97%. 7. The class action lead plaintiff claims our clients' overall recovery if they had stayed in the class is understated. Our response: The points above addressed these issues. We have not inflated the class loss numbers and have used a realistic claim rate for the bonds for the class. The comparison chart lays out what our clients would have obtained in the class assuming they remained in the class versus what they are receiving in their private action. 8. The release attacks our presentation of our fees. Our response: We presented the recovery net of fees because we thought that was a fairer presentation than the gross number other firms present. The net figure presented is the amount the clients will receive, rather than a gross-up number as used by other individual action settlements and even the class action. 9. The release claims we understated the class settlement and did not include interest. Our response: Exhibit A to the press release shows the class recovery of $5.841 billion. We did not add interest to the class recovery because its not added to the private recovery in Exhibit A, which shows a $645 million recovery. For consistency purposes, interest was not included in either amount. 10. The release claims we misstated the source of the recovery from Ebbers and Sullivan. Our response: Our understanding is that the government negotiated as part of the Ebbers and Sullivan sentencing an agreement for those individuals to forfeit most of their personal assets. The class had a role in working with the government to set up the trust. Our clients will get a portion of that fund. Lerach Coughlin Stoia Geller Rudman & Robbins LLP, with over 160 lawyers in San Diego, Los Angeles, San Francisco, Seattle, Houston, Boca Raton, Philadelphia, Washington D.C. and New York City, is the nation's leading law firm specializing in representing institutional investors in shareholder suits. The firm has recovered billions of dollars for its clients. Most recently, the firm has, to date, recovered $7.1 billion for damaged Enron investors, the largest securities class action recovery in history.

SAN DIEGO- LAWFUEL – The Law News Network – Oct. 27, 2005–Lerach Coug…

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