Just the Facts
On February 9, 2012, bondholders filed cases alleging artificial manipulation of the London Interbank Offered Rate (LIBOR) for the U.S. dollar over a period of several years. Eight years and two dismissals later, bondholders have now reached proposed settlements totaling $68.625 million. These preliminary settlements range from $6.25 million to $17.9 million and represent a partial settlement of all bondholder claims.
This $68.625 million bondholder settlement is one of the many LIBOR based antitrust litigations consolidated with In re LIBOR-Based Financial Instruments Antitrust Litigation, MDL No. 2262, No. 11 Civ. 2613, pending in the United States District Court for the Southern District of New York. To date, the total settlement amount across this MDL for alleged LIBOR manipulation is approaching the $1 billion mark.
The settlement class includes all persons and entities who, during the period from August 1, 2007, through May 31, 2010, inclusive (the “Class Period”), owned (including beneficially in “street name”) any bond or other debt security:
- that has a CUSIP identification number;
- on which interest was payable at any time between August 1, 2007, and May 31, 2010;
- where that interest was payable at a rate expressly tied to U.S. Dollar LIBOR;
- and that was not issued by any of the Defendants, their subsidiaries or affiliates as obligor.
The claim filing deadline to participate in the settlements is December 28, 2020 and exclusions or objections must be postmarked by November 17, 2020. A fairness hearing will be held on December 16, 2020.
LIBOR is the primary benchmark for short term interest rates globally with an estimated open notional exposure of $350-$370 trillion across derivatives, bonds, loans and other instruments. In the wake of rigging scandals such as those alleged here, regulators around the world are encouraging financial companies to use other benchmarks such as the Secured Overnight Financing Rate (SOFR) or Sterling Overnight Index Average (SONIA). Publication of LIBOR will cease after 2021. For additional information on the LIBOR transition, you can access our white paper here.