ROSENFELD v. Louis G. Bissell, Jr., et al., Objectors-Appellants. (1997)

Judgment, Supreme Court, New York County (Ira Gammerman, J.), entered February 16, 1996, which, inter alia, approved the proposed settlement, dismissed the complaint on the merits and with prejudice, and awarded $560,000 in attorneys' fees, unanimously affirmed, with costs.

The IAS court properly approved as fair, adequate and in the best interests of the class a settlement that required defendants to disclose to their customers that they received compensation from borrowing and lending securities in their customers' margin accounts, but did not provide any cash benefits to the class members, where the likelihood of success was highly questionable in view of defendants' then pending motion to dismiss on Federal preemption grounds (see, Guice v. Schwab & Co., 89 N.Y.2d 31, 651 N.Y.S.2d 352, 674 N.E.2d 282);  only 253 of the over 5 million class members opted out and only 55 members objected;  the complaint sought predominantly equitable relief;  the negotiations were conducted at arm's length and over an extensive period;  the likelihood of proving individual damages was remote;  and the cost of establishing such damages would likely exceed the amount recovered (see, Matter of Colt Indus. Shareholder Litigation, 155 A.D.2d 154, 160, 553 N.Y.S.2d 138, mod on other grounds 77 N.Y.2d 185, 565 N.Y.S.2d 755, 566 N.E.2d 1160).

MEMORANDUM DECISION.