July 25, 2019
On July 22, 2019, Weil secured a complete victory for global insurance broker Willis Ltd. when the U.S. Court of Appeals for the Fifth Circuit affirmed a $120 million settlement resolving allegations that Willis fraudulently induced investments in the Stanford Ponzi scheme – the second biggest Ponzi scheme in history after Madoff. (Weil’s representation of legacy Willis pre-dates that company’s 2016 “merger of equals” with Towers Watson.)
Weil designed the settlement and convinced the U.S. District Court for the Northern District of Texas to approve it in 2017 with an order barring all other pending suits – even those in state court – overruling objections by the state court and other plaintiffs that the federal court had no jurisdiction to stop cases not before it. This provided Willis with certainty that the settlement would resolve all related claims and made the settlement, and thus investor recovery, possible.
The Fifth Circuit affirmed and overruled investors that argued that the district court lacked jurisdiction to bar claims not before it. Instead, the Fifth Circuit acknowledged the wisdom of the structure of the settlement: “By entering the bar orders, the district court recognizes the reality that, given the finite resources at issue in this litigation, Stanford’s investors must recover Ponzi-scheme losses through the receivership distribution process,” the panel said. “The brokers’ incentives to settle are reduced – likely eliminated – if each investor retains an option to pursue full recovery in individual satellite litigation. Such resolution is no resolution.”
This victory marks the resolution for Willis of many years of litigation.