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plaintiffmotionclass action
plaintiffclass action

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Gorham v. General Growth Properties, Inc., 256 F.R.D. 602

Facts

The case involved four related federal securities class actions against General Growth Properties, Inc. Various plaintiffs sought lead plaintiff designation under the PSLRA. E.B. Gorham was the first filer, followed by Charles Shea and Sherry Barrett, but none moved for lead plaintiff appointment. Sharankishor Desai later expressed interest in being lead plaintiff but recognized that a larger investor, the Self Development Church, had a greater financial stake and had retained the same counsel. After several motions for lead plaintiff were withdrawn, the court was left with Shea and Desai as the only candidates.

The case involved four related federal securities class actions against General Growth Properties, Inc. Various plaintiffs sought lead plaintiff designation under the PSLRA. E.B. Gorham was the first filer, followed by Charles Shea and Sherry Barrett, but none moved for lead plaintiff appointment.

Issue

Who should be designated as the lead plaintiff in the securities class actions under the PSLRA?

Who should be designated as the lead plaintiff in the securities class actions under the PSLRA?

Rule

The PSLRA allows for the designation of a lead plaintiff based on who has the largest financial interest in the relief sought by the class, but this presumption can be rebutted by the adequacy of the plaintiff's choice of counsel.

The PSLRA allows for the designation of a lead plaintiff based on who has the largest financial interest in the relief sought by the class, but this presumption can be rebutted by the adequacy of the plaintiff's choice of counsel.

Analysis

The court analyzed the proposals from both Shea and Desai, noting that while Shea had a nominal financial interest, Desai's chosen counsel, Izard Nobel, had a superior fee arrangement that would benefit the class more significantly. The court emphasized that the choice of counsel is a critical factor in determining the adequacy of a lead plaintiff, and Shea's proposal was deemed inadequate in comparison to Desai's.

The court analyzed the proposals from both Shea and Desai, noting that while Shea had a nominal financial interest, Desai's chosen counsel, Izard Nobel, had a superior fee arrangement that would benefit the class more significantly.

Conclusion

The court appointed Sharankishor Desai as the lead plaintiff, concluding that he was the most adequate plaintiff based on the superiority of his counsel's fee proposal.

The court appointed Sharankishor Desai as the lead plaintiff, concluding that he was the most adequate plaintiff based on the superiority of his counsel's fee proposal.

Who won?

Sharankishor Desai prevailed in the case because his chosen counsel's proposal was deemed superior, ensuring better representation for the class.

Sharankishor Desai prevailed in the case because his chosen counsel's proposal was deemed superior, ensuring better representation for the class.

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