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Size of Lead Plaintiff’s Payout Compromises Debt Class Deal

Dec. 16, 2019, 9:44 PM

The disproportionate amount of settlement money the lead plaintiff in a debt collection lawsuit would get compared to other class members has raised red flags for the Southern District of New York.

The proposed settlement, in a suit alleging Rausch, Sturm, Israel, Enerson & Hornik LLP sent consumers misleading debt collection letters, creates a $28,500 fund to be shared by the nearly 5,400 class members.

Lead plaintiff Arthur Johnson would get $1,500 while class members could get as little as $5, under the terms of the settlement the parties want approved. Class counsel would get an additional $30,000 in attorneys’ ...