In a market environment in which hedge fund and other claim traders face a dearth of large-scale opportunities, a looming $6 billion class action settlement has captured the attention of savvy investors. The settlement, which affects all merchants that accepted Visa and MasterCard since 2004, resolves whether various financial institutions violated antitrust laws by establishing and enforcing practices that charged merchants excessive fees for accepting Visa and MasterCard-branded credit and debit cards while also limiting merchants’ ability to steer customers toward other forms of payment. Although the decision approving the settlement is currently facing pending appeals, merchants that are covered by the settlement have the ability to sell their claims now, thereby guaranteeing themselves a minimum fixed level of return in the class action litigation, while avoiding the risk of a delayed (and unknown) recovery. In a guest article, Darius J. Goldman, head of the distressed debt and claims trading practice of Katten Muchin Rosenman, summarizes the key terms of the settlement as well as issues that claim traders should consider when purchasing a claim subject to the settlement. For more insight from Katten, see “Katten Forum Identifies Best Practices for Hedge Fund Managers Regarding Best Execution, Soft Dollars, Principal Trades, Agency Cross Trades, Cross Trades and Trade Errors
,” Hedge Fund Law Report, Vol. 7, No. 10 (Mar. 13, 2014); “Katten Partner Raymond Mouhadeb Discusses the Purpose, Applicability and Implications of the August 2012 ISDA Dodd-Frank Protocol for Hedge Fund Managers, Focusing on Whether Hedge Funds Should Adhere to the Protocol
,” Hedge Fund Law Report, Vol. 6, No. 4 (Jan. 24, 2013); and “Katten Seminar Provides Hedge Fund Managers with a Roadmap for JOBS Act Compliance
,” Hedge Fund Law Report, Vol. 6, No. 43 (Nov. 8, 2013).