All Milken Suits May Be Merged
The federal judge who drove through a fast settlement agreement in the Drexel Burnham Lambert bankruptcy case said Monday that he will try to consolidate and settle the hundreds of civil lawsuits pending against Michael Milken throughout the country.
U.S. District Judge Milton Pollack took the unusual step of announcing his plan in a press release distributed to courthouse reporters here.
Pollack said he aims to work out a “global settlement” that would save plaintiffs, Milken and federal and state courts the huge expense of protracted litigation and multiple trials.
Milken, 45, the former head of Drexel’s junk bond department in Beverly Hills, pleaded guilty in 1990 to six felony counts. He is serving a 10-year prison term. His actions at Drexel led to a host of civil lawsuits seeking billions of dollars in damages.
Drexel itself is suing Milken, as are the Federal Deposit Insurance Corp., several state insurance commissioners, numerous savings and loans and insurance companies that invested in junk bonds and many other individuals and companies that claim to have been harmed by Milken’s illegal activity.
Pollack acknowledged that there wasn’t any precedent for consolidating so many lawsuits with different specific claims. But in a telephone interview, the judge said the case merits a novel approach “because the courts are loaded with (Milken) cases that otherwise will keep everybody busy for the rest of the decade, with enormous expenditure of effort and time.”
Pollack won strong praise in the legal community last year for intervening in the Drexel bankruptcy case, strongly pressuring thousands of creditors to come to a fast agreement on a plan to distribute Drexel’s assets.
Pollack’s aggressive tactics included a threat to immediately liquidate Drexel if an agreement wasn’t reached quickly, which would have meant far less money for many creditors. The plan, agreed on by most of the lawyers in the case, is up for a formal vote by creditors next month and is expected to be approved.
