Holocaust Settlement Approved

Concluding a long and contentious process, a federal judge on Wednesday approved a plan to distribute $1.25 billion to Holocaust survivors.

The ruling by U.S. District Judge Edward R. Korman--which used a complex set of formulas for payments--was designed as the final chapter in survivors’ lawsuits against Swiss banks.

But some lawyers said they expected an appeal.

“I think the decision certainly should be reviewed by the court of appeals. It is historic, but it is tragically inadequate,” said Samuel J. Dubbin, a Miami lawyer who filed objections to the settlement.

“There are serious questions about the fairness of the settlement to begin with, serious questions about the adequacy of the sums and serious questions about whether or not it was a fair compromise for the victims,” he said.

Dubbin labeled “paltry” the sum agreed upon in the settlement “relative to the theft that is known to have taken place.”

On Monday, Korman presided over an emotional hearing in federal court in Brooklyn, during which Jewish survivors rekindled bitter memories and fought over how the settlement funds would be allocated.

But Elan Steinberg, executive director of the World Jewish Congress, on Wednesday praised Korman’s order.

“Hopefully, after two years, [the ruling] will allow for a rapid distribution of funds,” Steinberg said. “The concern now is we are going to have some frivolous appeals that would only serve to block distribution . . . to an aging and dying survivor population,” he added.

In his order, Korman stressed that while the settlement fund is “substantial,” it was insufficient to do justice to all people who suffered and made claims.

According to the plan approved by Korman and drafted by Judah Gribetz, a former deputy mayor of New York City whom the judge had appointed as a special master, priority for payment will be given to the persecuted holders of Holocaust-era accounts in Swiss banks.

Korman praised Gribetz for his “deep understanding of all issues related to the Holocaust.”

The first step will be publication of names and identifying information connected to about 26,000 World War II-era accounts related to Holocaust victims.

The largest settlement sum, $800 million, was set aside to ensure that the owners of these accounts are paid in full, including interest.

Any unused funds in this category will be distributed to other classes of beneficiaries.

The additional $450 million will be divided among refugees who were refused entry to Switzerland, people who were forced into slave labor for companies with Swiss accounts and Holocaust victims whose possessions were stolen by the Nazis and ended up in Switzerland.

In the plan he crafted, Gribetz recognized that it would be impossible to pay all the heirs of slave laborers who died, because the cost of locating them would be too high and the sums distributed would be nominal.

Thus, the decision was made to primarily pay survivors. It is estimated that the survivors will receive about $1,000 each.

Refugees who were denied entry or who were expelled from Switzerland can receive up to $2,500. Plans call for publishing the names of 4,000 people known to have been refused entry because they were Jewish.

In his court order, Korman said that his decision to appoint Gribetz to propose a distribution plan was motivated by a desire to spare Holocaust survivors from being forced into an adversarial relationship.

“It was hoped that a neutral special master, acting with the guidance of the affected community, could . . . propose a plan of allocation and distribution that would do non-adversarial justice to the claims of all class members,” the judge said.

As part of the process, the proposed plan was translated into 21 languages and sent to 675,541 people and organizations throughout the world.

Korman said that more than 99% of the Holocaust victims or their survivors did not submit any comments, and presumably had no objection.

In August 1998, after months of often-bitter negotiations between lawyers for the Holocaust victims and their heirs and the banks, Credit Suisse and UBS, Korman played a major role in crafting a settlement.

The agreement ended threats of sanctions against the Swiss banks by about 20 states and 30 municipalities throughout the United States.

During the entire process, the pressure of the ticking clock was evident. Many of the Holocaust survivors were elderly and frail. Some who filed the original suits died before they could see the settlement concluded.

The clock also apparently was on the judge’s mind.

In his order approving the plan to distribute funds, Korman said he wanted to proceed as expeditiously as possible.