United States District Court for the Eastern District of New York,
Chief Judge Edward R. Korman Presiding (CV-96-4849)

 
 
Bank Claims
2005 Publication

Introduction to the Claims Resolution Process

The Claims Resolution Process provides the first opportunity for Nazi victims and their heirs to have their claims to deposited assets in Swiss banks resolved by an independent body, the Claims Resolution Tribunal (the . CRT. ). This section introduces the CRT and describes its role in the context of the Global Settlement reached in the Holocaust Victim Assets class action litigation in the United States . This section also describes how Deposited Assets Claims are processed.

The Claims Resolution Process and the Global Settlement

The Claims Resolution Process derives from three important documents: (1) the Settlement Agreement in the Holocaust Victim Assets class action litigation in the U.S. District Court for the Eastern District of New York, Chief Judge Edward R. Korman presiding; (2) the Final Order and Judgment of the Court approving the Settlement Agreement of July 26, 2000 (as corrected on August 2, 2000); and (3) the Plan of Allocation and Distribution proposed by Special Master Judah Gribetz, approved by Judge Korman on November 22, 2000, and upheld by the United States Court of Appeals for the Second Circuit on July 26, 2001.

The Settlement Agreement provided for a payment of $1.25 billion to settle claims by members of five represented classes: the Deposited Assets Class, the Looted Assets Class, the Refugee Class, and two Slave Labor Classes. The Plan of Allocation and Distribution set aside up to $800 million of the $1.25 billion settlement for awards to Deposited Assets class members. In setting aside this amount, the Plan relied on the results of a three-year investigation of Swiss banks conducted by the Independent Committee of Eminent Persons (. ICEP. ).

On December 8, 2000 , Judge Korman appointed Mr. Paul Volcker and Mr. Michael Bradfield, former Chairman and Counsel, respectively, of ICEP, as Special Masters to establish, organize, and supervise the Claims Resolution Process, using the already existing CRT as the forum for the processing of Deposited Assets claims. On April 13, 2004 , Judge Korman appointed Dr. Helen B. Junz, formerly a member of the Bergier Commission, as an additional CRT Special Master. Mr. Volcker is no longer serving as CRT Special Master due to his commitment to the ongoing United Nations . food-for-oil. investigation.

The CRT was initially established in 1997 to arbitrate claims to 5,570 dormant accounts in Swiss banks that were published in 1997 prior to the completion of the ICEP investigation. That arbitration process is now referred to as . CRT-I.. The accounts adjudicated by CRT-I dated from 1933 to 1945 and remained open and dormant. Those accounts were owned by both Victims of Nazi persecution and others who were not persecuted. Ultimately, CRT-I adjudicated over 9,000 claims to accounts published in 1997. The work of CRT-I involving these accounts was completed in the spring of 2001. The CRT-I process awarded 207 accounts totaling $11,700,000 to Victims of Nazi persecution or their heirs, payable from the Settlement Fund.

The CRT began a new phase of its existence when it was charged with the processing of Deposited Assets claims as part of the Global Settlement and is now known as . CRT-II. (here, the . CRT. ). Guided by the principle that individual claims to deposited assets in Swiss banks must be individually assessed, rules to govern CRT-II were developed to substantially accelerate the resolution of claims while maintaining the full benefits of due process of law. Please click here (link to Governing Rules) to see the Rules Governing the Claims Resolution Process, as amended (the . Rules. ).

How Deposited Assets Claims are Processed

 All Deposited Assets Claims are reviewed by a highly qualified team of international lawyers, based in Zurich and New York , who possess wide-ranging language capabilities. They are assisted by paralegals, researchers, and an administrative staff.

Claimants were directed to send their completed Claim Forms to the Claims Registration Office in New York . The Claims Registration Office assigned each claim an individual claim number and entered the information contained in the form into a database. An image of each Claim Form has been scanned into a computer system.

The Claim Forms were then forwarded to the CRT. s offices in Zurich . There, folders were created for each claim, together with any previously filed claims, supplemental documents, and correspondence with the claimant.

The Rules grant the CRT jurisdiction over claims to Deposited Assets owned by Victims or Targets of Nazi persecution. According to the Settlement Agreement, a Victim or Target is any individual who was persecuted or targeted for persecution by the Nazi regime because he or she was or was believed to be Jewish, Romani, Jehovah. s Witness, homosexual, or physically or mentally disabled or handicapped. The CRT reviews each claim to determine whether the claimed account owner was a member of one of these five categories. If a claim is deemed inadmissible, the Claimant will be notified. A Claimant whose claim has been ruled inadmissible has the right to appeal this decision by writing to the CRT within 60 days.

All admissible claims are matched against the names of Account Owners of approximately 36,000 accounts that were identified by ICEP as probably or possibly belonging to Victims or Targets of Nazi persecution. These matches are then reviewed to determine whether the person identified in the claim form as the claimant. s relative is the person identified in the banks. records as the Account Owner. Reviewers consider such factors as the Account Owner's city and country of residence, profession, marital status, and family member names. Claimants who have not plausibly identified their relative as the Account Owner will be notified and will have the opportunity to appeal the CRT's decision by presenting new evidence regarding their relative.

Accounts that are determined to have belonged to a claimant. s relative are then reviewed to determine whether the claimant. s relative has previously received the proceeds of the account. The Rules specify presumptions used by the CRT to determine whether the Account Owner or his or her heirs received the proceeds. If the CRT finds that it is plausible that the Account Owner or his or her heirs did not receive the proceeds of the claimed account, it then analyzes the banks. records regarding the account to determine its type and value. The amount of the award is based upon the historic value of the account, adjusted for fees and interest. If the historic value of an account is unknown, the CRT relies on the results of the ICEP investigation as to the average value of the same or similar type of account during the time period from 1933 to 1945. As of August 25, 2003 , all account values are multiplied by a standard factor of 12.5 to adjust them to current values. Finally, the CRT determines how the account proceeds are to be divided among the claimant and any party he or she may represent. The Court reviews and approves all decisions. Once an award is determined by the CRT and is certified to the Court by the CRT, recommended by the Special Masters and approved by the Court, it will be paid by the Special Masters to the claimant upon the approval of the award by the Court. Payments of Court-approved awards will be made by the Special Masters from an awards payment account funded from the Settlement Fund. Prior to payment, claimants are required to sign an acknowledgement form which releases claims to the awarded accounts and which obligates them to share the award amount with any other heirs of the Account Owner who may be entitled to the proceeds of the account pursuant to Article 23 of the Rules.

As of July 2006, approximately $319 million has been awarded to over 3,842 claimants. In CRT-I, completed in early 2001, 207 accounts totaling $18.2 million were paid to account owners or heirs of account owners who were Victims or Targets of Nazi persecution. It is anticipated that several thousand additional claims will be processed and paid from the approximately 32,000 claims filed in connection with the original list of 21,000 accounts published in February 2001. In addition, the CRT continues to process the additional approximately 40,000 Initial Questionnaires, which were submitted to the Court in 1999 by potential class members. Although these Initial Questionnaires were not Claim Forms, the Court, in an Order signed on July 30, 2001, ordered that those Initial Questionnaires which can be processed as claim forms be treated as timely claims.

In the event that any residual funds remain unpaid from the up to $800 million allocated to the Deposited Assets Class, in November 2003, the Court requested that interested parties file proposals recommending suggested uses for such unclaimed funds. However, in its opinion of February 19, 2004, amended on June 1, 2004, the Court also observed that there was insufficient data to enable the CRT to reach an appropriate estimate of the total amounts to be paid to the Deposited Assets Class, partly because of then-ongoing and unresolved discussions with the defendant Swiss banks relating to the CRT's ability to access bank documentation for the accounts published in 2001, as well as bank records for the approximately 4.1 million Holocaust-era accounts that were not published in February 2001. The Court observed that the Deposited Assets Class claims had the greatest legal merit and that the Court was obligated to make certain that the amounts to be paid to Deposited Assets Class claimants would not exceed the $800 million set aside for that class. Accordingly, while the Court directed the Special Master to receive and analyze proposals on the use of possible unclaimed residual funds, received the recommendations of the Special Master on April 16, 2004, and held a hearing on the proposals and recommendations on April 29, 2004, the Court awaits further data from the Deposited Assets Class process and has not issued a decision on the existence, or possible uses, of unclaimed residual funds.

Relevant documents relating to the Court's request for proposals on unclaimed residual funds, its analysis of the issues impacting the amount, if any, of such funds, and the Special Master's analysis of proposals, can be viewed at www.swissbankclaims.com:

* Special Master's Interim Report on Distribution and Recommendations for Allocation of Unclaimed Residual Funds, October 2, 2003

* Court's Order of November 17, 2003 soliciting proposals for use of unclaimed residual funds

* Court's Opinions of February 19, 2004 (amended June 1, 2004 ) concerning Swiss banks and access to information

* Court's Opinion of March 9, 2004 addressing legal strength of Deposited Assets Class claims and also examining relative needs among survivor communities

* Special Master's Recommendations for Allocation of Possible Unclaimed Residual Funds, April 16, 2004

On June 10, 2004 , several of the concerns impacting the resolution of Deposited Assets Class claims were addressed in an agreement between settlement counsel of the plaintiff class and counsel for the defendant Swiss banks. The parties entered into an agreement approved by the District Court on June 17, 2004 , the "Second Memorandum to the File." The agreement was intended to improve the claims processing of the Deposited Assets Class by adding a New York office of the CRT and publishing approximately 2,700 additional names of Account Owners and 400 additional names of Power of Attorney holders. The list of additional names (“2005 List”) included names of Account Owners and Power of Attorney holders of accounts previously identified by the ICEP auditors as possibly belonging to Holocaust victims, but which were not previously published. In addition, the 2005 List included names previously registered with the Swiss government pursuant to the 1962 Swiss Federal Decree on Assets of Victims or Racial, Religious and Political Persecution, as well as names of Polish and Hungarian account owners whose World War II era accounts were the subject of post-War international agreements between Switzerland, Poland and Hungary . The 2005 List also included names of Account Owners and Power of Attorney Holders located by the CRT’s own archival research. The 2005 List was published on January 13, 2005. The deadline for filing claims related to the 2005 List has expired. Approximately 2000 claims filed in connection with the 2005 List of names of Account Owners and Power of Attorney holders published in January 2005 are being carefully analyzed by the CRT according to the steps set forth above.