Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 1 of 8 EXHIBIT E EXHIBIT E

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1 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 1 of 8 EXHIBIT E EXHIBIT E

2 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 2 of 8 DISTRIBUTION PLAN Beaver, et al. v. Tarsadia Hotels, et al. The Net Settlement Fund, which consists of the money remaining after attorneys fees and costs, Settlement Administration Costs, and service awards are deducted, will be distributed to Class members pursuant to the following Distribution Plan. The basic methodology is to first calculate the pro rata share of the Net Settlement Fund for each unit owned by one or more members of the Class, and then, if there is more than one owner, determine how that amount should be allocated among the owners. Generally, the pro rata shares are determined based on the original purchase price and either the current value of the unit if still owned, or what the Class member(s) received when the unit was sold or lost in foreclosure. More specifically: Step One Appraise Each Unit Still Owned: For Class members who still own their units, the Distribution Plan requires that the current value of the units be known. See Step Two, infra. The appraisals would be completed within forty-five (45) days of the Preliminary Approval Order, and posted on a website maintained by the Settlement Administrator. Step Two Calculate the Estimated GPR for each Unit Owned by a Class Member: Within 15 days after the Effective Date, the Settlement Administrator will calculate the estimated Gross Potential Restitution, or GPR, for each unit purchased by a Class member (or group of Class members). The GPR is calculated as follows for the three categories of units purchased by Class members: For units still owned, the GPR is the difference between the original purchase price and its current value, as appraised per Step One above; For units sold by a Class member (or group of Class members), the GPR is the difference between the original purchase price and the resale price, as recorded by the San Diego County Assessor/Recorder; and 1

3 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 3 of 8 For units lost to foreclosure, 1 the GPR is the difference between the original purchase price and the loan balance discharged in foreclosure, which the Settlement Administrator shall presume to be the loan amount as recorded by the San Diego County Assessor/Recorder on the theory that most or all the payments went to interest rather than principal. Pursuant to Step Three below, any Class member affected by this presumption may submit documentation demonstrating that the amount of the loan discharged through foreclosure was less. Step Three Letter Summarizing Settlement Calculation Inputs: Within fifteen (15) days of the completion of Step Two, the Settlement Administrator will send each member of the Class a letter summarizing the values or inputs to be used to calculate the amount of restitution for each unit they own, 2 as well as any other determinations to be made by the Settlement Administrator. See Klier v. Elf Atochem N. Am., Inc., 658 F.3d 468, 480 (5th Cir. 2011) (allocation plan may be based on a formula). Where a unit is owned by more than one member of the Class, this letter will also identify the Settlement Administrator s determination of each Class member s percentage of ownership, if known. These percentages will be used in all distribution checks unless corrected as provided below. If the respective percentages of ownership are not known, the Settlement Administrator will request that the Class members submit appropriate documentation reflecting each owner s share of the unit. If the Class members fail to respond, any distribution checks issued by the Settlement Administrator shall be issued in the name of all co-purchasers. If a unit was purchased by an entity such as a Limited Liability Company, the Class member is the entity and the settlement check(s) will be made out to the entity. Also, with the exception of Mixed Units 3, if a unit 1 Class members who voluntarily returned the deed to their unit in lieu of foreclosure will be treated as if they foreclosed. 2 The Settlement Administrator may rely on the initial grant deeds to identify the original purchasers. 3 Mixed Units refers to units purchased by multiple Persons, where one or more of the purchasers, but not all, were either a named plaintiff in Salameh or signed the Settlement Agreement And Mutual Release in Bell. 2

4 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 4 of 8 was purchased by a married couple, then the settlement check(s) will be made out to both spouses. Letters sent to co-purchasers of Mixed Units who are Class members (because they were not named plaintiffs in Salameh, and did not sign the release in Bell) will be similar, except that the letter will make clear that the co-purchaser(s) excluded based on Salameh and/or Bell will not receive a share of the Settlement. The amount of the Net Settlement Fund distributed for a Mixed Unit will be reduced by the excluded purchaser s percentage of ownership. Where one purchasing spouse is excluded from the Class based on Salameh and/or Bell, and the other is not, the spouse who is a member of the Class is entitled to one half of what would have been awarded to the couple but for the other spouse s exclusion pursuant to Salameh and/or Bell. The letter will advise Class members that they have thirty (30) days (as determined by the postmarks) to submit by mail written documentation correcting or challenging any input, value, or determination relevant to the allocation, except that the current appraised value of a unit (which is relevant to those who still own their units) may not be contested. The Settlement Administrator will send a reminder to those Class members who do not respond, providing them an additional thirty (30) days to respond. If no response is received, then the inputs, values, and other determinations summarized in the letter will be used to calculate distributions. The Settlement Administrator will have discretion to change any input, value, or determination if the Class member timely submits documentation that clearly demonstrates that the change is appropriate, with the exception that appraisal values cannot be challenged. See Newberg on Class Actions, 12:22 ( The administrator is often charged by the settlement agreement (and the court) with reviewing and approving or rejecting claims ); Manual for Complex Litigation, (4th ed.) ( The administrator or special master may be charged with reviewing the claims and deciding whether to allow claims that are late, deficient in documentation, or questionable for other reasons ). The Class member may appeal these determinations before the Special Master referenced in Step Seven below by notifying the Settlement Administrator of his/her/its decision to do so in writing within fifteen (15) days of the decision on the contested input, value, or determination by the Settlement Administrator. See Newberg on Class Actions, 12:22 3

5 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 5 of 8 ( Similarly, the Settlement Agreement may, though it need not, set forth a procedure for appealing the administrator s determinations ). The Settlement Administrator will advise Class members who so appeal that they have thirty (30) days to submit a writing summarizing the basis for their appeal, along with supporting documentation, to the Settlement Administrator. The Settlement Administrator will promptly provide copies of such appeals to the Parties and to the Special Master. The Settlement Administrator may also use this letter to disclose such other determinations, or request such other information as it deems appropriate, such as information to be submitted if an individual Class member is deceased, or if an entity Class member has been dissolved. Class Counsel will file a status report once the deadline for appeals in Step Three has expired. Step Four Calculate Estimated Proportionate Share for each Unit: Next, the Settlement Administrator will calculate an estimated Proportionate Share for each such unit by dividing that particular unit s estimated GPR by the aggregate sum of the estimated GPRs for all units owned by Class members. This yields a percentage that will be used in the next two steps. Step Five Determine Amount Available for Initial Distribution: The exact amount each Class member is entitled to receive cannot be determined until the following things are known: (a) all Settlement Administration costs; and (b) whether any appeals of input determinations by the Settlement Administrator succeed. To mitigate the potential hardship that could arise if payments are delayed until these things are known, the Distribution Plan provides for an initial distribution to Class members who have not appealed any determinations of the Settlement Administrator. For those Class members who have not appealed a determination by the Settlement Administrator and own their unit with other Class members, an initial distribution will only be possible where the percentages of ownership are known. The Settlement Administrator will not send an initial distribution to a Class member if the Settlement Administrator cannot determine a minimum amount to which the Class member is entitled. To calculate how much can be safely distributed in initial distributions, the Settlement Administrator will first deduct attorneys fees 4

6 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 6 of 8 and costs, service awards, and previously incurred Settlement Administration Costs from the Settlement Fund, and then determine how much more of the Settlement Fund should be held in reserve to cover: (a) additional Settlement Administration Costs; (b) possible increases in GPRs for units owned by Class members who appeal the Settlement Administrator s determination of contested inputs; (c) an additional reserve of 20% of the Net Settlement Fund for unexpected contingencies; and (d) any other amounts that the Settlement Administrator or Class Counsel reasonably believe are appropriate in light of the circumstances. At the same time, Class Counsel will file a status report outlining not only the amount so reserved and how that reserve was calculated, but also the overall status of the Distribution Plan. Step Six Initial Distribution: For each unit owned by a Class member or members entitled to receive an initial distribution, the Settlement Administrator will calculate the amount of that distribution by multiplying (a) the estimated Proportionate Share for that unit, and (b) the amount of the remaining Settlement Fund not held in reserve pursuant to Step Five. The Settlement Administrator shall distribute these checks to the owners of those units according to their respective percentages of ownership. This shall be done not less than fifteen (15) nor more than forty-five (45) days after the filing of the status report mentioned in Step Five. The initial distribution (Steps Five and Six) may be skipped if there are no appeals to the Special Master, or the Settlement Administrator in consultation with Class Counsel deems it appropriate based on the likelihood that the Special Master will quickly resolve the remaining issues. In that event, the Settlement Administrator will proceed to Steps Eight and Nine (after remaining issues are resolved). The Settlement Administrator, with the approval of Class Counsel, may: (a) require Class members to sign a form certifying certain representations before receiving distribution checks, such as that the Class member knows of no other recipients entitled to those funds; or (b) add language to distribution checks stating that the recipient makes certain certified representations by depositing the check. Step Seven The Special Master: A Special Master appointed by the Parties will resolve any appeals provided for in Step Three. The Special Master shall affirm the determination of the Settlement Administrator unless 5

7 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 7 of 8 the Class member clearly demonstrates error. The Special Master will make his or her determinations based on the written submissions submitted by the Class member to the Settlement Administrator, without other submissions or proceedings unless the Special Master orders otherwise. All determinations made by the Special Master in such appeals shall be final and binding. Newberg on Class Actions, 12:22 ( Similarly, the Settlement Agreement may, though it need not, set forth a procedure for appealing the administrator s determinations ); see also In re Sulzer Orthopedics and Knee Prosthesis Products Liability Litigation, 398 F.3d 782 (6 th Cir. 2005). If the need arises, the Special Master will determine whether a particular person is or is not a member of the Class according to procedures the Special Master deems appropriate. Any such determinations by the Special Master will be subject to de novo review by the District Court. See Catholic Social Services, Inc. v. Chertoff, 2008 WL , *2 (E.D. Cal. 2008) (holding due process requires de novo review of special master s determination that individual was not a member of the settlement class). To avoid significant delays in providing settlement benefits to members of the Class, the Settlement Administrator, in consultation with Class Counsel and with advance notice to the Parties and the District Court, may make one or more interim distributions using the methodology described in Steps Five and Six above. The Special Master will be paid from the Settlement Fund per the terms set forth in the Settlement Agreement and these costs will be considered part of the costs of administering the Settlement. Step Eight Calculate Final GPR and Proportionate Share for each Unit: Once final determinations are made on all disputed issues submitted to the Special Master, and once any permissible appeals to the District Court are resolved, Class Counsel will submit another status report to the District Court that summarizes the determinations made and how they will affect the Settlement, and the Settlement Administrator shall recalculate the GPRs and Proportionate Shares for each unit to the extent necessary. Step Nine Final Distribution: Finally, the Settlement Administrator will assess the remaining Settlement Administration Costs, and thereby finally determine the exact value of the Net Settlement Fund. Using the final Proportionate Share for each unit purchased by a Class 6

8 Case 3:11-cv GPC-KSC Document Filed 04/24/17 PageID Page 8 of 8 member(s), the Settlement Administrator will then calculate the value of the portion of the Net Settlement Fund that should be allocated to each unit, and then mail final distribution checks to Class members that account for any previous distributions. If any settlement checks are uncashed after ninety (90) days or undeliverable, the Settlement Administrator will make additional reasonable efforts to distribute those funds, which depending on the circumstances could include the hiring of private investigators to locate Class members if less expensive methods fail. Class Counsel will be involved in the decision to hire a private investigator, the selection thereof, and oversight of the investigation. Here, aggressive measures to locate all Class members are warranted because of the relatively small size of the Settlement Class and the relatively large size of each member s share of the Net Settlement Fund. If all reasonable efforts are exhausted, any uncashed or undeliverable amounts, as well as any left over Settlement Administration costs, shall be distributed pro rata to Class members who cashed their checks, unless Plaintiffs Counsel, with District Court approval, deems the residual too small to efficiently distribute, in which event the residual will be paid cy pres to an appropriate charity or non-profit suggested by Plaintiffs and approved by the District Court. Lane v. Facebook, Inc., 696 F.3d 811, 819 (9th Cir. 2012) (the cy pres doctrine allows a court to distribute unclaimed or non-distributable portions of a class action settlement fund to the next best class of beneficiaries ). 7