Goldman Sachs 2012 Annual Report Download - page 203

Notes to Consolidated Financial Statements
World Online Litigation. In March 2001, a Dutch
shareholders’ association initiated legal proceedings for an
unspecified amount of damages against GSI and others in
Amsterdam District Court in connection with the initial
public offering of World Online in March 2000, alleging
misstatements and omissions in the offering materials and
that the market was artificially inflated by improper public
statements and stabilization activities. Goldman Sachs and
ABN AMRO Rothschild served as joint global
coordinators of the approximately €2.9 billion offering.
GSI underwrote 20,268,846 shares and GS&Co.
underwrote 6,756,282 shares for a total offering price of
approximately €1.16 billion.
The district court rejected the claims against GSI and ABN
AMRO, but found World Online liable in an amount to be
determined. On appeal, the Netherlands Court of Appeals
affirmed in part and reversed in part the decision of the
district court, holding that certain of the alleged disclosure
deficiencies were actionable as to GSI and ABN AMRO.
On further appeal, the Netherlands Supreme Court
affirmed the rulings of the Court of Appeals, except that it
found certain additional aspects of the offering materials
actionable and held that individual investors could
potentially hold GSI and ABN AMRO responsible for
certain public statements and press releases by World
Online and its former CEO. The parties entered into a
definitive settlement agreement, dated July 15, 2011, and
GSI has paid the full amount of its contribution. In the first
quarter of 2012, GSI and ABN AMRO, on behalf of the
underwriting syndicate, entered into a settlement agreement
with respect to a claim filed by another shareholders’
association, and has paid the settlement amount in full.
Other shareholders have made demands for compensation
of alleged damages, and GSI and other syndicate members
are discussing the possibility of settlement with certain of
these shareholders.
Adelphia Communications Fraudulent Conveyance
Litigation. GS&Co. is named as a defendant in two
proceedings commenced in the U.S. Bankruptcy Court for
the Southern District of New York, one on July 6, 2003 by
a creditors committee, and the second on or about
July 31, 2003 by an equity committee of Adelphia
Communications, Inc. Those proceedings were
consolidated in a single amended complaint filed by the
Adelphia Recovery Trust on October 31, 2007. The
complaint seeks, among other things, to recover, as
fraudulent conveyances, approximately $62.9 million
allegedly paid to GS&Co. by Adelphia Communications,
Inc. and its affiliates in respect of margin calls made in the
ordinary course of business on accounts owned by members
of the family that formerly controlled Adelphia
Communications, Inc. The district court assumed
jurisdiction over the action and, on April 8, 2011, granted
GS&Co.’s motion for summary judgment. The plaintiff
appealed on May 6, 2011.
Specialist Matters. Spear, Leeds & Kellogg Specialists
LLC, Spear, Leeds & Kellogg, L.P. and Group Inc. are
among numerous defendants named in purported class
actions brought beginning in October 2003 on behalf of
investors in the U.S. District Court for the Southern District
of New York alleging violations of the federal securities
laws and state common law in connection with NYSE floor
specialist activities. On October 24, 2012, the parties
entered into a definitive settlement agreement, subject to
court approval. The firm has reserved the full amount of its
proposed contribution to the settlement.
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