The judge reserved for herself the right to review both the process and the result for fairness, after the fact. I think she has made it pretty clear that if there are problems with the conduct of the process or the result it delivers, she will do what she needs to do.
It is as much a problem for defendants as it is for unit holders that no one knows what the judge thinks it will take to have either the process be proper or a result be fair.
My opinion is that the trustee has a first obligation to unit holders to make best efforts to maximize value for unit holders... and that any process they engage that has any other function or purpose is by definition unfair, as well as other things. If, instead of best efforts to maximize benefits for unit holders, we see them working to minimize perceptions of value, in the market, or in the court room ? What does that say ?
Those are the sorts of things that you might consider in trying to handicap a result, while looking at her track record in prior cases...
I expect you might consider market context as a modifier, now, too, in making any effort like that in handicapping... given that no one is probably unaware of recent market history. A "pro-business" bias two years ago might have had some confused market actors leaning toward the Greenspanish extreme of expecting "rules don't matter" in markets... since correction of errors by the market is self limiting... an extreme in a gross error in philosophy which the big banks embraced at the core of their culture. That is still a problem for them now, and a problem, in being realized by others, which nearly destroyed our economy in the last two years. That market functions will, in time, correct error with destruction is not a reason to embrace making errors in order to be punished by them. If you destroy others ability to trust you, you will suffer from that... which isn't a statement that free markets require you destroy rather than create an ability to be trusted, whether by your actions, or by changing the rules.
Freedom is not "freedom from rules" but is instead the proper and strict imposition of the RIGHT rules. Now, having had market reality force realization of HOW stupid banks were being, we know AGAIN that "pro-business" requires a proper concern for the health of the regulatory environment in which business operates, and how there MUST be conflict between errors in culture and the letter of the law and in the rule of it when culture runs amok. Free markets don't exist without boundaries in the rule of law. Free markets require the RIGHT rules, rules that ensure contracts will be enforced, and that participants WILL live up to their specific contract commitments, AS WELL AS those they have by virtue of their agreement, as by market participation, to play by the rules that govern the market. Free markets DO work ONLY because the rules, and enforcement of them, allow trust to exist.
The first duty of the judge, is to the law... to that element of the context and culture of our system that enables both the law and markets to function as intended... because of our ability to have trust in them. Here, that means that when market actors posture to gain the benefit that accrues from having others trust them... they need to act in ways that justify that trust... and be punished for it when they do not... not ONLY by the market, but also by our rules that are designed to prevent making STUPID mistakes, and not only because the market will correct them when we are stupid enough to allow them. Otherwise, the result is subversive to the law, the markets, and the culture that allows freedom to exist.
There can be no allowance made for decision within the view of a cultural expectation that trust should be limited to a minimal level at which "buyer beware" matters more among market actors, as defacto limit in what you should expect in trust of others. They said, "trust us" but you should have known better ? Truth in advertising matters... in the product of the law, and in the product of trust in markets. Increasing sophistication isn't at all an adequate excuse for exception... rather than the opposite, given the nature of responsibility.
In their own interest, JPM should want a result here that proves, first, they can and should be trusted. To the degree they still see that the culture or the law is not requiring that of them ?
If the cynical view is adopted, in lieu of an expectation of the proper imposition of limits by the system... as when no boundaries exist to require trust can exist as a product of the system when promises are made meaningless, or when those boundaries exist, but are not taken seriously by those responsible for their defense...
Are the rules we have, and the system in the enforcement of them, sufficient to enable trust to exist ? SHOULD trust exist, given the failed culture of the market participants, and the failures of the system whose function is necessary to protect trust when the market participants fail in their obligations ?
THAT is on trial here, as much as the defendants themselves: strict adherence to the rules necessary for trust to exist, as opposed to a laizez faire exemption from any meaningful enforcement, that destroys the functions on which entire markets depend, and not just deals or businesses ?
The judge certainly CAN exercise judgment on those issues of fairness in a result. I expect she WILL do so with proper consideration of the context as well as the facts of the case. Big banks allowed the context generated by their own hubris to lead them astray in terms of expectations in what the rules are, or how they will be enforced ? Not MOSH unit holders problem.
When we have more for the judge to evaluate, I hope and expect a "pro business" ruling ... one which fully justifies market participants in having an ability to trust others, because it enforces a proper respect for those who do... in their expectations that an "interest in trust" will be seen as an obligation to others that comes before the self interest of the trustee.
I've made the point elsewhere that the judge is not constrained by the inputs made by defendants OR plaintiffs OR intervenors in determining for herself what is proper or fair. She obviously is aware, for instance, that there is likely to be a difference in price in any market, between a thing sold with best efforts to get the best price possible, and a thing sold without a proper effort to maximize anything other than the desire to be shed of the things being sold.
I think she is justified in expecting a business that is based on trust, will be held to a higher standard than a common market actor, including in their responsibility to the market as well as to their clients.
That she disagreed with intervenors (in terms of their wanting her to be over-ruling herself in disallowing the settlement from proceeding along to a sale of the properties) does NOT mean that she is unaware of their objections, or is discarding them wholesale in terms of what they mean and require OF a settlement, to have it be fair. She is allowing defendants to TRY to deliver a proper result, not saying that they have done so.
By allowing the settlement to proceed she is saying, about intervenors claims of fraud in the numbers, the extend of damages, etc., "Yeah, but... within the structure of the settlement they crafted, they CAN account for that value within the settlement by delivering a proper process and result".
The issue I see in the latest hearing is one of subject. The judge wasn't there to have the subject of her prior ruling be changed... which doesn't mean intervenors inputs don't matter in terms of having spoken to the value of what is being settled... and thus, what is FAIR in terms of a price for settling them.
The interlocutory seems to me that it is binding, now, in that it doesn't leave defendants as fully free to NOT settle as they were before the ruling... they are, at this point, more or less bound by the settlement contract and the judges ruling to try to make the settlement work with their best efforts ? They have an larger obligation, now... to meet their fiduciary responsibilities to unit holders, to live up to the settlement contract, to engage in market operations with best efforts on unit holders behalf, and with fair dealing, and in good faith... in regard to other market participants.
In terms of process and price... I think we see a multi-dimensional problem for defendants... the complexity of which I think they do not and will not fully appreciate.
There ARE many tools you can apply in valuation of various things... which might be applied by different market participants in different ways. Not all MUST value the same elements in or features of things the same way...
Defendants and plaintiffs can pretend whatever they want about what is being sold, or, what values attach to what features, or, in what is of value to them in what IS being sold in fact.
The judge has a LARGER responsibility than any other participant in this process... because she has a need for full awareness of all of those tools, functions, and all the elements in value of what is being sold, that may be seen by different actors in different ways... without deciding which one is "right"... as much as deciding, in the balance of the scales of justice, what is fair.
The result should justify our faith in the system... the legal system, and the system of laws that enables us to have a free market, because we can trust that others will live up to their obligations... rather than abuse our trust.
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