$79.75 million recovery for class of United States investors in Philip Services Corp. securities

Case Abstract
On March 19, 2007, the United States District Court for the Southern District of New York approved a $79.75 million settlement of a class action, in which Lowey Dannenberg's Neil Selinger served as lead counsel on behalf of United States investors of Philip Services Corp., a bankrupt Canadian resource recovery company. In Re Philip Services Corp. Securities Litigation, C.A. Nos. 98-cv-835, MDL 1230 (S.D.N.Y.).

Client
class of United States investors in Philip Services Corp. securities

Case Name
DiRienzo v. Philip Services Corp., 294 F.3d 21 (2d Cir.), cert. denied, 123 S.Ct. 556 (2002).

Result
$79.75 million recovery.

Case Details
Representing a class of United States based investors, Lowey Dannenberg brought suit against the officers and directors of Philip Services Corp., a Canadian resource recovery company that traded on the New York Stock Exchange from 1996 to 1998; a group of U.S.-based investment firms that acted as underwriters of Philip’s secondary offering in the fall of 1997; and Philip’s former auditors, Deloitte & Touche, LLP. The case alleged accounting fraud having to do with Philip’s false financial statements, including overstatement of the firm’s copper inventory.

Pursuant to the terms fo the settlement, Deloitte & Touche will pay $50.5 million, which is believed to be the largest recovery from a Canadian auditing firm in a securities class action, and is among the largest settlements obtained from any accounting firm.

In a precedent making ruling early in the case, the Second Circuit Court of Appeals clarified the principles involved in determining when United States citizens can sue foreign companies that fraudulently sell their securities in the United States. DiRienzo v. Philip Services Corp., 294 F.3d 21 (2d Cir.), cert. denied, 123 S.Ct. 556 (2002).