Holocaust Survivor and Heir
Lawsuits to Recover Swiss Bank Deposits
(November 24, 1999)
Victims of Nazi persecution during the World War II era,
or their heirs, have long attempted to recover assets that were
deposited in Swiss banks to protect them from Nazi confiscation or that
were directed to Switzerland as property of the looting Nazi government.
Three class action lawsuits have been underway in federal district courts
seeking to force two Swiss banks that represent the majority of
deposit-taking activities of the 1930's and 1940's, Credit Suisse and Union
Bank of Switzerland (UBS), to disgorge these assets and to make
compensation. The cases involve complex legal questions that seemed
destined for long, costly, and contentious litigation. The confluence
of various factors—including documents rescued from shredding by an
employee of UBS and evidence that earlier searches by the Swiss banks for
dormant Nazi-era accounts had not been thorough—prompted certain U.S.
local and state authorities to threaten economic sanctions. In the wake of
all the adverse publicity and with the threat of economic sanctions by
various state and local governments, a settlement was reached on August 13,
1998, without a binding court decision. The court has scheduled a
hearing on November 29, 1999, on the issue of whether to accept the
settlement. The question of how the settlement funds are to allocated
will be decided after the court appointed Special Master, Judah Gribetz,
completes a process of notifying potential claimants worldwide and solicits
their proposals.
On October 18, 1996, a class action lawsuit was filed in
the United States District Court for the Eastern District of New York on
behalf of plaintiffs representing: (1) certain Swiss bank depositors,
and their heirs, who had made deposits during the World War II era
and had not been able to recover their assets; (2) the rightful owners, and
their heirs, of assets that the Nazis had looted; and (3) slave laborers,
and their heirs, who worked for German companies at no wages to avoid
concentration camps and death. Essentially, the plaintiffs claimed
that the Swiss banks "participated in a common scheme and course of
conduct to launder Nazi Regime money, as well as to fund and profit from
Nazi World War II atrocities...[and a pattern of] knowingly and/or
recklessly accepting looted or cloaked assets, of acting intentionally and
in concert to prevent the recovery of assets of forced slave laborers and
of other victims of the Nazi Regime."1
Included in the plaintiff's filings was a list of 7,000 names of persons
who, in 1962, had requested a search for assets in their families' names
that they presumably believed had been deposited with the banks. On
August 13, 1998, announcements were made by the representatives of the
plaintiffs and defendants that a settlement had been reached by which two
Swiss banks, Credit Suisse and UBS, agreed to pay $1.25 billion.
Terms of the settlement must be approved by Judge Edward Korman, of the
United States District Court for the Eastern District of New York in
Brooklyn, who has presided at the trial and settlement negotiations.
Since none of the contentious issues in the litigation have been decided by
the court, the settlement agreement will not dispose of questions as to
whether federal courts have jurisdiction over such claims; whether
sufficient evidence was assembled on any of the issues presented; or
whether the theory of liability is legally sustainable. Among
the factors thought to prompt the defendants to agree to a settlement were
the cost of protracted litigation, the prospect of adverse publicity, and
the threat of disinvestment in Swiss bank securities by various city and
state governmental authorities, including the Comptrollers of New York City
and New York State and the Treasurers of California and Pennsylvania.2
The settlement agreement provides for the settling of
the lawsuits against the Swiss banks and extinguishes all related claims of
the plaintiffs against those defendants. It provides for the payment
of $1.25 billion in four installments. The court has scheduled a November
29, 1999, hearing on the issue of accepting the settlement. The
question of how the settlement funds are to allocated or distributed will
be decided after the court appointed Special Master, Judah Gribetz,
completes a process of notifying potential claimants worldwide,
soliciting their proposals and comments. He will then draft a plan
and present it to the claimants for their comments before submitting it
to the court.
At a June 29, 1999, press conference in New York
City, the attorneys appointed by the court to represent the settlement
class announced that they were beginning a process to attempt to notify on
a worldwide basis all potential beneficiaries and elicit from them comments
on how to apply the settlement funds. They stressed that anyone who had
suffered in Nazi concentration camps or who has assets confiscated during
the Nazi regime should fill out the questionnaires being distributed by
them through various media. The questionnaires, the text of the settlement
agreement, information on how to apply for inclusion in the distribution of
settlement funds and how to comment on what should be done with the funds,
and an audio of the press conference can be found on the Internet at:
http://www.swissbankclaims.com. A toll-free telephone number has been
established to provide similar information: 1-888-635-5483. Any class
member who wishes to be excluded from the settlement should do so by
October 22.
Included on that Website is the following statement on
who may apply for inclusion in the settlement.
Four classes consist of "Victims or Targets of Nazi
Persecution" defined as any individual, business or group persecuted
or targeted for persecution by the Nazi Regime or its agents, because they
are or were believed to be Jewish, Romani, Jehovah's Witness, Homosexual or
Physically or Mentally Disabled or Handicapped and who:
-
Had assets (including such things as bank accounts,
securities and safe deposit box contents), on deposit in any
Swiss bank, investment fund, or other custodian prior to May 9, 1945
(Deposited Assets Class), OR
-
May have claims against private Swiss Entities relating
to assets that were looted or taken by the Nazi Regime, or relating to
"Cloaked Assets", which are assets disguised by a Swiss Entity
for the benefit of an Axis company, entity or person associated with the
Nazi Regime, between 1933 and 1946 (Looted Assets Class), OR
-
Performed slave labor for companies or other entities
that may have deposited the revenues or proceeds of that labor with or
transacted such revenue and proceeds through Swiss Entities (Slave
Labor Class I), OR
-
Unsuccessfully sought entry into Switzerland to avoid
Nazi persecution, or after gaining entry were deported or mistreated,
and may have related claims against any Swiss Entity (Refugee Class).
The fifth Settlement Class consists of all persons,
whether or not a Victim or Target of Nazi persecution as previously
defined, who were forced to perform slave labor in any facility or work
site, wherever located, that was owned, controlled or operated by any Swiss
company or other entity (Slave Labor Class II).
All five of these Settlement Classes include heirs,
successors, administrators, executors, affiliates and assigns of the
persons or entities described above.
*Prepared by M. Maureen
Murphy, Legislative Attorney, American Law Division. See CRS Report
98-699 A, updated August 12, 1999.
1"International
Law--Class Action Filed Against Swiss Banks for Witholding Illegal Nazi
Assets," Cohen, Milstein, Hausfeld & Toll's E-journal (http://www.cmht.com/cwswgld.htm).
Cohen, Milstein, Hausfeld & Toll is one of the firms representing the
plaintiffs. Similar allegations are made in a suit against
Deutsche Bank, Dresdner Bank, and German Banking Institutions # 1 - 100, in
an action brought in U.S. District Court for the Southern District of New
York, filed on June 3, 1998. There is also a class action lawsuit
brought by Holocaust victims and their heirs against various European
insurance companies that wrote life and annuity policies in pre-World War
II Europe. One of the companies, Assicurazioni Generali, an Italian
firm, is reported to be in the process of agreeing to a settlement by which
it will pay $100 million and turn over documents and information that are
expected to be useful with respect to the claims against the other
defendant European insurance companies. These documents purportedly
"detail how the Nazis liquidated the policies of Jews who were sent to
death camps, how they funneled the money to Deutsche Bank, Dresdner Bank
and other banks and how, after the war, the Italian Government made
payments to Generali and other Italian insurers that the companies kept
without telling policyholders." David Cay Johnston, "Italian
Insurer Agrees to Pay $100 Million in Holocaust Suit," New York Times
A8, col. 5 (August 20, 1998). Assicurazioni Generali maintains that
the $100 million represents what it received from Communist governments
that seized its assets and that the bulk of the claims against it,
therefore, should be directed to the companies that succeeded, under the
Communists, to these assets.
2Credit Suisse Group,
"US class actions: banks reach settlement," (August 12/13 1998)
(http://www.csg.ch/news/980813-e.html).
Source: Congressional Research Service of the Library of Congress for the U.S. House
International Relations Committee.
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