CALCULATING RECOGNIZED LOSS

Plan of Allocation Defined

A plan of allocation for a settlement contains the rules for determining each claim’s economic or recognized loss. These rules are derived from a lengthy litigation process and often are extremely complex. Specialized knowledge and experience are generally requisite to comprehend how settlement rules impact claims awards.

Recognized Loss Defined

Recognized loss is a claimant’s loss as defined by a plan of allocation. Recognized loss represents the true value of a claim and is the dollar amount used by a claims administrator to calculate the pro-rata award for each claim. A recognized loss may or many not correspond to a “market loss” in the real world.

Importance of Calculating Recognized Loss

Institutional investors require accurate and reliable calculations of dividend values on portfolio holdings. The same sensibility applies to the calculation of the value of a settlement claim.

Advantages of Calculating Recognized Loss

• Knowing a precise value of a claim before filing
• Confirmation of loss with the claims administrator
• Authoritative and efficient responses to any deficiency or rejection notices
• Authoritative and efficient challenges to award amounts that do not match your recognized loss calculation
• Ability to confirm the accuracy of distributed awards

Disadvantages and Potential Errors Without Calculating Recognized Loss

• Unverifiable reliance on the calculations of a claims administrator
• Unsupportable and inefficient challenges to deficiencies and rejections
• Transactions dropped such as delivery and receipts, canceled and re-billed, or done-away versus in-system
• Improper treatment of anomalous and complex trades such as warrants and option exercisings
• Trades falling outside day’s highs and lows without proper explanations
• Ultimately: Less than maximum awards

How Battea Calculates Recognized Loss

Battea’s experts have meticulously coded the plan of allocation rules from over seven hundred settlements into The Claims Engine®, a powerful, proprietary, end-to-end processing system. The Claims Engine® has been tested over twelve years and 300,000 claims.

After a client’s transactional history is loaded, The Claims Engine® compares that data to the universe of current settlements and accurately calculates the recognized loss for each eligible claim. The Claims Engine® then produces a detailed substantiation of these calculations. Battea’s processing specialists review the loss reports with the claims administrators. Any potential issues or questions are researched and corrected BEFORE the claims are filed.

Upon the announcement by the claims administrator of the pro ration for the settlement, The Claims Engine® will calculate the exact dollar award expected for each claim. This will be compared to the distributed award amounts. Any discrepancies will be challenged with the substantiated recognized loss calculations that were confirmed prior to the filing.

THE RESULT: Battea clients know the precise value of every claim and are confident they will receive the maximum award possible