After the claims administrator has received and processed all claims made for the settlement, it will file an affidavit with the Court in support of the lead plaintiff attorney’s Motion to Distribute, illustrating the results of the claims filing processing and the plan for initial distribution. Once the Court approves the proposed Distribution Order, the claims administrator finalizes the percent of loss to be paid, known as the proration, and distributes the awards due to individual claimants. The case is terminated after the entire settlement fund is distributed.
In a perfect world, the case would be closed after the first distribution. However, most settlements have secondary, and in some cases, tertiary distributions. In the larger and more complex cases, the Distribution Order may direct the Claims Administrator to hold back a portion of the settlement fund(s) for various contingencies (which may include, but are not limited to, consideration of corrected and/or late claims). This is often referred to as a “reserve” and occurs prior to the initial distribution. Secondary and tertiary payouts distribute the remaining settlement funds among all eligible claimants.