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Recognized Loss Calculation

In a securities class action settlement, the term “recognized loss” refers to the economic loss suffered by a claimant as defined by the settlement’s Plan of Allocation. Recognized loss represents the true value of a claim and is the specific number used by the claims administrator when calculating the pro-rata award amount for each claim. It may or may not correspond to an actual or market loss.

Battea processing specialists load clients’ transactional history into The Claims Engine®, Battea’s unique end-to-end processing system, that matches that data with all known current class action settlements and accurately calculates a recognized loss figure for each and every claim for which the client is eligible.

Because settlement distribution amounts are a prorated value of a client’s recognized loss, this recognized loss calculation is extremely important, since it serves as the basis for all settlement payouts and reconciliation of disbursed awards. It is essential to determine accurate recognized loss calculation to judge the overall accuracy of award payouts and validity of any claim rejections. Battea programs the individual Plans of Allocation from every case into The Claims Engine®, to ensure the accurate calculation of recognized loss from a client’s aggregate trading transactions.