Most great ideas are born out of need. Queens native David Isaac was a practicing class action lawyer buried in unending legal paperwork and administrative tasks. His wife, a bankruptcy attorney, experienced the same frustrations. That’s when inspiration struck.
Isaac realized that law firms, corporations, and other entities could pay third-party vendors to handle the burdensome paperwork, service, and distribution demands in connection with legal settlements and restructurings, enabling their employees to spend time on core business practices. He approached a bankruptcy services firm about expanding into class action administration and was hired on the spot. Three years later, Isaac joined The Garden City Group, Inc. (GCG). That was 1996. Under Isaac’s leadership as CEO, the company has since grown from 50 to 1,000 employees and now handles high-profile settlements, including some of the largest in US history.
Three decades since its inception in 1984, GCG is widely recognized as the leader in bankruptcy, class action, and mass tort legal services. Since becoming president in 2001, Isaac has worked to create a team capable of handling the voluminous and complex workload of each GCG case. “We work on cases both large and small, but the biggest ones can have millions of interested parties [class members or creditors],” he says. “Not all companies can reach that many people with fast and accurate information like we can.”
Before Isaac started in the industry, he was a legal administration services client. In fact, the same is true of the company’s president, COO, general counsel, and other senior managers. “In all of our markets, we have people who have been on the other side of the aisle buying the services we are selling,” says Isaac. “We understand what our clients need, and that’s a big driver of how we direct and manage our employees.” Those employees—software engineers, claims analysts, consultants, call center associates, and others—work in offices nationwide to remove the administrative burden from clients. They’ve been trained to use up-to-date technology to handle claimant inquiries and to process claims quickly while responding to clients’ needs.
At any given time, GCG has hundreds of cases pending. Isaac and his leadership team have hired specialists in areas like securities, legal notice, mass tort, and bankruptcy, and have project team leaders in several service lines who manage eight to ten associates. He’s directed human resources managers to hire a diverse group of people who can rotate effectively through projects of varying significance in different industries. Although GCG is perhaps most well-known in the legal space, the firm works for companies in other sectors. “We’re asked to help companies deal with large amounts of data,” Isaac says. “Whether they have millions of members in a class action settlement or a massive number of customers they want to reach for a different purpose, they come to us to take these matters off their plates.” GCG steps in, often in crisis moments, to manage processes, issue payments, distribute information, and perform other key tasks.
In class action cases, each member of the class has certain rights as laid out by the court. GCG’s clients are required to notify members of the claim, and those members may in turn participate or object. Recently, GCG sent out 68 million e-mails about a company that settled litigation. In that case, the firm deployed a highly trained IT team to ensure each message was sent without error.
Making millions of people across the nation aware of a settlement is challenging work. GCG’s staff scours data to find contact information for each member and then does what it can to reach each individual. The company sends notice packets, blasts e-mails, makes phone calls, places newspaper ads, designs web ads, and builds multilingual websites. Then, GCG reports its findings back to the court and the case moves on to claims and distribution before members of an approved settlement or creditors and other interested parties in a restructuring matter receive compensation administered by Isaac’s firm.
These capabilities are best seen in action. The following three cases demonstrate how GCG has successfully managed the complex settlements for its clients.
$3.4 BILLION AMERICAN INDIAN TRUST ADMINISTRATION
In 2009, the federal government announced an agreement to compensate individual American Indians for the government’s mismanagement of trust funds and other assets in what has been called the most intricate class action suit filed against the United States. The suit, filed in 1996 and litigated for thirteen years, centers around the handling of 56 million acres of American Indian trust land and the government’s leases for mining, agriculture, and other industries.
Revenue from those leases was supposed to go into individual Indian Money (IIM) accounts, but in the deal, the feds agreed to pay a total of $3.4 billion, with $1.5 billion going to accounting problems and revenue irregularities. The deal outlined that there were two classes who would receive payment. Each member of the first class would receive $1,000 for the government’s inability to render an accounting of funds in IIM accounts, while the rest of the money would be distributed to the second class, which included IIM account holders and trust or restricted land property owners. Nearly 500,000 individuals were class members entitled to payments.
The Department of Justice and the plaintiffs’ lead counsel retained GCG to manage the case’s administrative tasks. Isaac and his colleagues worked through old and poorly organized data to identify and notify as many class members as possible. They built a multilingual website, set up a mailing address and a post-office box, placed advertisements, held town-hall meetings throughout several states, participated in radio shows, made phone calls, and filled a call center with employees trained to answer questions, take complaints, and address concerns. Isaac said that although there were objections and appeals to the Court’s approval, they were finally allowed to move forward in 2012 and got payments out in just three months.
DEEPWATER HORIZON ECONOMIC SETTLEMENT PROGRAM
After the oil spill in the Gulf of Mexico in 2010, Kenneth Feinberg was appointed to manage the Gulf Coast Claims Facility. Feinberg then selected GCG, among others, to handle incoming claims, phone calls, and distributions for individuals seeking compensation for harm in numerous categories, including seafood compensation, business loss, and property damage. When BP agreed to settle litigation through a class action, the Gulf Coast Claims Facility was set aside in favor of the Deepwater Horizon Claims Center (DHCC). GCG continued to handle those tasks under this new claims administration program, which was managed by the court-appointed claims administrator, Patrick Juneau.
Due to the complex nature of the project and its large class size, GCG took some unusual steps that demonstrated the firm’s unique abilities. At the request of the parties, GCG secured office space in Louisiana and built a facility near New Orleans dedicated to handling a number of important DHCC tasks, including a dedicated call center.
GCG is also known for handling sizeable bankruptcy cases of national import. In 2009, GCG was retained as claims agent for the historic General Motors bankruptcy, which Isaac calls the most intense he’s ever experienced.
GCG worked to process information, field questions, docket claims, communicate with creditors, and perform other critical functions as quickly as possible. In 2011, GCG was retained as claims agent in the American Airlines bankruptcy, which lead to its merger with US Airways.
In all of these cases, Isaac says communication becomes critical. “Shareholders want to know what value their shares have, creditors want to know when they’ll be paid, and customers want to know what happens to frequent flier miles and other assets. Answering these questions accurately matters,” he explains. “We undertake this delicate and time-consuming task, as well as many others, so that our clients can get back to business.”
As the firm enters its fourth decade, Isaac is looking to broaden his scope beyond class action, mass actions, and bankruptcy. In the age of big data and analytics, an increasing number of clients are looking for an outside vendor to handle large pieces of information. Data breaches, for example, require companies to send information and communicate in large volumes. GCG is positioned to leverage its unique expertise as these and other new markets develop.