Class Action Lawsuit
Lenders Loose Three Purses In 2nd Round AttemptCourtroom action resumed on September 15, 2009. Among items on the docket was the renewed cry of "your honor, we're not really in this" by three members on Prosper's Board of Directors. Judge Richard Kramer agreed and told the disenfranchised lenders they will have to proceed without these three. The "Demurrer to 2nd Amended Complaint is sustained without leave to ammend." This was a swing and a miss for the lenders who hoped to ensnare the personal wallets of the three directors who, ostensibly, have rather deep pockets. The well at Prosper itself is nearly dry.
The actual lenders bringing the complaint apparently addressed the judge during the session since "case management statements" were filed by both. Little other concrete information about the session was immediately made public. Class Certification of the complaint was not announced. It is unclear if the pleading stage has concluded and we have sought clarity on matters going forward from
Green Welling.
The lawsuit continues to seek class certification, asks damages against Prosper and its four major players individually:
- Christian A. Larsen, Chief Executive Officer, President and Director
- Edward A. Giedgowd, former Secretary, Chief Compliance Officer and General Counsel (departed at the close of August, 2009)
- Kirk T. Inglis, Chief Financial Officer
- Douglas Neal Fuller, Vice President of Operations
The suit continues to call for treble damages against Prosper and the award of attorney's fees, experts' fees and costs over and above the return of lender's capital with interest.
• Next court date: October 29, 2009 - Case management conference with (at least) more paper shuffling continues
• 1st Anniversary: November 26, 2008 - Initial pleading vs Prosper was filed by the disenfranchised lenders
definition PLEADING STAGE: The first stage in any lawsuit. A plaintiff initiates the lawsuit by filing a pleading, usually called a "complaint." The defendant then responds with their pleading, usually called the "answer."
Historically Pleadings have functioned to: 1) give notice of the nature of a claim; 2) set forth the facts; 3) narrow the issues; 4) dispose of sham claims and silly defenses. Unlike common law forms, today's pleadings cannot continue indefinitely but in California they retain the vestiges of denial, avoidance, and demurrer to narrow the issues on which the case will be tried.
definition CLASS CERTIFICATION: The point in proceedings at which time it's not just two guys, the judge, and Prosper anymore. All Prosper lenders become collectively involved. In some cases an individual who wishes to be affected by a class action outcome must "opt-in" to be included. In the case of 'Lenders vs Prosper' it is more likely a lender who does not want to participate will need to "opt-out" since all parties are known. If and when the time comes, every Prosper lender registered prior to October 15, 2008 will be notified and have ample opportunity to review the terms of settlement and decide. A decision will be asked. If the lender takes no action it is likely he/she will be required to abide the terms, whatever they may be.
definition TREBEL DAMAGES: Essentially an award for pain and suffering to those who have been harmed (the lenders).
