Parties who do not include terms in the settlement agreement providing for the disbursement or reversion of unused funds can find themselves back before the court having waived any interest in the remainder of the settlement fund. For instance, in Powell v. Georgia- Pacific Corp.,
the parties had settled an employment discrimination class action but their agreement was silent about what was to be done with any unclaimed portion of the settlement fund. 843 F. Supp. at 495. Following the claims period, and more than five years after the last distribution from the settlement funds had been made, the plaintiffs filed a motion to distribute the remaining funds. The Powell
court was quick to point out that neither party negotiated a provision in the consent decree providing for the disbursement or reversion of funds to that party. As such, neither the plaintiffs nor the defendant had any legal right to the unclaimed funds. Id.; see also In re Folding Carton Antitrust Litig.,
744 F.2d 1252, 1254 (7th Cir. 1984) (neither plaintiff class nor settling defendants had right to excess settlement funds where no provision was made in the settlement agreement for the disposition of such funds); Schwartz,
362 F. Supp. 2d at 576 (defendant had no claim to a reversionary interest in residual settlement funds where settlement agreement failed to address issue of distribution of excess funds); SEC v. Golconda Mining Co.,
327 F. Supp. 257, 259 (S.D.N.Y. 1971) (same); 3 NEWBERG, supra
note 3, § 10.17 at 518.
After the plaintiffs in Powell
moved the court to distribute the remainder of the settlement to the class members who had filed claims, the defendant asked the court to instead distribute the money back to the defendant. Powell,
843 F. Supp. at 495. The Powell
court ultimately rejected both requests, reasoning:
We believe a reversion to the defendant or a distribution to identified class members is not appropriate in this case. No provision was made for the disposition of the remaining funds to either the class members or the defendant. . . The clear terms of the consent decree and other orders entered in this case lead the contemplated and in the court’s view would not be an equitable distribution of the remaining funds.