Welsh & Forbes, Inc. v. Cendant Corp.

Opinions of the United

2000 Decisions States Court of Appeals

for the Third Circuit

12-13-2000

In Re: Cendant Corp.

Precedential or Non-Precedential:

Docket 00-5198

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Filed December 13, 2000

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

No. 00-5198

In Re: Cendant Corporation PRIDES Litigation

WELCH & FORBES, INC., an institutional investment

manager, individually and on behalf of all others similarly

situated

v.

CENDANT CORPORATION; MERRILL LYNCH & CO.;

CHASE SECURITIES, INC.; HENRY R. SILVERMAN;

WALTER A. FORBES; COSMO CORIGLIANO

SANTANDER MERCHANT BANK LIMITED,

(Pursuant to Rule 12(a), F.R.A.P.)

Appellant

Appeal from the United States District Court

for the District of New Jersey

(D.C. Civ. No. 98-cv-02819)

District Judge: Honorable William H. W alls

Argued

October 25, 2000

Before: BECKER, Chief Judge, and MANSMANN and

FUENTES, Circuit Judges.

(Filed: December 13, 2000)

Kathryn A. McDonald, Esquire

(Argued)

Jayne S. Robinson, Esquire

Robinson, Murphy & McDonald

100 Park Avenue

New York, NY 10017

Paul J. Dillon, Esquire

Bloom, Rubinstein, Karinja & Dillon

70 South Orange Avenue

Suite 215

Livingston, NJ 07039

Counsel for Appellant

Michael M. Rosenbaum, Esquire

(Argued)

Carl Greenberg, Esquire

Budd, Larner, Gross, Rosenbaum,

Greenberg & Sade

150 John F. Kennedy Parkway

CN 1000

Short Hills, NY 07078-0999

Samuel Kadet, Esq.

Skadden, Arps, Slate, Meagher

& Flom

Four Times Square

New York, NY 10036

Counsel for Appellee

Cendant Corporation

Roger W. Kirby, Esq.

Kirby, McInerney & Squire

830 Third Avenue

10th Floor

New York, NY 10022

Counsel for Appellee

Welsch & Forbes, Inc.

2

OPINION OF THE COURT

MANSMANN, Circuit Judge.

Santander Merchant Bank Limited appeals the District

Court's denial of its Fed. R. Civ. P. 60(b) motion for

reconsideration of the final judgment that excluded

Santander from the settlement of the underlying securities

fraud action brought by investors against Cendant.

Specifically, Santander claims that the District Court erred

in failing to apply correctly the standar ds for determining

"excusable neglect" in denying Santander's pr oof of claim

which was mailed three days late.

Cendant counters Santander's appeal on numer ous

grounds, only one of which is left to us to consider in this

appeal, the other claims having been resolved against

Cendant in our opinion in a related case, In re Cendant

Corporation Prides Litigation, No. 00-5199, slip op. (3d Cir.

Nov. ___, 2000).1 Cendant's sole remaining counter-

argument is that the District Court pr operly denied

Santander the ability to participate in the settlement

because Santander failed to demonstrate "excusable

neglect." On the facts before us, we find that the District

Court's decision in concluding that Santander did not

demonstrate that excusable neglect caused the delay was

not consistent with the sound exercise of its discretion. We

will, therefore, reverse.

Because related litigation is already the subject of at least

three published opinions, each exhaustively setting forth

the procedural and factual background, we will not do so

here, but instead refer interested parties to these prior

_________________________________________________________________

1. In 00-5199, we concluded that the District Court had the power to

extend the deadlines stipulated in the Settlement and had retained the

discretion to allow late-filed and late-cur ed claims. Equally applicable

here (though that case involved Fed. R. Civ. P . 6(b)(2) and this case

involves Fed. R. Civ. P. 60(b)) is our second conclusion in 00-5199 that

the appropriate standard under which to evaluate requests to allow tardy

proofs of claim or requests to cur e is "excusable neglect."

3

dispositions.2 We set forth only those facts crucial to a

resolution of the disputes here.3

I.

This appeal is one of several which arise out of the large

securities fraud class action (Cendant PRIDES litigation)

involving Cendant and its former officers. In June 1999, the

District Court approved a $340 million settlement of the

Cendant PRIDES class action litigation. Under the terms of

the Stipulation of Agreement of Settlement and

Compromise (the "Stipulation"), Cendant agreed to

distribute one Right, with a theoretical value of $11.71, for

each PRIDES owned as of the close of business on April 15,

1998. See also In re Cendant Corp. Prides Litig., 51 F.Supp.

2d at 539-40.4 To collect the Rights each PRIDES owner

was required to submit a valid proof of claim by June 18,

1999. Under the terms of the Settlement Hearing Order, a

settlement administrator, Valley For ge Administrative

Services, was to verify the proofs of claim. The Rights,

which are publicly traded, expire on February 14, 2001,

when, in combination with the current PRIDES, they will be

exchanged for new PRIDES.

Class members who wished to participate in the

settlement were asked to submit a completed pr oof of claim

form by prepaid first class mail postmarked on or before

June 18, 1999, addressed to the administrator as set forth

in the notice. The class notice further provided that proofs

_________________________________________________________________

2. In re Cendant Corp. Litig., 182F.R.D. 144 (D.N.J. 1998), In re Cendant

Corp. Prides Litig., 51 F.Supp. 2d 537 (D.N.J. 199), and In re Cendant

Corp. Prides Litig., 189 F.R. D. 321 (D.N.J. 1999), provide a full factual

and procedural history of this litigation.

3. Bearing in mind the expedited nature of this appeal, for our recitation

of the pertinent historical facts we have relied heavily upon the

appellant's brief. These facts are of r ecord, and for the most part, not

disputed by the parties.

4. PRIDES are a particular category of Cendant Security. Cendant agreed

to issue two New Income Prides or two New Gr owth Prides to any person

who delivered to Cendant three Rights, together with existing Income or

Growth Prides, respectively, befor e the expiration of the close of

business

on February 14, 2001, unless the Prides are amended. Id.

4

of claim would be deemed to have been filed when posted,

if mailed by first class mail or air mail, postage prepaid,

and addressed in accordance with the instructions given;

proofs of claim filed otherwise would be deemed to have

been filed when actually received by the administrator.

The record in this case shows that on June 16, 1999, two

days before the mailing deadline, Douglas Pr eston, the

General Counsel and Chief Compliance Officer of Santander

Investment Securities, Inc., finalized a pr oof of claim form

on behalf of appellant Santander Merchant Bank for

301,400 PRIDES (worth, at the $11.71 settlement value,

approximately $3.5 million). Preston delivered the proof of

claim form to his assistant, Iris Figuer oa, for mailing to the

administrator by postage pre-paid first class mail, certified

with return receipt requested. Preston saw Figueroa place

the completed proof of claim form in an envelope, address

the envelope as provided in the claim for m instructions and

affix a certified mail sticker to the package. Figueroa

delivered the envelope to Santander's mail department and

instructed the mailroom staff to mail the envelope

immediately by first class certified mail. A member of the

mailroom staff informed Figuer oa that he would take the

package to the post office that day, and Figuer oa reported

back to Preston that the package had been mailed. Thus,

Santander believed that its proof of claim for m had been

mailed on June 16, 1999, two days before the deadline.

Though unknown to Preston at the time, Santander's

proof of claim languished unattended in the mailroom for a

week.5 On June 23, 1999, a new outside manager arrived

to oversee and manage mailroom services. Upon his arrival,

the manager discovered a large quantity of undelivered

outgoing mail in the mailroom, including several pieces of

certified mail, which he processed. The pr oof of claim form

was apparently among the undelivered mail discovered on

June 23, 1999, and it was sent out that day. At this time,

apparently neither Preston nor the legal department knew

that a mailroom problem had occurr ed or had any

_________________________________________________________________

5. Though largely immaterial here, disgruntled mailroom employees may

have learned of their imminent replacement by an outside vendor and

purposefully sabotaged usual mailroom functions.

5

knowledge or notice that Santander's claim had not been

mailed on June 16.

On September 2, 1999, however, Santander r eceived a

letter from the administrator advising that its claim was

being denied because it had been "received by [the

administrator] after deadline for filing." That letter said

nothing about the claim being mailed or postmarked late.

Santander was advised by the administrator to write to the

Clerk of the Court explaining the reason for the delay.

Thus, when the administrator advised Santander in

writing that its claim had been rejected as untimely

because it had been received after June 18, 1999, Preston

believed that this was an administrative err or on the

administrator's part and that the error would be corrected

by the Court. Santander wrote to the Clerk of the Court,

explaining that the delay in receipt of the proof of claim may

have been occasioned by use of certified mail and that

Santander believed it had mailed the proof of claim on time

and that it had to explain late receipt , not late mailing.

On October 21, 1999, the District Court issued an

opinion and order denying Cendant's motion to disallow

late-filed proofs of claim and granting class plaintiffs' cross-

motion for enlargement of the time to file or to cure proofs

of claim. The District Court specifically found that an

enlargement of the time to file or corr ect proofs of claim

would not prejudice Cendant. The District Court extended

the deadline for submitting or curing deficiencies in proofs

of claim from June 18, 1999 to September 7, 1999,

required a showing of "excusable neglect" for any delay, and

directed lead counsel for the class to fur nish the District

Court with the reasons for delay advanced by r ejected

claimants. Apparently, Santander did not r eceive notice

regarding the Court's decision of October 21.

Despite not having received the notice, Santander wrote

to the Clerk of the Court, on November 22, 1999, to inquire

into the status of its claim. That letter reads in pertinent

part:

We are writing to request infor mation on the status of

our claim with regard to the above-r eferenced matter.

6

On September 2, 1999, we responded to a letter

received from Valley Forge Administrative Services, Inc.

whereby we affirmed that Santander Investment

Securities Inc., on behalf of Santander Merchant Bank,

Limited, had met the deadline for submission of its

Proof of Claim form.

Therefore, at this time, we would appr eciate receiving

information on the status of our claim.

If we do not hear from you within the next 20 days,

this confirms that our status in the claim has been

accepted.

This letter reflected Santander's understanding that it had

timely filed its claim. Santander did not r eceive any

response to its November 22 letter. 6

On January 14, 2000, the District Court denied

Santander's claim for being late with "insufficient reason for

delay." After receiving the District Court's decision on

January 21, 2000, Santander communicated with class

counsel and the administrator and asked to r eview the file

with respect to its claim. The administrator faxed a copy of

the postmarked envelope in which Santander's claim had

been sent. Thus, Santander learned that its pr oof of claim

form had been postmarked on June 23, 1999-- one week

after it had been delivered to the Mailr oom for mailing and

three business days after the original filing deadline.

Santander claims that this was the first notice that it had

that the proof of claim form had not been mailed on June

16, 1999. Preston thereafter investigated the reason for the

delay in mailing and learned that its own mailroom

"problem" caused the delay.

The District Court's final judgment was enter ed on

February 23, 2000. On March 16, 2000, thr ee weeks after

the District Court's entry of final judgment on Santander's

claim, Santander moved in the District Court that the

judgment be vacated under Rule 60(b) on the gr ounds of

"excusable neglect." Santander had only discovered in late

_________________________________________________________________

6. Santander's letter was actually docketed with a notation reading "Copy

to Chambers," and the District Court indicated at later oral argument

that it was aware of this letter at the time it was received.

7

January that the claim had been denied due to late mailing

rather than late receipt, and had set to work to determine

the cause of the late mailing and to try to r emedy the

rather severe situation which it faced, that is, being

excluded from the settlement. The Rule 60(b) motion cited,

inter alia, its mailroom sabotage and good faith efforts to

determine the origins of the delay. The District Court held

a hearing on March 17, the following day.

The District Court entered an order on Mar ch 21, 2000

denying Santander's claim "for the reasons stated at oral

argument," which had been held on Mar ch 17, 2000.

II.

On appeal, Santander challenges the District Court's

denial of its Rule 60(b) motion to permit it to participate in

the underlying settlement. Specifically, Santander asserts

on appeal that in refusing to excuse its thr ee-day delay in

the mailing of its proof of claim, the District Court failed to

apply properly the standards for deter mining "excusable

neglect" outlined in Pioneer Investment Services v.

Brunswick Assoc. Ltd. Ptrshp, 507 U.S. 380 (1993).7 Had

the District Court properly applied the law, insists

Santander, it would have excused the delay and permitted

Santander to participate in the settlement, based upon the

following factors, among others: the District Court's finding

of no prejudice to Cendant; the delay's de minimis length;

the delay's lack of impact on judicial proceedings;

Santander's diligent efforts to file on time, its reasonable

belief that it had done so, and its diligent ef forts to

follow up on its claim; the erroneous notice fr om the

Settlement Administrator that the claim had been received

late, rather than mailed/postmarked late; and Santander's

unchallenged good faith.

In response, Cendant maintains that the District Court

decisions here should be affirmed for several reasons

_________________________________________________________________

7. In light of our holding in this case in Santander's favor, we need not

reach Santander's additional contention that the District Court abused

its discretion by treating it less favorably than other similarly situated

class members.

8

including that at the time the District Court disallowed the

claim, the only excuse Santander provided was that

sometimes certified mail can be delayed in r eaching its

destination; Santander's "excusable neglect" theory was not

presented to the District Court at that time, and so should

now be deemed waived; Santander did not offer the

requisite "extraordinary circumstances" for Rule 60(b) relief

and in particular, did not take timely action to investigate

or explain the reason for its late proof of claim; and the

mailroom events plaguing Santander were unproved, and

even if they had been proved, they were Santander's own

responsibility. In sum, Cendant claims that"Santander

does no more than attack the District Court's decision as

inequitable," and asserts that Rule 60(b) r elief must be

grounded on extraordinary circumstances, and not "merely

because a movant . . . believes the . . . decision to be

unfair."

Our examination requires a two-part analysis: (1) for

purposes of the Rule 60(b) motion: whether Santander's

delay in bringing its "mail room sabotage" theory to the

District Court's attention was excusable; and (2) on the

"merits:" whether the "mail room sabotage" theory provides

a valid reason for its late submission of its Proof of Claim.

The first inquiry regards the District Court's denial of

Santander's Rule 60(b) motion for reconsideration of the

final judgment that excluded Santander from the

Settlement. We review the District Court's denial of the Rule

60(b) motion for abuse of discretion. In r e: O'Brien Envntl.

Energy, 188 F.3d 116, 122 (3d Cir . 1999). We have held as

to abuse of discretion, generally, that "an abuse of

discretion arises when the [D]istrict[C]ourt's decision rests

upon a clearly erroneous finding of fact, an errant

conclusion of law or an improper application of law to fact."

Oddi v. Ford Motor Co., 2000 WL 1517673, at *7 (3d Cir.

2000) (citation omitted). An abuse of discretion may also

occur "when no reasonable person would adopt the district

court's view." Id. Finally, "we will not interfere with the

[D]istrict [C]ourt's exercise of discretion unless there is a

definite and firm conviction that the court . . . committed

a clear error of judgment in the conclusion it reached upon

a weighing of the relevant factors." Id. If we conclude, as we

do, that the District Court's decision was not consistent

9

with the sound exercise of its discretion, the second

question arises: whether "excusable neglect" excuses

Santander's delay in submitting the proof of claims. This

involves a review of the matter de novo, applying the law to

the facts. Id.

A. The Rule 60(b) Motion

Our first inquiry is whether Santander's delay in bringing

its "mail room sabotage" theory to the District Court's

attention was excusable. We conclude that it is. Preston's

misunderstanding of the August 27th letter infor ming him

that the claim had been "received" late was understandable.

Santander's prompt response to the August 27th letter and

its initiative in sending another letter in November establish

that it was not derelict in discovering that its Proof of Claim

had been postmarked late.

Fed. R. Civ. P. 60(b) provides, in pertinent part:

Rule 60. Relief From Judgment or Or der

* * *

(b) Mistakes; Inadvertence; Excusable Neglect; Newly

Discovered Evidence; Fraud, Etc. On motion and upon

such terms as are just, the court may r elieve a party or

a party's legal representative fr om a final judgment,

order, or proceeding for the following reasons: (1)

mistake, inadvertence, surprise, or excusable neglect

. . . or (6) any other reason justifying r elief from the

operation of the judgment. The motion shall be made

within a reasonable time, and for reasons (1), (2), and

(3) not more than one year after the judgment, order,

or proceeding was entered or taken.

* * *

(Emphasis supplied).

In Pioneer Inv. Servs., supra, the Supreme Court

delineated the analysis required for afinding of "excusable

neglect" (made applicable to Rule 60(b) though Pioneer was

a bankruptcy case) and held that courts are per mitted,

where appropriate, to accept late filings even where caused

by inadvertence, mistake, or carelessness, as well as by

intervening circumstances beyond a party's control. At the

10

outset, the Supreme Court pronounced that the inquiry is

essentially equitable,8 and necessitates considering a

situation's totality:

Because Congress has provided no other guideposts for

determining what sorts of neglect will be considered

"excusable," we conclude that the deter mination is at

bottom an equitable one, taking account of all r elevant

circumstances surrounding the party's omission.

Id. at 395.

While "all relevant circumstances" are properly

considered, the Supreme Court specifically delineated four

factors:

These include . . . the danger of prejudice to the

debtor, the length of the delay and its potential impact

on judicial proceedings, the reason for the delay,

including whether it was within the reasonable control

of the movant, and whether the movant acted in good

faith.

Id. In the wake of Pioneer, we have imposed a duty of

explanation on District Courts when they conduct

"excusable neglect" analysis. In Chemetr on Corp. v. Jones,

72 F.3d 341 (3d Cir. 1995), we addr essed the Bankruptcy

Rule that permits courts to accept late-filed claims when

the late-filing was due to "excusable neglect." In Chemetron

we held that the bankruptcy court's "analysis failed to

adequately consider the totality of the circumstances

presented." Id. at 349. Specifically, we faulted the court for

failing "to make additional relevant factualfindings,

including the danger of prejudice to the debtor , the length

of the delay and its potential impact on judicial

proceedings, the reason for the delay, and whether the

movant acted in good faith." Id. at 350. The panel

_________________________________________________________________

8. In the culminating argument in its brief, Cendant claims that

"Santander does no more than attack the District Court's decision as

inequitable," and asserts that Rule 60(b) r elief must be grounded on

extraordinary circumstances and not "merely because a movant . . .

believes the . . . decision to be unfair." Rule 60(b) relief is designed

to

prevent such unfairness and precisely requires such an equitable

inquiry.

11

"remand[ed] the issue to the bankruptcy court, with

directions [to] undertake a more comprehensive and

thorough determination of whether the totality of the

circumstances support claimants' defense of`excusable

neglect.' " Id.; see also O'Brien , 188 F.3d at 127 (faulting a

district court for not making specific findings as to

prejudice).

In our view, the District Court's decision her e suffers

from the same defects identified in Chemetron and O'Brien.

On Santander's Rule 60(b) motion, the District Court

should properly have entertained an analysis of the factors

constituting "excusable neglect" to deter mine whether

Santander had met them. To fail to do so is a failure on the

part of the District Court to properly apply the law to the

facts of this case and provides grounds for reversal on the

basis of abuse of discretion. See O'Brien , 188 F.3d at 122

(abuse of discretion where ruling below founded on error of

law or misapplication of law to facts). Here, the District

Court did not apply the Supreme Court's enunciated factors

for "excusable neglect," even when Santander urged it to do

so at the oral argument. On March 21, 2000, the District

Court denied Santander's claim "for the r easons stated at

oral argument."

At the Rule 60(b) motion hearing, the District Court

declined to make a substantive analysis of the Pioneer

"excusable neglect" factors, and rather , encouraged

Santander to bring the case here, to the Court of Appeals.

The District Court expressed impatience with the delay in

Santander's bringing forth the mailroom debacle theory,

without considering Santander's good faith or possible

"excusable neglect" circumstances, stating that Santander

failed to "get[ ] off its corporate duff to make the claim that

you make now for excusable neglect." The District Court

seemed to further abdicate its responsibility to apply the

"excusable neglect" standard of Rule 60(b) when it

suggested that the mailroom debacle was not worthy of the

Court's consideration, particularly since Santander was

presumed to be a sophisticated litigant not r equiring

special protection:

Look, if you have inexperienced people handling a

million plus account, that's your problem, not mine.

12

[and]

That is not my problem, especially in this type of

litigation. This is not a case of orphans and widows.

This is a case of savvy . . . business investors. And if

you have some incompetent handling your books, that

is your problem and not the Court's.

Finally, the District Court concluded that

I haven't heard anything that has come close to

occupying the space that would be occupied by a

determination of excusable neglect . . . .[from the

attorney].

I appreciate [the attorney] comes in at the last moment

.. . . But, from September until now, and particularly

since the time of the Court's opinion on January 14th,

we have heard nothing that comes close fr om [the

attorney] to explain why we are now in March hearing

this plea, not only to extend time to appeal, but for

Santander to be excused from judgment. I see nothing

that would even qualify for excusable neglect under

any of the motions and therefore they ar e denied.

In short, we find that the District Court's statements at

oral argument do not satisfy the explanation r equirements

we mandated in Chemetron. In addition, we find that in

misapplying the Pioneer factors, the District Court did not

act in the sound exercise of its discretion.

B. Excusable Neglect Factors

We turn now to the applicable factors we delineated

above, applying them to the facts not in dispute or

controverted in the District Court.9

We find that the length of Santander's delays were

insignificant as a matter of law. We agr ee with Santander

that its "delay" in bringing the Rule 60(b) motion was three

weeks: the period between the time the District Court's

decision disallowing its claim became final, February 23,

_________________________________________________________________

9. We have accepted the uncontroverted affidavits of Preston and

Figueroa. Cendant does not challenge these except to assert that they

are unverified.

13

and the time it brought its Rule 60(b) motion, March 16.

Under O'Brien, "the length of the delay is considered in

absolute terms." O'Brien, 188 F .3d at 130. This delay was

trivial in light of the one-year outer limit for bringing a Rule

60(b) motion imposed by the Federal Rules of Civil

Procedure, and under O'Brien, in which we concluded that

a two-month delay was insignificant as a matter of law, see

id.

Similarly trivial was Santander's delay in filing its initial

Proof of Claim, five days or three business days, as

Santander prefers to characterize it: the period between the

original filing date, Friday, June 18, 1999 and the date the

claim was postmarked, Wednesday, June 23, 1999. We

agree with Santander that these few days could not have

had any real impact on the judicial proceedings.

The reason for the delay here was either unforeseeable

sabotage by mailroom employees who purposefully misled

Santander, or even more simply, a mailr oom which did not

operate as it should have in the ordinary course of business.10

Though the District Court dismissed this reason as

"internal to your organization," we have reaffirmed that in

Pioneer, the Supreme Court "explicitly rejected the

argument that excusable neglect applies only to those

situations where the failure to comply is a result of

circumstances beyond the [claimant's] r easonable control."

O'Brien, 188 F.3d at 125.

There is not any evidence that Santander acted in bad

faith, either in bringing its Rule 60(b) motion or in filing its

late claim. On the contrary, there is abundant evidence that

Santander acted with good faith throughout. Those

individuals directly responsible for the Santander claim,

Preston and Figueroa, were far fr om derelict in performing

_________________________________________________________________

10. Interestingly, in the course of the settlement litigation, the

District

Court did accept as valid both reasons similar to, and even those less

compelling, than Santander's. For example, in another claimant's case,

Mellon's delay in filing was excused because a clerk at Mellon who had

been ill and depressed for months was der elict in his duties. In

addition,

two other class members were excused due to mailroom problems: in

one case mail was handled "contrary to custom," and in the other, there

were problems in an internal corporate mailroom.

14

their duties. Santander's agents took steps to ensur e that

the proof of claim would be mailed out in a timely fashion,

and reasonably believed that it had. When err oneously

notified that the claim had been rejected due to late receipt,

Santander took whatever steps it could to investigate and to

mitigate damage to itself. A period ensued during which

Santander was "shut out" of communications to class

members, and upon learning very late in the game the true

reason for the denial, the late mailing, Santander acted

with reasonable haste to investigate the pr oblem and to

take available steps toward a remedy.

Finally, in terms of prejudice to Cendant, the District

Court found that Cendant would not suffer any prejudice

when the District Court extended the deadline fr om June

18 to September 7, 1999, after Santander's claim had been

mailed and received. The Court found that Cendant would

not be harmed because the original limits of Cendant's

financial obligation had not been expanded. Cendant's

argument that it is now prejudiced because the settlement

money which might now go to Santander will not be

"leftover" for Cendant to recoup is without merit.11 In truth,

since the only "prejudice" Cendant would suffer by being

forced to pay Santander is the "loss of a windfall," we

conclude that Cendant will suffer no pr ejudice at all. See

id. at 128.

III.

After a careful review of the recor d, we find that the

District Court's misapplication of the Pioneer factors in

denying Santander's Rule 60(b) motion to be beyond the

sound exercise of its discretion. W e further find that any

neglect by Santander in submitting its Proof of Claim form

late was "excusable neglect," justifying the allowance of its

claim to settlement participation. We thus r everse the

District Court's denial of Santander's claim on the basis of

_________________________________________________________________

11. See In re Cendant Corporation Prides Litigation, No. 00-5199, slip op.

(3d Cir. Nov. ___, 2000) for further discussion of the District Court's

finding that Cendant would not be prejudiced by a time extension.

15

delay and remand solely for inclusion in settlement

proceedings.

A True Copy:

Teste:

Clerk of the United States Court of Appeals

for the Third Circuit

16