The opinion of the court was delivered by: Matthew F. Kennelly, District Judge
MEMORANDUM OPINION AND ORDER
Before the Court are motions to reconsider its ruling of November 14, 2007 that vacated the Court's preliminary certification of a settlement class led by Wilson and Christine Merchan and preliminary approval of the proposed settlement in the Merchans' lawsuit over a time share program operated by American Resorts International's Holiday Network. The Merchans and certain defendants have also moved the Court to reconsider its decision to abstain from exercising its jurisdiction and remand another, older case arising from the same alleged events-the Slodki class action-to the Circuit Court of Cook County, Illinois under a provision of the Class Action Fairness Act of 2005. For the reasons set forth below, the Court grants the motions to reconsider, but arrives at the same result it reached before, albeit for somewhat different reasons with regard to the preliminary certification / preliminary approval issue.
This litigation stems from the management of a time share program operated by American Resorts International's Holiday Network and its parent American Resorts International, Ltd. (for simplicity's sake, the Court refers to both entities as "ARI" except as otherwise noted). These are two separate lawsuits, which the Court consolidated for pretrial purposes in June 2007.
The first of the suits was filed in the Circuit Court of Cook County in 2002 by Alan H. Slodki, a member of ARI's time share program. Slodki sued over ARI's imposition of maintenance fees that he alleged breached his member contract. In February 2003, the state court certified a class composed of all current and former members of the time share program from whom ARI sought and collected maintenance fees and fees for certain service improvements ("the Slodki class"). ARI then asserted it could not repay the challenged fees unless it shut down the time share program or increased membership fees to cover the cost of a judgment, raising the prospect of a pyrrhic victory for the Slodki class. In response, theclass hired an accountant to review ARI's books. The accountant concluded that ARI's weak financial position was the result of mismanagement and diversions of ARI time share funds to related entities. The Slodki class sought the appointment of a receiver to take over ARI's affairs and eventually agreed to the appointment of a court advisor to "review, assess and report to the Court on the current financial and operational health of the Defendants and the Holiday Network Time Share Program." The advisor in turn had the court appoint Grant Thornton LLP, an accounting firm, to assist him. In the ensuing months, ARI refused to pay the Grant Thornton's invoices because it objected to the tone and findings of the firm's draft report to the court.
In May 2007, in response to the findings of its own accountant and Grant Thornton's, the Slodki class amended its complaint to add as defendants ARI's individual principals and certain entities controlled by them. The second amended complaint asserted fraudulent-transfer claims against these new defendants, allegedly worth $65 million. Availing themselves of the Class Action Fairness Act of 2005 (CAFA), see 28 U.S.C. §§ 1332(d)(2) & 1453, the defendants then removed the Slodki class action to this Court.
The second suit was filed in this Court in October 2005, by another ARI time share program member, Frank Kessler. Kessler alleged that ARI had violated the Illinois Consumer Fraud and Deceptive Business Practices Act, 815 ILCS 505/1 et seq., by losing ownership and control of a Caribbean resort and by assessing fees to which it was not entitled. Kessler's complaint also incorporated federal claims, since dismissed, against two debt collection agencies under the Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq., and Credit Repair Organizations Act, 15 U.S.C. § 1679 et seq.
In February 2006, Kessler filed an amended complaint adding the Merchans as plaintiffs. The Merchans, who had also been members of the ARI time share program, asserted claims against ARI under the Illinois statute on behalf of a class of "all current or former members of American Resorts International's Holiday network time share program from whom ARI and ARIHN assessed and collected maintenance fees and services fees from and including January 1, 1999 through the present."
In March 2007, ARI and the Merchans, as putative class representatives, executed a proposed settlement agreement. Under its terms, the putative class would release all claims against ARI and ARIHN and their directors, officers, employees, and agents, including all claims in the Slodki litigation. In exchange, class members would receive some mix of transferable "grants" entitling them to weeknight lodging and vouchers for meals, drinks, and spa treatments at ARI's two remaining resorts, which are in Austria. The Merchans each would receive a $5,000 incentive payment for representing the class, and their counsel would be paid a fee award of $90,000. ARI also made certain commitments regarding business practices it would follow in the future.
In May 2007, the Court granted the Merchans' motion for preliminary certification of the settlement class and preliminary approval of the settlement. The Slodki class action was removed to federal court the same month and, after the Court granted ARI's motion for a finding of relatedness, was reassigned to this Court, where the Court consolidated it with the Kessler / Merchan suit for pretrial purposes. The Slodki class then moved the Court to reconsider its ruling preliminarily certifying the Merchan class and approving the proposed class settlement in that case. The Slodki class also moved the Court to abstain from exercising jurisdiction over its case under 28 U.S.C. § 1332(d)(3).
B. The Court's November 14, 2007 Order
The Court granted both motions filed by the Slodki class in an order entered on November 14, 2007. The Court was persuaded by the Slodki class's argument that the Merchans did not meet the requirements of Federal Rule of Civil Procedure 23(a) to serve as class representatives or, in the alternative, could not assert class claims that competed with those of the certified Slodki class. The Court accordingly vacated its preliminary certification-which it noted had been tentative and thus subject to revision in light of the information cited by the Slodki class, Kessler v. Am. Resorts Int'l's Holiday Network, Ltd., Nos. 05 C 5944, 07 C 2439, 2007 WL 4105204, *7 (N.D. Ill. Nov. 14, 2007) (citing Mars Steel Corp. v. Cont'l Ill. Nat'l Bank and Trust Co. of Chi., 834 F.2d 677, 680 (7th Cir. 1987))-on the strength of the Slodki class's argument that the Merchans' own class definition meant that the Merchans either lacked the requisite injury and thus had no standing or were members of the Slodki class who were thus barred from bringing competing class claims. Id. at *8 (citing In re Bridgestone/Firestone, Inc., Tires Prods. Liab. Litig., 333 F.3d 763, 769 (7th Cir. 2003)).
In vacating its preliminary certification of the proposed settlement, the Court found that the proposed settlement's value was unreasonably low as compared with the potential value of the claims the class members would give up. Although counsel for the Slodki class had backed away from the assertion that its fraudulent transfer claims were worth $65 million, the Court took the view that these claims were not trivial. Their release for exclusively in-kind consideration, which would foreclose recovery in cash of sums that may have been transferred to related entities that are defendants in the consolidated case, was outside the range of possible approval and therefore failed to meet the applicable legal standard. Id. at *5-7 (citing Armstrong v. Bd. of Sch. Dirs. of City of Milwaukee, 616 F.2d 305, 314 (7th Cir. 1980), overruled on other grounds, Felzen v. Andreas, 134 F.3d 873 (7th Cir. 1998)). The Court applied to the proposed settlement ...