Cy Pres & Residual Fund Awards

Land of Lincoln Legal Aid is an ideal recipient for residual funds because it directly advances the core purpose of most class actions: ensuring access to justice.

When unclaimed settlement funds are directed to Land of Lincoln, they help provide critical legal services to people who otherwise could not afford representation. This means the funds continue to serve the class’s broader interests – promoting fairness, accountability, and the rule of law – while continuing to ensure that individuals can access justice.

(735 ILCS 5/2-807)

Illinois law provides a framework for the distribution of residual funds in state court class actions. When settlement funds remain after distribution to class members, courts may designate qualified nonprofit organizations that advance the public interest.

Directing residual funds to Land of Lincoln Legal Aid ensures that settlement dollars continue strengthening access to justice and serving Illinois communities.

Sample Illinois Residual Fund Provision

If, after distribution to the Settlement Class Members, any funds remain in the Settlement Fund due to uncashed checks, unclaimed funds, returned mail, or other administrative reasons, such remaining amounts shall constitute “Residual Funds” (also referred to as cy pres awards). Pursuant to 735 ILCS 5/2-807, the Court may direct that any Residual Funds be distributed to one or more eligible nonprofit organizations that advance the public interest.  The Parties agree that any Residual Funds remaining after the initial distribution and any subsequent redistribution, if applicable, shall be distributed to Land of Lincoln Legal Aid, subject to Court Approval.

Federal courts routinely approve cy pres distributions when further distribution to class members is no longer practical. Courts often consider whether the designated organization’s mission aligns with the purpose of the litigation.

Civil legal aid organizations, such as Land of Lincoln Legal Aid, are frequently approved recipients because they promote meaningful access to the courts and reinforce the integrity of the justice system.

Sample Federal Cy Pres Provision

In the event that any portion of the Settlement Fund remains after all reasonable efforts to distribute funds to Settlement Class Members, such remaining funds shall constitute Residual Funds (also referred to as cy pres awards). The Parties agree that any Residual Funds shall be distributed to Land of Lincoln Legal Aid, subject to Court approval. Distribution of Residual Funds in this manner ensures the Settlement Fun continues serving the public interest.

Courts may authorize distribution of remaining funds in bankruptcy and similar proceedings to public interest nonprofit organizations. When directed to Land of Lincoln Legal Aid, these awards promote fairness, access to justice, and public benefit throughout the community.

Sample Bankruptcy Residual Fund Provision

In the event funds remain after distribution to all eligible claimants and completion of the claims administration process, any remaining balance shall constitute Residual Funds. Upon motion and Court approval, such Residual Funds may be distributed to Land of Lincoln Legal Aid. Distribution of Residual Funds in this manner supports access to justice and serves the public interest consistent with the objectives of these proceedings.

To assist counsel and the Court, Land of Lincoln Legal Aid provides general sample provisions that may be adapted for use in settlement agreements or proposed orders involving residual funds (cy pres):

• Illinois State Court Residual Fund Provision – Word Download
• Federal Residual Fund Provision – Word Download
• Bankruptcy Residual Fund Provision – Word Download 

These templates are provided for general informational purposed only and should be reviewed and modified as appropriate to the specific circumstances of the case.