Category Archives: Settlement

The Financial Times has a story on the dispute between the lead plaintiffs in the Halliburton securities class action. As previously noted in The 10b-5 Daily, Halliburton Company announced at the end of May that it had agreed to a $6 million settlement.

In a remarkable development, however, Scott + Scott (which represents one of the four lead plaintiffs) has refused to sign onto the settlement and is attempting to have Schiffrin & Barroway removed as lead counsel in the case. Scott + Scott claims that Schiffrin “did not convene a single meeting of the lead plaintiffs, refused to give other firms evidence it had investigated the charges, and then settled the case for $6m, even though some have estimated the damages as high as $6.8bn.” There is also some controversy over why Vice President Dick Cheney, the CEO of Halliburton during some of the class period, was not named as a defendant.

The court has scheduled a hearing for August 25.

FTD, Inc. (Nasdaq: FTDI) has sent itself a bunch of flowers with the announcement that it is settling the securities class action against the company for $10.7 million in stock. The case was related to the company’s 2002 FTD.com merger.

J.P. Morgan Chase & Co. and Citigroup, Inc have agreed to pay $305 million in fines to the SEC and the Manhatten district attorney’s office to settle charges that they helped Enron hide billions of dollars worth of loans. The Washington Post ran this story on the settlement in yesterday’s edition.

Quote of note: “‘The shareholders’ claim is that the various banks, including these two, were doing exactly what the SEC says they were doing in this action,'” [Professor Henry T.C. Hu, a law professor at the University of Texas] said. “‘The banks are not paying this amount of money for charity purposes; it is not chump change. It tends to give credence to the shareholder allegations. . . . This settlement, complete with the SEC’s harsh language, will be materially helpful to the massive shareholder lawsuit.'”

Quote of note II: “Under today’s settlement with the SEC and the district attorney, $236 million will eventually be distributed to ‘victims’ of Enron’s fraud. Exactly who will be eligible for restitution has not been determined.”

The Associated Press reports that Green Tree Financial Corp. has settled the securities class action against the company that has been ongoing since 1998. The suit alleged that the company and its officers engaged in fradulent accounting practices to artificially inflate its stock price and increase the CEO’s compensation. The preliminary settlement is for $12.5 million, which will be paid by the company’s D&O insurer.

Note that this suit led to the 8th Circuit’s seminal decision interpreting the scienter pleading requirements of the Reform Act: Florida State Board of Admin. v. Green Tree Financial Corp. (8th Cir. 2001).

Nanonphase Technologies Corp. (Nasdaq: NANX) and Cutter & Buck Inc. (Nasdaq: CBUK) have agreed to settle the securities class actions pending against them.

Nanophase will pay $2.5 million to settle claims arising from the Company’s public disclosures in 2001 regarding its dealings with Celox, a British customer.

Cutter & Buck will pay $4 million in cash, plus an additional $3 million based on a formula applied to any recovery of funds from its ongoing suit against its D&O insurer (who has evidently sought to rescind its policy). The settlement also covers a separate derivative suit and includes the implementation of certain corporate governance policies.

As discussed in The 10b-5 Daily here, KPMG has settled its portion of the Rite-Aid Corp. securities class action. The Legal Intelligencer has an article summarizing the case’s history and the final numbers on the settlements. (Thanks to the Securities Law Beacon for the link.)

Quote of note: “With settlements totaling more than $334 million and attorney fees of about $83 million, the class action shareholders’ suit filed in the wake of an accounting scandal at Rite Aid Corp. now ranks among the nation’s five largest shareholder settlements ever.”