Category Archives: Settlement

Monster Worldwide, Inc. (NASDAQ: MNST), a New York-based online employment solutions company, has announced the preliminary settlement of the securities class action pending against it in the S.D.N.Y. The case, originally filed in March 2007, stems from allegations that Monster Worldwide and certain of its former executives failed to adhere to the company’s stated options granting practices, resulting in the issuance of false and misleading financial statements.

The settlement is for $47.5 million, including a $550,000 payment from Monster’s former Chief Executive Officer. The National Law Journal has an article on the settlement, which notes the recent decision in the case rejecting one of the proposed class representatives. Additional coverage can be found at Securities Litigation Watch, including a useful presentation tracking all of the options backdating class actions.

Coca-Cola Co. (NYSE: KO), the world’s largest manufacturer, distributor, and marketer of nonalcoholic beverages and syrups, has agreed to the preliminary settlement of the securities class action pending against it in the N.D. of Georgia. The long-running case, originally filed in October 2000, stems from allegations that company executives artificially boosted Coca-Cola’s revenues by forcing some of the company’s key bottlers to accept hundreds of millions of dollars of excessive beverage concentrate, and that the company falsely represented that the improved financial condition of its key bottlers would lead to substantial revenue growth. The settlement is for $137.5 million.

Earlier this year, The 10b-5 Daily reported that the plaintiffs’ motion for class certification had been assigned to a special master, who recommended that the court deny class certification because of concerns that plaintiffs’ lead counsel had engaged in improper conduct when it paid a former Coca-Cola employee to provide the plaintiffs with stolen company documents. The court appears to have rejected the special master’s recommendation in conjunction with its preliminary approval of the settlement.

UnitedHealth Group, Inc. (NYSE: UNH), a Minnesota-based diversified health and well-being company, has announced the preliminary settlement of the securities class action pending against it in the D. of Minn. The case, originally filed in 2006, stems from allegations that UnitedHealth misrepresented and omitted material facts regarding its stock options backdating practices.

The settlement is for $895 million and will fully resolve all claims against the company and its current officers and directors. The WSJ Law Blog has a post on the settlement and notes that it is by far the largest options backdating class action settlement to date.

Brocade Communications Systems, Inc. (NASDAQ: BRCD), a California-based data center networking and services company, has announced the preliminary settlement of the securities class action pending against the company in the N.D. of California. The case, originally filed in May 2005, stems from allegations that Brocade failed to correctly account for its stock-based compensation.

The settlement is for $160 million. The WSJ Law Blog has extensive coverage of the settlement, including relevant links.

The Cardinal Health securities class action is the case that keeps on giving, at least as far as this blog is concerned. Having previously posted about the lead plaintiff, discovery stay, motion to dismiss, settlement, and attorneys’ fees decisions in the case, it seems appropriate to note the latest offering from the court.

In In re Cardinal Health, Inc. Sec. Litig., 2008 WL 1934162 (S.D. Ohio May 5, 2008), the court considered whether two of the several fees objectors should be paid for their efforts. Although lead counsel had requested 24% of the settlement (or $145 million), the court awarded only 18% of the settlement (or $108 million). Based on this $37 million savings, the two objectors requested that they, in turn, be paid between $3.7 million and $6.6 million. The court was not amused, finding that the objectors were making “outlandish fee requests in return for doing virtually nothing.”

Holding: Motions for attorneys’ fees denied.

Quote of note: “[C]lass actions also attract those in the legal profession who subsist primarily off of the skill and labor of, to say nothing of the risk borne by, more capable attorneys. These are the opportunistic objectors. Although they contribute nothing to the class, they object to the settlement, thereby obstructing payment to lead counsel or the class in the hope that lead plaintiff will pay them to go away. Unfortunately, the class-action kingdom has seen a Malthusian explosion of these opportunistic objectors, which now seem to accompany every major securities litigation. Such is the case here.”

Converium Holding AG, a Zurich-based international reinsurer acquired by SCOR in August 2007, has announced the preliminary settlement of the securities class action pending against the company in the Southern District of New York (S.D.N.Y.). The case, originally filed in October 2004, stems from allegations that executives at Converium artificially inflated the price of Converium’s stock by failing to disclose to the public certain deficiencies in the company’s loss reserves. The case in the S.D.N.Y. is limited to U.S. invesotrs. Converium has agreed to settle those claims, as well any claims by non-U.S. investors, for an aggregate amount of $114.5 million (74 million EUR). The claims by non-U.S. investors will be settled in a court proceeding in the Netherlands, apparently following in the footsteps of a similar settlement entered into by Royal Dutch Shell last year.

Parmalat S.p.A., a producer and distributor of dairy products and fruit-based beverages based in Milan, Italy, has announced the preliminary settlement of the securities class action pending against the company in the S.D. of New York. The case, originally filed in January 2004, stems from allegations that Parmalat and its bankers, lawyers, and auditors engaged in a massive and complex scheme to overstate Parmalat’s assets and profits for more than a decade. Under the terms of the settlement, Parmalat will issue to class members 10.5 million shares of stock, valued at approximately $37 million at the current market price.

The 10b-5 Daily has frequently posted about the Parmalat case, especially on the issue of scheme liability. But it all started with a post in 2004 entitled “You’re No Martha.”

Biovail Corporation (NYSE: BVF and TSX: BVF), an Ontario-based specialty pharmaceutical company, has announced the tentative settlement of the securities class action pending against the company in Ontario Superior Court. The case, originally filed in September 2005, relies on the same factual basis as an earlier class action brought by U.S. plaintiffs and stems from allegations that Biovail made false financial projections.

The settlement agreement provides for the plaintiffs in the Canadian suit to share in the $138 million settlement already agreed upon in the U.S. securities class action. The 10b-5 Daily has posted previously on the settlement of the U.S. case and the company’s attempt to sue short sellers of its stock. Press coverage of the Canadian settlement can be found in the The Globe and Mail.

Xerox Corp. (NYSE: XRX), a Connecticut-based provider of document management technology and services, has announced the preliminary settlement of the securities class action pending against it in the D. of Conn. The case, originally filed in August 2000, stems from allegations that Xerox improperly accounted for its leasing of copiers and other equipment to customers. Xerox eventually engaged in a significant financial restatement.

The settlement is for $750 million, of which Xerox will pay $670 million and KMPG, who audited the company’s financial statements, will pay $80 million. Xerox expects to pay its portion of the settlement in five installments over the course of this year. The New York Times and The Wall Street Journal had articles about the settlement in their Friday editions.

United Rentals, Inc. (NYSE: URI), a Connecticut-based equipment rental company, has announced the preliminary settlement of the securities class action pending against it in the D. of Conn. The case, originally filed following the August 2004 disclosure of a SEC inquiry, stems from allegations that the company manipulated the company’s publicly-released financial data through improper accounting practices. The settlement is for $27.5 million and is contingent upon United Rentals and its insurers finalizing agreements on the portion of the settlement to be funded by the insurers.