Popular Agrees to Settle Securities Class Action Lawsuits
January 27 2011 - 5:22PM
Business Wire
Popular, Inc. (Nasdaq: BPOP) announced today that it and the
other named defendants have entered into two memoranda of
understanding in connection with the settlement of five putative
securities class actions filed in the United States District Court
for the District of Puerto Rico and the Puerto Rico Court of First
Instance, San Juan Part. The five class actions were previously
consolidated into two separate actions: a securities class action
captioned Hoff v. Popular, Inc., et al. and an Employee Retirement
Income Security Act (ERISA) class action entitled In re Popular,
Inc. ERISA Litigation.
Under the terms of the first memorandum of understanding, which
related to the consolidated securities class action, subject to
certain customary conditions, including court approval of a final
settlement agreement, in consideration for the full settlement and
release of all defendants, the amount of $37.5 million will be paid
by or on behalf of the defendants (of which management expects
approximately $30 million will be covered by insurance). The
parties intend to file a stipulation of settlement and joint motion
for preliminary approval within 45 days of the execution of the
memorandum of understanding.
Under the terms of the second memorandum of understanding, which
related to the ERISA class action, subject to certain customary
conditions, including court approval of a final settlement
agreement, in consideration for the full settlement and release of
all defendants, the amount of $8.2 million will be paid by or on
behalf of the defendants (all of which management expects will be
covered by insurance). The parties intend to file a joint request
to approve the settlement.
Popular does not expect to record any material gain or loss as a
result of the settlements. Popular made no admission of liability
in connection with either settlement.
At this point, the settlement agreements are not final and are
subject to a number of future events, including approval of the
settlements by the relevant courts. There can be no assurances that
the settlements will be finalized or as to the timing of the
payments described above.
Two separate derivative claims filed in the United States
District Court for the District of Puerto Rico and the Puerto Rico
Court of First Instance, San Juan Part making claims similar to
those made in the settled cases were not included in the
settlements. In addition, the Corporation is aware that a suit
asserting similar claims on behalf of certain individual
shareholders under the federal securities laws was filed on January
18, 2011, but the defendants have not yet been served.
Founded in 1893, Popular, Inc. is the leading banking
institution by both assets and deposits in Puerto Rico and ranks
35th by assets among U.S. banks. In the United States, Popular has
established a community-banking franchise providing a broad range
of financial services and products with branches in New York, New
Jersey, Illinois, Florida and California.
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