In a development that undoubtedly will attract comment and controversy, fourteen former Lehman Brothers executives--including former Lehman Chairman and CEO Dick Fuld--have reached an agreement to settle the consolidated securities class action litigation that has been filed against them for $90 million. In a separate development, seventeen former Lehman executives have agreed to settle the separate lawsuit brought against them by the New Jersey Treasury Department Investment Division for $8.25 million.
The entire amount of both settlements is to be funded by D&O insurance. The settlements are subject to the consent of the bankruptcy court to lift the stay in bankruptcy to allow the D&O insurers to fund the settlement, as well as to the approval of the respective courts in which the respective settled actions are pending. The executives' motion for relief from the bankruptcy stay in connection with the equity and debtholders' action can be found here. The executives' motion for relief from the bankruptcy stay in connection with the New Jersey action can be found here.
Peter Lattman's August 25, 2011 article on August 25, 2011 article on The New York Times Dealbook blog describing the motions and the settlements can be found here. Nate Raymond's August 25, 2011 article on The Am Law Litigation Daily about the settlements can be found here.
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Read other items of interest from the world of directors & officers liability, with occasional commentary, at the D&O Diary, a blog by Kevin LaCroix.
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