AT&T on Tuesday reportedly reached an agreement – subject to final court approval – to settle a shareholder class action lawsuit underway in U.S. District Court for the District of New Jersey, three weeks after the trial began.
The lawsuit sought damages of approximately $2.4 billion for purchasers of AT&T common stock from Dec. 6, 1999 to May 1, 2000.
Under the settlement, AT&T has reportedly agreed to pay the class $100 million, about four percent of the amount being sought at trial. The payment will be shared equally by AT&T and its former broadband subsidiary, which was spun off in 2002, under the terms of the separation agreement between those entities. In addition, AT&T intends to seek reimbursement from its insurers for the amounts to be paid.
“As we have said all along, we categorically deny any wrongdoing by AT&T or any of its officers and remain confident that we would have been vindicated at the end of this trial,” said Edward Barillari, vice president-Law & Government Affairs. “But, given the size of the claims compared to the relatively low amount of the settlement, the inherent risk and uncertainty of legal proceedings, and the very substantial expense of those proceedings, this settlement is the prudent course for the company.”
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