Archive for July, 2012

Delphi Class Action Lawsuit

Delphi Financial Group is a financial company with its main focus is on many types of business insurance.  The company features on the US stock exchange (NYSE:DFG).

Delphi was involved in a class action lawsuit along after it merged with Tokio Marine.  A settlement was announced during April of 2012.  The lawsuit stated that the defendants were in violation of federal security law and that they had put forth misleading or false statements which resulted in inflation of the market price of their securities.

Shareholders buying these securities between January 2001 and March 2005 were wronged and instigated the lawsuit.  The wrong doing was found by U.S. Securities and Exchange Commission who undertook an investigation finding that the profits laid out by Delphi had been inflated.

On May 16 of 2012 it was announced that a $49 million settlement was in order.  On July 31 of 2012 there will be a settlement hearing in the Court of Chancery Courthouse of  Georgetown.  They will determine the Settlement Class and decide whether the proposed Settlement is adequate.    They will also determine whether Release Claims should be dismissed, and whether the Allocation Plans are adequate and if the fees and reimbursement amounts for attorneys are reasonable.

Class Action Settlements

In legal language the lawsuit settlement occurs when a resolution is reached between the parties that are in dispute. The settlement takes the form of a contract between the parties. This can occur pre-trial or once it is in progress.

Upon settlement the party instigating the suit will drop the lawsuit in exchange for compensation of some sort. Both parties are legally bound by this contract. If one of the parties breach this contract then the court case could resume.

Within a class action lawsuit notices should be sent to class members as part of due process. These notices can include information relating to opting out of the class action and go it alone. The court should be informed of this by the class member if this is the case. If there is a class action settlement a settlement notice is sent out to class members to inform them of the result including full details of the settlement.

The benefits of reaching a settlement include reduced fees and associated costs along with a quicker resolution to the lawsuit. In certain circumstances the details of a settlement are deemed private and confidential and the sued party is not admitting that it was in the wrong.

 

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