Former Lehman Officials to Pay $90M to Settle Shareholder Lawsuit
In what would be the largest settlement of a suit against Lehman’s top officials, 13 former executives and directors have agreed to pay $90 million to shareholders that accused them of misleading investors in the months leading up to the collapse of the investment bank in 2008.
The former officials, including former chief executive Richard S. Fuld Jr., asked a judge to release insurance proceeds to pay for the settlement on Thursday in Federal Bankruptcy Court in Manhattan, a move that would protect Fuld and his former colleagues from out-of-pocket payments to resolve the case, reports the New York Times Dealbook. Although it is not unusual for insurance policies to cover corporate directors and officers in shareholders’ lawsuits, other litigants, including the state of New Jersey, are rushing to settle with Lehman before the investment bank’s insurance policies’ funds, valued at a total of $250 million, run out.
The settlement will not affect the status of ongoing federal investigations of the company, according to Dealbook.
