According to the court's docket, the parties reached a Stipulation of Settlement on November 10, 1998. The court entered its final judgment and order approving the settlement on January 21, 1999.
As reported by the firm's 10-K dated April 6, 2000, in connection with the approval and effectiveness of their Bankruptcy Plan, the Company settled a putative class action brought on behalf of certain purchasers and sellers of Westbridge's Convertible Notes and Old Common Stock during the period October 31, 1996 through October 31, 1997.
The Complaint alleges that Westbridge and certain of its officers and directors violated the Securities Act of 1933 and the Securities Exchange Act of 1934. Throughout the Class Period Westbridge is alleged to have reported financial results which materially overstated Westbridge's earnings due to Westbridge's establishment of inadequate reserves for pending insurance claims. During the Class Period, Westbridge increased its revenue from renewal premiums
every quarter, yet allowed an undisclosed backlog of pending submitted claims to build up, and rather than increase its reserve for these claims, it actually decreased its reserve.