According to the Form 10-Q for the quarterly period ended March 31, 2001, the parties entered into a Stipulation of Settlement dated May 24, 2000, providing for payment of $9.0 million of cash, plus interest accruing through the date of consummation of the settlement, in full and final settlement of all claims. Of that sum, $1.5 million was paid by PennCorp during the fourth quarter of 1999 into an interest-bearing escrow account established by plaintiffs' counsel and $7.5 million plus interest is to be paid by PennCorp's third party director and officer liability insurance carrier upon finalization of the settlement. The settlement received preliminary approval from the court in June 2000, was submitted to the court for final approval at a hearing set for that purpose in November 2000 and received final approval from the court in April 2001.
According to a Press Release dated September, 4, 1998, the Complaint alleges that during the Class Period defendants issued false and misleading statements and omitted material facts regarding the value of PennCorp's assets and the adequacy of its policy and claims reserves. When PennCorp belatedly disclosed that its asset values were dramatically inflated, it was forced to incur a $140 million charge against earnings and to reveal a Securities and Exchange Commission investigation concerning accounting irregularities at PennCorp. PennCorp's common stock, which had traded as high as $35-15/16 per share during the Class Period, plummeted to close at $1-3/4 per share on August 21, 1998 -- a decline of 95%.