$25M MBNA Shareholder Deal Gets Judge's OK

$25M MBNA Shareholder Deal Gets Judge's OK - 6/5/2009 , Class Action News, Class Action, Securities News, shareholder class action, claim, litigation, securities action, common stock'>

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HEADLINES \| SETTLEMENTS AND DISMISSALS \| COURT FILINGS LINKS TO OTHER NEWS \| NEWS ARCHIVE	HEADLINES ARCHIVED SETTLEMENTS AND DISMISSALS ARCHIVED

SETTLEMENT NEWS:

$25M MBNA Shareholder Deal Gets Judge's OK
Shannon Henson

Securities Law 360. June 5, 2009
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EXCERPT: A judge gave preliminary approval Friday to a $25 million settlement in a class action accusing MBNA Corp. and some of its officers and directors of failing to disclose the true financial condition of the company and making false and misleading statements to investors. Chief Judge Gregory M. Sleet of the U.S. District Court for the District of Delaware gave preliminary approval to the deal between the plaintiffs and officers and directors and Bank of America NA, which purchased MBNA in 2005. He scheduled a hearing for final approval for Oct. 6. The judge also certified a class for settlement purposes that includes all investors who bought the common stock of MBNA between Jan. 20, 2005, and April 20, 2005. He named Societe Generale Securities Services Kapitalanlagegesellschaft mbH as lead plaintiff. Motley Rice LLC has served as lead counsel and Rigrodsky & Long PA as liaison counsel. William Narwold, a lawyer with Motley Rice, said Friday that he was optimistic the deal would win final approval. He said the class would likely include hundreds of thousands of members. The case dates back to October 2005, when about 10 suits filed against MBNA were consolidated. An amended consolidated complaint alleged MBNA and some of its offers and directors had overstated MBNA’s 2004 interest-only strip and 2004 earnings. An interest-only strip is a security with cash flows based on the monthly interest payments received from a mortgage pool. The defendants also knowingly or recklessly providing materially false earnings guidance for 2005 and subsequent years, the suit said. Defendants’ alleged misconduct came to light on April 21, 2005, when MBNA reported that its earnings per share would be significantly below its 10 percent target for 2005, a motion seeking preliminary approval of the settlement says.

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