All parties have reached an agreement in principle to settle the securities fraud class action litigation filed by certain Laidlaw bondholders who purchased securities of Laidlaw from Sept 24, 1997, through March 13, 2000.
The lawsuit alleged that during that period, Laidlaw and the other defendants disseminated false and misleading financial statements and press releases concerning the relative priority of certain Laidlaw debentures and the company's financial condition. Laidlaw and the other defendants denied all liability.
The proposed settlement provides for a release of all claims that the plaintiffs have against Laidlaw and other defendants, including certain former and current Laidlaw officers and directors, underwriters in the bond offerings at issue in the lawsuit, and accountants, and a release of claims by Laidlaw. The company and the other defendants continue to deny all liability.
The settlement is subject to execution of a definitive settlement agreement and approval of the United States District Court for the District of South Carolina, as well as approval of the Bankruptcy Court for the Western District of New York in which the Chapter 11 case of Laidlaw is pending and the court in Canada presiding over Laidlaw's reorganization. In addition, certain aspects of the settlement are subject to confirmation of a satisfactory plan of reorganization for Laidlaw.
Concurrently, an agreement in principle was reached to settle a class action by Laidlaw bondholders against the indenture trustee for the Laidlaw bonds, subject to court approval. Separately, an action by a purchaser of options on Laidlaw bonds is also being settled. If the settlement of the bondholder actions receives required judicial approvals and is implemented, the plaintiff bondholder classes would be paid $42.875 million and the bankruptcy estate of Laidlaw would receive $12.5 million.