Laidlaw reaches agreement to settle securities litigation
Jan 10, 2002 12:00 PM
Laidlaw Inc, Burlington, Ontario, Canada, has reached an agreement in principle to settle the securities fraud class action litigation, In re Laidlaw Bondholders Litigation, filed by certain of Laidlaw's bondholders who purchased securities of Laidlaw during the period September 24, 1997 through and including March 13, 2000, according to Laidlaw information.
The lawsuit alleged that during that period, Laidlaw and the other defendants disseminated to the investing public false and misleading financial statements and press releases concerning the relative priority of certain of Laidlaw's debentures and the company's financial condition, according to the company information.
Laidlaw and the other defendants denied, and continue to deny, all liability, according to Laidlaw. The proposed settlement of the class action litigation provides for a release of all claims that the plaintiffs have and may have against Laidlaw and the other defendants, including certain of Laidlaw's former and current officers and directors, Laidlaw's underwriters in the bond offerings at issue in the lawsuit, and Laidlaw's accountants, as well as a release of claims by Laidlaw.
The settlement is subject to the execution of a definitive settlement agreement and the approval of the United States District Court for the District of South Carolina, as well as the 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 that is presiding over Laidlaw's reorganization. In addition, certain aspects of the settlement are subject to the confirmation of a satisfactory plan of reorganization for Laidlaw, according to the company information.
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 the 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, Laidlaw states.
Laidlaw Inc is a holding company for North America's largest providers of school and intercity bus transportation, municipal transit, patient transportation, and emergency department management services.