Lucent in clear after £200m settlement
Published: 28 Mar 2003 15:31 GMT
Lucent Technologies announced on Thursday that it settled class action shareholder lawsuits against it for $315m (£201m), marking the end of one chapter in the telecom gear maker's troubled history.
Under the settlement, Lucent agreed to pay out $315m in cash, stock or a combination of both. As a result, Lucent expects to take a charge of $420m, or 11 cents a share, in the second quarter.
In addition to Lucent's settlement, the company's insurance carriers have agreed to contribute $148m in cash toward the settlement fund. And Lucent will also seek to recover up to $70m from its insurance carriers to offset its own contribution.
The global settlement resolves 54 separate lawsuits against the company and its current and former officers and directors. The company does not admit to any wrongdoing.
"This settlement puts all pending shareholder and related litigation behind us. By resolving these legacy issues, we can put all our energy into running the business and continuing to rebuild shareowner confidence in the performance of this company," Lucent chief executive Patricia Russo said in a statement.
Back in October 2000, Lucent ousted its former chief executive, Rich McGinn. Then later that year the company issued a restatement on its fourth-quarter results because of accounting errors and issued a first-quarter warning that would miss analysts' estimates by a sizable margin.
The company later became the subject of a Securities and Exchange Commission investigation over accounting irregularities, but it announced last month that it had reached a settlement with the SEC.
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