Bankruptcies Reduce Class Action Settlements: Study

Law360, New York (March 27, 2007, 12:00 AM EDT) -- Companies that filed for bankruptcy or had their stock de-listed from a major exchange had paid $1.5 million less in class action settlements than non-distressed issuers, according to a recent study.

The study of class action settlements found that between 1996 and 2006, more than 35% of issuer firms between 1996 and 2006 filed for bankruptcy or had their stock de-listed from a major exchange prior to a class action settlement hearing

The issuers have good reason to show financial distress. The study found that settlement...
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