Cendant Settles Shareholder Lawsuit

Share this article:
Cendant, the Parsippany, NJ, direct marketer of memberships, has settled a $350 million class action lawsuit brought by investors after the company's stock plummeted from $41 to $19 per share due to accounting problems last April. The suit alleged that the company misled investors by failing to report the accounting problems.


Cendant has agreed to increase the market value of PRIDES, convertible securities that were issued to finance the acquisition of American Bankers Insurance, Miami, by $350 million for shareholders of record April 15,1998.


The settlement, if approved in court, will cause Cendant to take an after-tax charge of $220 million, or $0.26 per share, for the fourth quarter of 1998. It is not expected to affect 1999 earnings. The accounting problems have forced the company to cancel its acquisition of ABI.
Share this article:

Sign up to our newsletters

Follow us on Twitter @dmnews

Latest Jobs:

More in Agency

John Wanamaker Is Dead, Long Live the CMO

John Wanamaker Is Dead, Long Live the CMO

A century-old motto isn't—and shouldn't be—relevant today. CMOs need to get with the times and put their customer knowledge to good use.

Unleashing the True Power of the Customer

Unleashing the True Power of the Customer

Retailers who harness customer loyalty program data can create a customer-centric competitive advantage.

News Byte: Gartner Retail Expert Joins eCommera as CMO

News Byte: Gartner Retail Expert Joins eCommera as ...

Kevin Sterneckert brings a wealth of knowledge and experience to eCommera.