Broadcom Settles Class-Action Suit6/24/2005 5:55 AM Eastern
Broadcom Corp. said Friday that it has reached an agreement in principle to settle the securities class-action litigation currently pending against it and certain of its current and former officers and directors.
The suit was brought on behalf of persons and entities who bought or acquired shares of Broadcom's common stock, or options on such shares, between July 31, 2000-Feb. 26, 2001.
Broadcom said the litigation will be dismissed in exchange for an aggregate cash payment of $150 million -- approximately $40 million to be paid by its insurance carriers, with the balance to be paid by the company.
The company said its proposed settlement remains subject to the satisfaction of various conditions, including negotiation and execution of a final stipulation of settlement; approval by the U.S. District Court for the Central District of California following notice to members of the class; and a commitment by the company's insurance carriers to fund a portion of the settlement payments.
“We have agreed to settle this lawsuit so that we may put this longstanding matter behind us and focus Broadcom's energies and resources on our business objectives and the many market opportunities before us," senior vice president and general counsel David A. Dull said in a prepared statement
"We have vigorously fought these charges for over four years, and we were fully prepared to take this matter to a trial on the merits,” he added. “We believe we would have prevailed at trial. But given the strength of our balance sheet and our future prospects, we concluded that this settlement provides a reasonable opportunity to avoid the continuing costs and distraction of this litigation and eliminates the chance, however slight, of a substantially greater financial exposure that is inherent in a jury trial."