Deloitte to settle Delphi investor suit for $38 mln
Headline News
Deloitte & Touche LLP has agreed to pay $38.25 million to settle an investor lawsuit over alleged accounting improprieties at bankrupt auto parts maker Delphi Corp plaintiffs' lawyers said on Thursday.
The case in U.S. District Court in Detroit stems from an accounting scandal at Delphi that led to the company restating financial results going back several years in June 2005, the law firms said. Deloitte was Delphi's outside auditor.
The plaintiffs, who were seeking to represent investors who bought Delphi securities from March 7, 2000 to March 3, 2005, sued Delphi, some company officials, Deloitte and certain other entities, the law firms said.
Most of the defendants, including Delphi, have already agreed to settle the case, said Stuart Grant, lawyer for one of the law firms representing plaintiffs in the case.
The value of the settlement with Delphi is about $204 million, with plaintiffs expecting to be paid in the company's common stock and warrants once it emerges from bankruptcy, Grant said.
Delphi, formerly a unit of General Motors Corp, filed for bankruptcy in October 2005 and plans to emerge from Chapter 11 in the first quarter of 2008.
Besides Grant's law firm Grant & Eisenhofer, other firms representing the plaintiffs are Bernstein Litowitz Berger & Grossmann; Schiffrin Barroway Topaz & Kessler; and Nix, Patterson & Roach.
The settlement agreements need to be approved by U.S. District Judge Gerald Rosen, the law firms said.
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