Legal News

Shareholder settlement approved in wake of New Century collapse

By Richard Binder

Yesterday U.S. District Judge Dean D. Pregerson granted preliminary approval to a $125 million cash settlement for shareholders of bankrupt New Century Financial Corp., one of the largest lenders to collapse during the subprime mortgage meltdown.

The settlement involves three stipulations: Auditor KPMG LLP will pay $44.75 million; the underwriter defendants will pay $15 million; and New Century's former officers and directors collectively will pay more than $65 million.

The New Century Financial hearing came one week after U.S. District Judge Mariana P. Pfaelzer, also in Los Angeles, granted preliminary approval to a $624 million cash settlement for shareholders of Countrywide Financial Corp., another major subprime mortgager, now owned by Bank of America Corp.

Full story at NLJ.com.

Full post as published by Legal Pad | LA on August 10, 2010 (boomark / email).