$210 million settlement okayed in Wilmington Trust shareholder case

WHYY photo.

The eight-year shareholder lawsuit involving the collapse of Wilmington Trust may be near an end with a U.S. District Court okaying a $210 million settlement coming out of U.S. District Court in Delaware.

According to a court filing, the settlement to be paid by M&T is in line with similar shareholder suits that are filed in cases where stock prices collapse on news that may have been hidden from shareholders.

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Numerous shareholder suits filed after the “take under”sale were consolidated into one action.

Plaintiffs had estimated damages at more than half a billion dollars. The suit will cover investors who had purchased stock between 2008 and the sale to M&T in 2010.

The lawsuit came after Wilmington Trust was acquired by Buffalo-based M&T in 2010 for $300 million, a small fraction of its previous market value.

Wilmington Trust had fallen victim to bad loans in real estate and other areas. Economic conditions in Delaware had weakened a couple of years before the recession of 2008 and 2009.

Wilmington Trust had been considered a reliable and safe “widows-and-orphans” stock, with the company piling up a long record of increased earnings and dividends.

This year, top executives, including Wilmington Trust’s former president were convicted by a jury on federal charges related to concealing problem loans from regulators.

M&T retained the Wilmington Trust name for its money management, corporate custody, and other fee-based business.

Attorneys will receive 28 percent of the proceeds under the terms of the settlement.

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