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.
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.