By Patsy R. Brumfield/NEMS Daily Journal
TUPELO – BancorpSouth Inc. has agreed to a payment of more than $29 million, plus interest, on its behalf if a federal judge approves settlement of a 2010 class action lawsuit.
The proposed settlement order comes by “arm’s-length negotiations” by mediators for the Tupelo-based financial holding company and the Tennessee lawsuit’s plaintiff, Edward B. Winslow, on behalf of perhaps as many as 150,000 shareholders.
It calls for payment of $29,250,000 in cash plus interest, and if approved by the court, new documents state, it “will resolve this matter in its entirety between the parties.”
Winslow, a BancorpSouth shareholder, sued the bank as lead plaintiff in August 2010 in the U.S. District Court of Middle Tennessee in Nashville.
He claimed the corporation and its leadership – Aubrey Patterson, James V. Kelly, William Prater and Greg Cowsert – violated federal securities laws by issuing materially false and misleading statements regarding BancorpSouth’s business and financial results. BancorpSouth officials deny all of the allegations of wrongdoing.
The court also is asked to certify who is part of the “class,” or people eligible to receive the payments.
The proposed description for recipients is “all persons” who bought or otherwise acquired BancorpSouth common stock from April 23, 2009, to July 22, 2010.
Excluded from the class are the defendants and their related parties, such as past or present directors and executive officers, and anyone else who asked not to be included.
The parties now ask the court to establish processes by which the final settlement is approved and eligible shareholders will be paid.
Lead plaintiff’s counsel said Tuesday in agreement with BancorpSouth’s earlier statement that the settlement “allows both sides to avoid the potential risks and costs of lengthy litigation.”
Dennis Herman, one of Winslow’s lead attorneys, said he believes the settlement is fair as it awaits consideration by District Judge Kevin H. Sharp.
The proposed settlement order says that the parties agreed in principle to settle the lawsuit May 24.
In a release at that time, BancorpSouth emphasized that its insurance carriers will fund the settlement payment, other than “an immaterial amount of incidental expenses” that BancorpSouth will cover.
Earlier, the financial holding company said its management believed that the settlement will not have a material adverse effect on BancorpSouth’s business, consolidated financial position or results of operations.
Judge Sharp is asked to approve notice of the settlement to the class members for comment on its fairness.
The proposed action also suggests a Nov. 20 deadline for class members to submit proof of claim and release forms.