The Student Loan Corporation Agrees to Settle Shareholder Class Action Lawsuits
24 December 2010 - 8:58AM
Business Wire
The Student Loan Corporation (the “Company”) (NYSE:STU) today
announced that it and the other named defendants have entered into
a memorandum of understanding with plaintiffs’ counsel in
connection with putative class action lawsuits filed in the
Chancery Court for the State of Delaware and the Superior Court of
the State of Connecticut in connection with (i) the Company’s
merger agreement with Discover Financial Services (“Discover”) and
the merger contemplated thereby (the “DFS Merger”); (ii) the
Company’s agreement with SLM Corporation pursuant to which
affiliates of SLM Corporation will acquire from the Company certain
securitized federal student loans and related assets; and (iii) the
Company’s agreement with Citibank, N.A. (“Citibank”), pursuant to
which Citibank will acquire from the Company certain federal and
private student loans and other assets.
Under the terms of the memorandum, The Student Loan Corporation,
the other named defendants, and the plaintiffs have agreed to
settle the lawsuits, subject to court approval. The Company and the
other defendants deny all of the allegations of wrongdoing in the
lawsuits and believe their actions and the relevant disclosures
with respect to such actions are appropriate under the law.
Nevertheless, the Company and the other defendants have agreed to
settle the putative class action lawsuits in order to avoid the
burden and expense of continued litigation.
Pursuant to the terms of the memorandum, subject to the
effectiveness of the DFS Merger and certain other customary
conditions, including court approval of a final settlement
agreement, in consideration for the full settlement and release of
all defendants, the amount of $2.50 cash per share will be
distributed by Citibank to those persons who are the Company’s
stockholders of record immediately prior to the effective time of
the DFS Merger (excluding Citibank, Discover and their affiliates).
At this point, the settlement agreement is not final and is subject
to a number of future events including approval of the settlement
by the Court. There can be no assurance as to the timing of the
payments described above.
About The Student Loan
Corporation
The Student Loan Corporation (NYSE: STU) is one of the nation's
leading originators and holders of student loans providing a full
range of education financing products and services to meet the
needs of students, parents, schools and lenders. The company was
previously a division of Citibank and became a NYSE-listed
corporation in 1992. Citibank, N.A. is the majority shareholder.
Citibank was one of the first banks to finance higher education,
beginning in 1958.
For information or inquiries regarding student loans, please
call 1-800-STUDENT. Customers with Telecommunication Devices for
the Deaf (TDD) may call 1-800-846-1298. College planning and
financing information is also available at www.studentloan.com.
Forward-Looking
Statements
Certain statements in this document are "forward-looking
statements" within the meaning of the Private Securities Litigation
Reform Act of 1995. These statements are based on management's
current expectations and are subject to uncertainty and changes in
circumstances. Actual results may differ materially from those
included in these statements due to a variety of factors. More
information about these factors is contained in the Company's
filings with the U.S. Securities and Exchange Commission.
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