In Re Broadcom Corp.
(Central District, California)
A proposed partial settlement with numerous insurers is set to allow Broadcom Corp. to recovery $118 million for a derivative suit involving a $2.2 billion stop options backdating scheme. Most of the funds come from the insurers providing Broadcom Corp. with directors and officers coverage.
The proposed settlement was filed Friday in the U.S. District Court for the Central District of California. The settlement would resolve the consolidated federal derivative suit for most of the individual defendants while still allowing Broadcom to pursue its claims against three former executives that are currently facing criminal charges for the scheme. The settlement would also resolve the coverage dispute among Broadcom Corp. and the contributing insurers.
This would be the second-largest derivative settlement ever, second only to the multimillion-dollar United Health Group Inc. settlement that came piecemeal last year. The hearing date to discuss the settlement is scheduled on September 21, 2009 at 10:00 am.
For a copy of the settlement click here. For a copy of the memorandum in support of the settlement click here
Sarah X. Fang and Joseph A. Oliva