CA To Settle Shareholder Suits

Under the terms of the settlement, Computer Associates said it would issue up to 5.7 million shares of common stock to shareholders in three class action lawsuits. Plaintiffs' attorney fees will be covered by the stock issuance.

"Settling all of these cases at one time is a major step forward, because it removes the uncertainty that always accompanies unresolved litigation and clears distractions that have clouded the real performance of our company," chief executive Sanjay Kumar said in a statement.

Computer Associates, which makes software for corporate mainframe computers, said it planned to take a pretax charge in the current quarter of about $144 million.

The charge is based on the company's $25 closing price on the New York Stock Exchange on Friday and administrative costs associated with the settlement.

id
unit-1659132512259
type
Sponsored post

The after-tax impact of the charge is estimated at $97 million, or 17 cents a share.

The Securities and Exchange Commission and the U.S. attorney's office for the Eastern District of New York are continuing to investigate Computer Associates' accounting practices. Those probes began in 2001.

Shares of Computer Associates fell 22 cents to close Monday at $24.78 on the New York Stock Exchange.

Copyright © 2003 The Associated Press. All rights reserved. The information contained in the AP News report may not be published, broadcast, rewritten or redistributed without the prior written authority of The Associated Press.