Xerox Wins Approval of $69 Million Settlement of Lawsuit Over ACS Buyout
Xerox Corp., the world’s largest maker of high-speed color printers, won final approval for the $69 million settlement of a shareholder lawsuit challenging its $6 billion takeover of Affiliated Computer Services Inc.
ACS investors sued in Delaware Chancery Court and in state court in Texas alleging directors of the student-loan processing company wrongfully agreed to allow ex-Chairman Darwin Deason to collect more than $1 billion in the buyout. The settlement resolves both the Delaware and Texas claims.
“$69 million is a high monetary benefit” for ACS investors, Delaware Chancery Court Judge Donald Parsons Jr. said today in giving final approval to the accord. He also approved $17.2 million in legal fees for investors’ lawyers.
ACS said Sept. 28 that Xerox would pay $18.60 in cash and 4.935 Xerox shares for each ACS share. A union and a pension fund with ACS stock said the price was too low and Deason was getting an unfair windfall.
Lisa Weaver, a spokeswoman for Norwalk, Connecticut-based Xerox, didn’t immediately return a call for comment on the settlement’s approval.
Under the agreement, according to court papers, ACS will pay $56.1 million and Deason will pay $12.8 million, some subject to insurance payments. Former ACS stockholders who file claims will share what’s left of the settlement fund after legal fees and administrative expenses, according to court papers.
‘Chunk of Change’
Lawyers settled the case just before a trial was set to start May 10 in Wilmington before Parson.
“We were able to get a hefty chunk of change” for disgruntled ACS shareholders, Stuart Grant, a Wilmington, Delaware-based attorney representing ACS investors, told Parsons today.
Dallas-based ACS, the U.S.’s biggest student-loan processor, has expanded its business to help companies outsource financial service, human resources and computer functions.
The Delaware cases are Sheet Metal Workers Local 28 v. Affiliated Computer Services, CA4933, and New Orleans Employees’ Retirement System v. Deason, CA4940 (Consolidated), Delaware Chancery Court (Wilmington).
To contact the reporters on this story: Jef Feeley in Wilmington, Delaware, at jfeeley@bloomberg.net; Phil Milford in Wilmington, Delaware, at pmilford@bloomberg.net.
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