Bloomberg the Company & Products

Bloomberg Anywhere Login

Bloomberg

Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.

Company

Financial Products

Enterprise Products

Media

Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000

Communications

Industry Products

Media Services

Follow Us

Toll Brothers to Pay $25 Million to End Lawsuit

Nov. 2 (Bloomberg) -- Toll Brothers Inc., the largest U.S. luxury-home builder, agreed to pay $25 million to settle a lawsuit that alleged the company misled investors about its ability to weather the slump in the housing market.

The City of Hialeah Employees’ Retirement System in Florida sued in April 2007, claiming directors misrepresented demand for Toll’s new homes in fiscal year 2005 and growth projections for 2006. The Laborers Pension Trust Fund for Northern California joined as co-plaintiff seeking to represent investors who bought shares from Dec. 9, 2004, to Nov. 8, 2005. Toll denies any wrongdoing.

Toll and its board “wish to eliminate the uncertainty, risk, burden and expense of further litigation, and to permit the operation of the company’s business without further distraction,” according to settlement papers filed Oct. 28 in U.S. District Court in Philadelphia.

Toll in August reported its first quarterly profit since 2007. The homebuilder, based in Horsham, Pennsylvania, recorded a $26.5 million third-quarter gain from a tax benefit, ending a streak of 11 straight quarterly losses.

Martin Connor, Toll’s chief financial officer, declined to comment on the settlement. In a Sept. 8 regulatory filing, Toll said the agreement was reached in July and will be funded entirely by the company’s insurers.

Under the agreement, which requires a judge’s approval, plaintiffs’ lawyers will receive fees totaling about 25 percent of the settlement amount, or $6.25 million, plus expenses of as much as $750,000, according to court papers.

Toll rose 67 cents, or 3.8 percent, to $18.52 at 4 p.m. in New York Stock Exchange composite trading. The shares have fallen 1.5 percent this year.

The case is City of Hialeah Employees’ Retirement System v. Toll Brothers Inc, 07-cv-1513, U.S. District Court, Eastern District of Pennsylvania (Philadelphia).

To contact the reporters on this story: Sophia Pearson in Wilmington, Delaware, at spearson3@bloomberg.net.

To contact the editor responsible for this story: David E. Rovella at drovella@bloomberg.net.

Please upgrade your Browser

Your browser is out-of-date. Please download one of these excellent browsers:

Chrome, Firefox, Safari, Opera or Internet Explorer.