HSBC Unit Liability on Verdict $1.5 Billion, Lawyer SaysAndrew Harris
The HSBC Holdings Plc unit once known as Household International Inc. is liable for about $1.5 billion in damages to shareholders who a Chicago federal court jury found in 2009 were misled by the company and three executives, a plaintiffs’ attorney said.
The lawyer, Michael J. Dowd, told U.S. District Judge Ronald A. Guzman at a hearing today in Chicago that an independent claims examiner reviewed and approved investor claims approaching that amount, for which the attorney seeks entry of a partial judgment.
That $1.48 billion in allowed claims from about 10,000 stockholders may be augmented by pre-judgment interest in the 11-year-old lawsuit or wiped out by post-trial motions, Dowd said in an interview outside the courtroom. Still more claims remain to be resolved, he said.
Noting the litigation has gone on “for years and years,” Guzman said from the bench, “it’s got to come to an end.”
Household stockholders sued the company in 2002, alleging the company and three executives made misleading statements about its mortgage lending practices. The lender had earlier agreed to pay $484 million in fines to settle claims lodged by more than a dozen states.
Jurors in May 2009 decided the company, former Chief Executive Officer William Aldinger and two other people made recklessly misleading comments 16 times and in one instance involving Aldinger, did so knowingly.
While the jury determined that stockholder losses from March 23, 2001, to Oct. 11, 2002, could be as much as $23.94 a share, it made no lump-sum award. The ensuing claims evaluation process has lasted four years.
Guzman today told defense lawyer R. Ryan Stoll he can update post-trial briefs filed in 2009 with developments in the law since then while barring him from raising new legal issues. Final briefing from all sides is due in September, Guzman said.
Household was acquired by London-based HSBC in March 2003 for $15.5 billion.
The case is Lawrence E. Jaffe Pension Plan v. Household International Inc., 1:02-cv-05893, U.S. District Court, Northern District of Illinois (Chicago).