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Kansas City, Mo. (Nov. 20, 2002) -- H&R Block has settled with members of the plaintiff class in a Texas class action lawsuit over refund anticipation loans.Block said it would absorb a $41.7 million pre-tax charge to second-quarter earnings as settlement to the lawsuit.
Under the settlement, Block has agreed to provide a five-year package of coupons to class members that they can redeem to obtain a variety of tax preparation and tax planning services. The coupons will be issued to Texas class members who received RALs between 1992 and 1996.
"We strongly disagree with the claims made by the plaintiffs and are disappointed in the court's early rulings," said Block chairman Mark Ernst. "Even though we believe we would have ultimately prevailed, we think this settlement is preferable to what would have undoubtedly been a lengthy and costly trial and appeals process."
Block's share of the settlement cost, including plaintiff class legal fees and expenses, tax products and associated mailing expenses, will result in a one-time charge of 14 cents per share in the company's second fiscal quarter. In addition, the company will recognize the cost of the tax preparation rebate coupons as they are redeemed each year.
-- Electronic Accountant Newswire staff
