After 14 months of negotiations, law firm Jenkens & Gilchrist PC, based here, has agreed to pay $81.55 million in a class-action settlement to put claims related to its tax shelter work behind it.
The final settlement, announced this week, is $6.55 million more than the initial settlement announced in April 2004. Jenkens & Gilchrist also agreed to settle even though some members of the class elected to opt out of the settlement. Under the initial settlement, the firm had retained the right to terminate the settlement if any class members elected to opt out.
In a statement, Jenkens & Gilchrist chairman Tom Cantrill confirmed that the firm reached an agreement with more than 90 percent of the plaintiffs, but said that the firm wouldn't discuss the details prior to the fairness hearing scheduled for Jan. 24.
"As anticipated, some opt-outs remain, but we believe we will have sufficient financial resources, including remaining insurance coverage, to defend or resolve these claims. We are looking forward to putting this matter behind us and moving forward in a positive and successful direction in 2005," Cantrill said.
David Deary, lead counsel for the class members and a partner with the Dallas law firm Deary Montgomery DeFeo & Canada LLP, said that the settlement has provided his clients and class members with crucial information on the role other accounting firms, law firms and investment firms played in promoting, selling and implementing tax strategies to the class members.
"The information we received from Jenkens & Gilchrist as part of the settlement has undoubtedly strengthened our clients' claims against others who were integral players in the scheme," said Deary.
Deary said that his clients will continue to pursue claims against others, including Ernst & Young, BDO Seidman, Grant Thornton, KPMG, Bank One, Sidley Austin Brown & Wood, Pryor Cashman Sherman & Flynn, Lincoln Financial, American Express and Deutsche Bank.
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