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Informix to Settle Shareholder Lawsuit

May 27, 1999|Bloomberg News

Informix Corp. said it agreed to settle for $142 million a shareholder lawsuit resulting from the restatement of its revenue and earnings in November 1997. If the settlement is approved, Informix will pay about $3.2 million in cash, $13.8 million in insurance proceeds on behalf of certain current and former officers and directors, and at least 9 million shares of Informix stock valued at $91 million. Ernst & Young, the company's former accountant, will pay $34 million in cash. The money will go to compensate those who held company stock from early 1995 to late 1997. During that period, Informix allegedly padded revenue with hundreds of millions of dollars in nonexistent sales. The Menlo Park, Calif.-based database software maker said it settled the lawsuit "to remove the uncertainty, expense and distraction of continuing litigation." A spokesman for Ernst & Young said the accounting firm made no admission of wrongdoing in the settlement. Informix shares rose 3 cents to close at $7.03 on Nasdaq.

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