Cendant To Receive $54M In Fraud Settlement

NEW YORK— Cendant Corp. is set to receive as much as $54 million through a settlement over an accounting fraud at one of its predecessor companies reached with current and former Cendant officers, according to a recent report by Reuters. Cendant won the settlement as part of a “shareholder derivative action,” which lets stockholders sue on behalf of a company, even though a company either cannot or will not bring the litigation itself. It said it will receive as much as $54 million, depending on whether attorneys fees are taken out. The suit relates to the merger of HFS and CUC International that formed Cendant in 1997. Following the merger, three former CUC executives pleaded guilty to fraudulently inflating CUCs earnings. Two former CUC executives still face criminal charges. In the most recent case, Cendant said it had chosen not to file claims against the affected executives because it has already sued the people it believed were responsible for the fraud. SOURCE: Reuters