Cash-rich Chatsworth, California shell Computer Memories Inc has finally settled that class-action lawsuit brought in September 1984 on behalf of shareholders who participated in its 1983 offer of shares. Defendants included the company, certain current and former officers and directors, its largest shareholder, Intel Corp, its auditors and certain underwriters, and the suit alleged misstatements and omissions in the August 1983 prospectus, and sought damages of over $50m plus interest. Under the settlement, the suit will be dismissed with prejudice and the defendants will establish a fund to pay claims filed by eligible shareholders, and costs. The $15.5m settlement fund will include shares and cash, $7m to be paid by the directors’ and officers’ insurer. Computer Memories will contribute $4m in cash and $3.5m in stock to the settlement fund, including price protection for the value of the stock issued in a cash amount of up to $1.7m. The balance of the cash part has been contributed by other co-defendants.
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