California Teachers' Pension and Homestore Settle Class Action Suit; Corporate Governance Reforms Highlight Settlement.Business Editors/Education Writers SACRAMENTO, Calif.--(BUSINESS WIRE)--Aug. 13, 2003 Homestore Inc. has agreed to reform its corporate policies and to pay approximately $64 million in cash and stock to settle a class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax accusing the Internet real estate "Internet Real Estate" is a popular buzzword that has two different definitions. First, "Internet Real Estate" can be used to describe the use of the Internet to promote, advertise, and view commercial and residential real estate for lease or purchase. company of falsifying fal·si·fy v. fal·si·fied, fal·si·fy·ing, fal·si·fies v.tr. 1. To state untruthfully; misrepresent. 2. a. financial statements and engaging in accounting irregularities. The settlement, reached between Homestore and the lead plaintiff, the California State Teachers' Retirement System, was announced Wednesday. The suit is being prosecuted on behalf of CalSTRS by the Burlingame, California Burlingame is a city in San Mateo County, California, which is the second wealthiest county in the state, as well as the fourteenth richest in the country. It is located on the San Francisco Peninsula and has a significant shoreline on San Francisco Bay. law firm Cotchett, Pitre, Simon & McCarthy, lead counsel, and their co-counsel Wasserman, Comden, Casselman & Pearson of Tarzana, California. "This settlement represents a major victory for all shareholders, not just those with Homestore stock," said Jack Ehnes, chief executive officer of CalSTRS. "Homestore has agreed to institute meaningful corporate governance Corporate Governance The relationship between all the stakeholders in a company. This includes the shareholders, directors, and management of a company, as defined by the corporate charter, bylaws, formal policy, and rule of law. protections, setting an example for all of Wall Street. At the same time we were able to meet our goal of recovering significant compensation for the class." Under the settlement, subject to approval by the U.S. District Court in Los Angeles Los Angeles (lôs ăn`jələs, lŏs, ăn`jəlēz'), city (1990 pop. 3,485,398), seat of Los Angeles co., S Calif.; inc. 1850. , Homestore will adopt innovative and cutting edge corporate governance provisions including: -- Requirements for independent directors and special committees -- A non-classified board of directors with two-year terms -- Appointment of a new shareholder-nominated director -- Prohibition prohibition, legal prevention of the manufacture, transportation, and sale of alcoholic beverages, the extreme of the regulatory liquor laws. The modern movement for prohibition had its main growth in the United States and developed largely as a result of the on the future use of stock options for director compensation -- Requirements for minimum stock retention by officers after exercise of future stock option grants Homestore also will pay $13 million in cash and issue 20 million shares of common stock to members of the class. As of closing on August 12, that stock was valued at $50.6 million. Bruce L. Simon of Cotchett, Pitre, Simon and McCarthy, said the settlement "is a major first step in recovering the losses suffered by shareholders of Homestore and assuring that the company will strictly adhere to adhere to verb 1. follow, keep, maintain, respect, observe, be true, fulfil, obey, heed, keep to, abide by, be loyal, mind, be constant, be faithful 2. corporate governance policies that will prevent any financial manipulation in the future." The settlement covers only Homestore, Inc. and certain officers and directors. Legal action against other defendants in the case is pending. Those defendants include Stuart H. Wolff, former chief executive officer and chairman of the board of Homestore; Peter B. Tafeen, former executive vice president, business development and sales; and PricewaterhouseCoopers, the accounting firm that audited Homestore's financial statements. CalSTRS, with a $100 billion investment portfolio, is the third largest public pension fund in the nation. It administers retirement, disability and survivor benefits for California's public school educators in grades kindergarten kindergarten [Ger.,=garden of children], system of preschool education. Friedrich Froebel designed (1837) the kindergarten to provide an educational situation less formal than that of the elementary school but one in which children's creative play instincts would be through community college, serving more than 715,000 members and beneficiaries. |
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