WSFS Financial in Wilmington, Del., is putting a lingering legal issue to rest.
The $7 billion-asset company said in a press release Tuesday that it will pay $12 million to settle a case tied to Christiana Bank & Trust, which it bought in 2010. The claims relate to Christiana's role as “insurance trustee” of the Charter Oak Trust Welfare Benefit Plan, which turned out to be a complex scheme to defraud insurers.
Universitas Education, which had filed a lawsuit seeking about $54 million in damages, had alleged that funds from certain life insurance benefits were misappropriated. WSFS had contended that the individuals involved were unaffiliated with Christiana or WSFS.
WSFS said it agreed to settle the case to avoid the uncertainties of arbitration and to end ongoing litigation expenses. The company plans to recover the payment through different means, such as enforcing the indemnity right in the 2010 stock purchase agreement from its purchase of Christiana. WSFS has also taken measures to recover expenses through different insurance carriers.
The company said the settlement cut into its fourth-quarter earnings by $9.3 million, or 29 cents a share.
“We are pleased to have reached an agreement on this years-old matter involving events alleged to have occurred prior to WSFS’ acquisition of Christina,” Rodger Levenson, the chief operating officer at WSFS, said in the release. “With this agreement completed, we will focus on pursuing a full reimbursement for these costs.”
