Visa puts another $700 million in litigation fund Associated Press, 07.17.09, 06:20 AM EDT
SANFRANCISCO -- Visa Inc., the world's largest credit and debit cardprocessor, said it has deposited $700 million into an account earmarkedfor litigation costs, a move that essentially acts as the repurchase ofclass B shares.Visaset aside $3 billion of proceeds from its March 2008 initial publicoffering to cover potential liabilities in lawsuits alleging Visaconspired to stifle competition and fix prices. The account providescoverage and potential payments for judgments or settlements in U.S.legal cases against Visa, and acts to protect Visa's commonshareholders from direct losses.
In December the company deposited $1.1 billion into the litigation escrow account. U.S.financial institutions are the sole holders of class B shares. Underthe plan, when Visa funds the account, only class B shareholders bearthe expense. Thus, as Visa funds the account, it reduces the conversionprice for class B shares into class A shares.
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