HOUSTON – On Sept. 6, class representatives in a suit against Conn’s Inc., et al., asked the court for a proposed $44.5 million settlement to be approved.
The decision rests with the Houston Division of the Southern District of Texas.
Class representatives Laborers Pension Trust Fund - Detroit and Vicinity, et al. allege that the defendants failed to disclose that Conn’s underwriting criteria was reduced in order to increase retail sales and that credit was issued to consumers who were unable to repay their debts.
“Class representatives have agreed, subject to court approval, to settle all claims asserted in this action in exchange for a cash payment of $22.5 million, which has been deposited in an interest-bearing escrow account,” the motion for final approval states.
The settlement comes after more than three years of litigation. It included “four amended complaints, four rounds of motions to dismiss briefing, extensive fact discovery, a class certification motion, expert discovery related to class certification, and a Rule 23(f) appeal of the court’s class certification order” and more, the motion states.
It took three separate mediations to work out the settlement details, the motion states. When the agreement was finally reached, the class representatives state each side understood the power and the weaknesses of each of the claims involved in the action.
“The substantial settlement was achieved in the face of significant litigation risks. From the outset of the case, there was considerable uncertainty as to whether class representatives would be able to obtain any recovery,” the motion states.
The motion states that the defendants argue that the alterations in Conn’s customer credit standards were unrelated to its credit losses. Defendants maintain that the changes did not have a significant impact on the company’s credit portfolio.
Plaintiffs ask that the proposed settlement be approved because it’s fair and it eliminates the risks they would face during trial.