Summary
Arthur J. Gallagher & Co. (AJG) filed an 8-K on December 29, 2006, to report on the resolution of a Federal Multi-District class action litigation (MDL) concerning industry-wide contingent commission matters. The company has reached an agreement to settle all claims, although it explicitly denies any wrongdoing. This settlement, subject to court approval, involves the distribution of $28.0 million to current and former clients who used a broker to purchase retail insurance between 1994 and 2005, and an additional $8.85 million for plaintiff's attorney fees.
Key Highlights
- 1AJG has reached an agreement to settle all claims related to the Federal Multi-District class action litigation (MDL) concerning contingent commission matters.
- 2The company explicitly denies any admission of wrongdoing in connection with the settlement.
- 3The settlement requires AJG to distribute $28.0 million to clients and others who purchased retail insurance via a broker between 1994 and 2005.
- 4Additionally, AJG will pay $8.85 million in plaintiff's attorney fees.
- 5A pretax charge of $5.0 million to $10.0 million will be incurred in the fourth quarter of 2006 to cover administrative costs and other related litigation matters.
- 6Substantially all costs associated with the MDL settlement have been previously reserved for on the company's balance sheet.