Judge OKs Increased $50 Million TD Banknorth Pact

On their second try TD Banknorth shareholders have convinced a Delaware judge to approve a dramatically increased $50 million settlement of their challenge to Toronto-Dominion Bank's $3.2 billion buyout of the bank.

At a hearing in the Delaware Chancery Court Vice Chancellor Stephen Lamb approved the pact and praised the plaintiffs' lawyers for negotiating a 16-fold increase in the settlement amount compared to the $3 million proposed pact he rejected in 2007.

The judge awarded the plaintiffs' attorneys $14 million in fees and expenses for generating that benefit for the shareholders through the additional money they will get for the stock they sold in the 2006 buyout of one of New England's largest banking chains.

The current plaintiffs and their lawyers took over the lead role in the litigation after successfully challenging the proposed 2007 settlement as inadequate.

Shareholder suits filed in Delaware, where TD is incorporated, and Massachusetts, home of its headquarters, charged that the TD board was so dominated by its parent that the directors rubber-stamped Toronto-Dominion's $32-a-share offer even though it was "grossly unfair."

Attorneys for the original Delaware lead plaintiffs soon agreed to a $3 million settlement that gave the investors an extra 3 cents per share after their lawyers deducted a $1 million fee award.

However, the plaintiffs who filed parallel suits in Massachusetts intervened in the Delaware action to successfully protest that the proposed pact would give shareholders nothing in return for releasing valid claims.

That new set of plaintiffs and lawyers took over the case and negotiated the new settlement that won the judge's approval.

The new global settlement releases all charges over the going-private buyout.

TD and its directors and officers continue to deny any wrongdoing and say the original offer was fair.

"We settled this to avoid the disruption to our business by taking this to trial," the company said in a press statement.

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The plaintiffs are represented by Michael Hanrahan, Paul Fioravanti Jr., Gary Traynor and Laina Herbert of Prickett, Jones & Elliott in Wilmington, Del.; Samuel Rudman, Evan Kaufman and Jarrett Charo of Coughlin Stoia Geller Rudman & Robbins in Melville, N.Y.; and Michael VanOverbeke and Thomas Michaud of VanOverbeke, Michaud & Timmony in Detroit.TD Banknorth is represented by M. Duncan Grant and Edmond Johnson of Pepper Hamilton LLP in Wilmington.Toronto-Dominion and some individual defendants are represented by Anne Foster and John Hendershot of Richards, Layton & Finger in Wilmington and Michael Chepiga, Lynn Neuner, Michael Ledley and Lisa Rubin of Simpson Thacher & Bartlett in New York.Various other individual defendants are represented by Kevin Shannon and Bradley Voss of Potter, Anderson & Corroon in Wilmington and William Savitt and Meredith Turner of Wachtell, Lipton, Rosen & Katz in New York.