EmailVisa (V $127.60 +3.61 ) & Mastercard (MA $440.71 +11.14) and U.S. financial institution defendants have signed a memorandum of understanding to enter into a settlement agreement to resolve the Class Plaintiffs' claims in the multi-district interchange litigation (MDL). The claims originally were brought by a class of U.S. retailers in 2005. Visa also has reached an agreement in principle to resolve the claims brought against Visa by a group of individual retailers (the Individual Plaintiffs) in the same MDL litigation.
The proposed settlement payments for both the Class and Individual claims would be approximately $6.6 billion, of which Visa's share would represent approximately $4.4 billion. For the quarter ending June 30, 2012, Visa intends to record a litigation charge of approximately $4.1 billion, which will increase its total FAS 5 reserve for the litigation covered by the Retrospective Responsibility Plan from $285 million to approximately $4.4 billion, to reflect the Class Plaintiffs' Settlement Agreement and management's current estimate to resolve the Individual Plaintiffs' claims. "We believe settling this case is in the best interests of all parties," said Joseph W. Saunders, Chairman and Chief Executive Officer of Visa Inc. "We are comfortable with the terms, which we do not anticipate will impact our current guidance." The settlement agreement with the Class Plaintiffs includes, among other terms: A comprehensive release from participating class members for liability arising out of claims asserted in the litigation, and a further release to protect against future litigation regarding interchange and the other U.S. rules at issue in the MDL litigation.
