A Texas federal judge granted preliminary approval on Thursday for a nearly $23 million settlement with Morgan Stanley, Credit Suisse and a host of other investment banks that served as underwriters for the now-bankrupt Cobalt International Energy Inc.
The Cobalt investors have already secured a $146.9 million settlement with the company over claims that it bribed Angolan officials for access to wells that were later misrepresented as having substantially more value than they did, but they continued to pursue claims against the investment banks that underwrote the company’s multiple stock and note offerings, leading to Thursday’s settlement.
A preliminary settlement motion filed Wednesday said the $22.75 million deal was reached on the same day the motion was entered — Nov. 28 — following several months of mediator-facilitated negotiations and a thorough investigation of the underlying facts by the investors’ counsel. U.S. District Judge Nancy F. Atlas signed off on the deal one day later.
“The court hereby preliminarily approves the settlement, as embodied in the stipulation, as being fair, reasonable and adequate to the settlement class,” the judge said.
Judge Atlas’ order also certified a settlement class of investors who purchased or otherwise acquired Cobalt securities between March 1, 2011, and Nov. 3, 2014, and set a final settlement hearing for Feb. 13.