Cendant Settlement Upheld by Court

A federal appellate panel upheld the record $3.2-billion settlement Cendant Corp. and its accounting firm made with stockholders.

The ruling by the U.S. 3rd Circuit Court of Appeals rejected assertions by some shareholders that stockholders should have received more money in light of a loss they pegged at $8.8 billion.

A three-judge panel of the 3rd Circuit unanimously found that U.S. District Judge William H. Walls of Newark, N.J., did not abuse his discretion in approving the Cendant settlement.

Walls approved the class-action settlement in March 2000, after at least 64 securities fraud lawsuits were consolidated before him.

In addition to the civil action, Walls is to preside next year over the criminal trial of two former executives accused of inflating the value of a Connecticut company involved in the merger that created Cendant Corp.

The accounting fraud, which Cendant disclosed three years ago, led to a one-day, $14-billion stock meltdown and class-action lawsuits by shareholders.

Walter Forbes and E. Kirk Shelton are accused of falsifying the earnings of the direct marketing firm they headed, CUC International Corp., of Stamford, Conn.

Cendant now is based in New York.