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San Francisco, U.S.A. — Visa, MasterCard 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. Visa’s share will be paid from the litigation escrow account established pursuant to Visa’s Retrospective Responsibility Plan. More information on the plan is available in the Company’s filings with the Securities and Exchange Commission at www.sec.gov.
The settlement agreement with the Class Plaintiffs includes, among other terms:
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.
Additional information about these settlements can be found on Form 8-K filed with the U.S. Securities and Exchange Commission and available at www.sec.gov, as soon as accepted and processed by the SEC.
“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. Visa is well positioned to help drive the migration to electronic payments in the U.S. and globally.” Consistent with commitments Visa made at the time of its restructuring, the settlements are subject to approval by Visa USA voting members representing two-thirds of membership proportion.
“This agreement should remove the distraction of litigation for all parties,” said Joshua R. Floum, General Counsel of Visa Inc. “We will go forward with a focus on helping retailers grow their businesses and providing them with efficient and valuable payment options.” Visa remains in a “quiet period” which will extend until the Company’s fiscal third quarter 2012 earnings are released on July 25, 2012.