Visa Inc. and Discover Settle Legal Dispute
Visa Inc. announced today that it has agreed to settle litigation with Discover Financial Services, originally filed in 2004, for $1.8875 billion, which includes $1.7425 billion from the escrow created under Visa’s retrospective responsibility plan, $80 million from Visa Inc. to obtain releases from MasterCard, and an additional $65 million which will be refunded by Morgan Stanley under a separate agreement related to the settlement.
This settlement is subject to approval by Visa’s former U.S. member financial institutions.
“Resolving this longstanding case on reasonable terms is in the best interest of Visa and our clients, cardholders and shareholders,” said Visa Inc. CEO and Chairman Joseph W. Saunders.
As previously disclosed, the settlement allocation between defendants Visa and MasterCard is based primarily on their respective payment card volumes.
Visa’s retrospective responsibility plan was created at the time of the company’s public offering to address potential liability in certain U.S. litigation including this case. More information on the plan is available in the company’s Final Prospectus, dated March 18, 2008, at www.sec.gov.
“Visa will continue to focus on providing the superior value and reliability that our clients and cardholders have come to depend on,” said Saunders.
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