In Re Rhode Island Depositors Economic Protection Corp., 99-5252 (1999)

Opinion

DECISION Before the Court are the petitions of Rhode Island Depositors Economic Protection Corporation, and the receivers of Rhode Island Share and Deposit Indemnity Corporation and Greater Providence Deposit Corporation and its subsidiaries ("DEPCO"). These petitions seek approval of a $4.75 million settlement with Arthur Anderson, LLP ("AA") pursuant to R.I. General Laws §42-116-40.

Objections to these petitions have been filed by five former directors of Greater Providence Deposit Corporation ("Objectors"). Objectors contend that discovery is, or has been, insufficient to contest whether the settlement was arrived at in good faith; and that there is insufficient information before the Court for the Court to exercise discretion in considering the proposed settlement. Further, Objectors are adverse to the allocation set forth in the Release and Settlement Agreement.

AA provided services to Greater Providence Deposit Corporation and/or its affiliates in the 1980's. In 1993, DEPCO asserted its claim against AA and AA denied any liability. There followed an extended period of discovery; the exchange and review of thousands of documents; various tolling agreements; an impasse after years of negotiation; the utilization of an independent, professional mediator; and, the formal mediation process with attendant documentation.

Counsel for both DEPCO and AA have represented that negotiations were adversarial, at arm's length and in good faith. There is no evidence to suggest otherwise. Nor is there evidence or compelling argument to support Objectors' contentions regarding allocation and/or inquiry into proportional damages.

The Court is satisfied that the proposed settlement is fair and reasonable; was the result of arm's length, good faith negotiations and is in the best interest of the parties. The petitions seeking approval of this $4.75 million settlement are approved.