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Financial services giant Citigroup Inc. agreed to pay $32.4 million to settle shareholder lawsuits filed in Delaware Chancery Court over its $2.4 billion buyout of Travelers Property Casualty Corp. The proposed settlement includes up to $4.4 million in attorneys’ fees. New York-based Citigroup offered in March to buy the 15 percent of Hartford, Conn.-based Travelers it didn’t already own for $41.50 per share. Shareholders of Travelers filed 13 complaints seeking class action status in Chancery Court in Wilmington, arguing they were being shortchanged in the deal. The cases, consolidated into one action, named Travelers, Citigroup and members of the Travelers’ board of directors as defendants. Specifically, plaintiffs complained that the conduct of defendants in connection with the tender offer and the merger constituted a breach of fiduciary duties to Travelers’ minority shareholders. According to court papers, shareholders alleged that a special committee of Travelers’ board appointed in connection with the transaction (the “special committee”) was not disinterested and disclosures in connection with the tender offer were inaccurate and based upon limited and incorrect information. After negotiations with shareholders’ lawyers, Citigroup offered to add 45 cents per share, or $28 million, to its bid for Travelers to settle the suits, according to court papers. The company also agreed to pay up to $4.4 million to cover shareholders’ legal fees. Travelers officials reached the initial agreement to bump up their offer for Travelers’ shares in April, and the tender offer was finalized that month, according to a press release. Vice Chancellor Stephen Lamb still must decide whether to approve the settlement and the legal fees at an Oct. 19 hearing in Wilmington, according to court papers. Travelers shareholders are represented in the case by Joseph A. Rosenthal of Wilmington’s Rosenthal Monhait Gross & Goddess along with Steven Schulman of New York’s Milberg Weiss Bershad Hynes & Lerach. Other investors are represented by lawyers from New York’s Abbey Gardy & Squitieri and Faruqi & Faruqi. Travelers, Citigroup and some of the companies’ directors are represented by Edward P. Welch, Julie A. Tostrup and Lorin M. Hochman of the Wilmington office of New York’s Skadden Arps Slate Meagher & Flom. Other directors were represented by David C. McBride of Wilmington’s Young Conaway Stargatt & Taylor and Paul K. Rowe of New York’s Wachtell Lipton Rosen & Katz. The case is In Re Travelers Property Casualty Corp. Shareholders Litigation, Consolidated CA No. 17902.

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