The agreement also cancels all outstanding shares of the company's common stock as of today.
The settlement provides that a payment will be made to stockholders who held shares of First Alliance. Payments will consist of $1.50 per share or the shareholder's purchase basis on the effective date of the settlement, whichever is less, provided that the total paid to all shareholders does not exceed $3.25 million. The company says that if the total amount of such payments exceeds $3.25 million, the payment to each former shareholder will be reduced on an equal proportionate basis until the total payments do not exceed $3.25 million. The settlement fund will be administered by a contractor of the Federal Trade Commission.
Until March 2000, First Alliance Corporation was a sub-prime lender headquartered in Irvine.
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