News

Toronto-Dominion Bank and the New Jersey bank that it's buying have entered into a settlement agreement to put to rest a number of lawsuits that had been filed on behalf of the target bank's shareholders.

As part of the agreement, they will make changes to some aspects of the $8.5-billion (U.S.) takeover deal, including reducing the break fee that Commerce Bancorp Inc. of Cherry Hill, N.J., would have to pay TD if the takeover falls through.

In regulatory filings yesterday, Commerce disclosed that 10 purported shareholder class-action suits against it had been filed since it announced on Oct. 2 that it had struck a deal to be taken over by TD.

All of the suits named Commerce and some of its executives and directors; seven of the suits also named TD Bank.

The suits, which were consolidated in the New Jersey Superior Court, alleged that TD was not paying enough for Commerce, which was accused of not doing enough to maximize shareholder value. Plaintiffs then took their claims to the federal court in New Jersey, where TD was accused of aiding and abetting a breach of fiduciary duty.

"Although Commerce and TD believe that these lawsuits are without merit, they sought a settlement in order to avoid the burdens and expenses of further litigation," Commerce's proxy statement said.

They negotiated from Dec. 28 to Dec. 31, when they reached a settlement agreement that was put to the court on Jan. 2.

It led to TD and Commerce making additional disclosures about their deal. They also agreed to change the break fee, chopping it to $255-million from $332-million.

The proposed settlement is still subject to court approval.