This excerpt taken from the FHN 8-K filed Feb 22, 2007.
WHEREAS, Plaintiffs David C. McLean, Holly E. McLean, Roger K. Jones, and Eugenia M. Jones, received second mortgage loans from McGuire Mortgage Company;
WHEREAS, effective January 1, 1999, all of McGuires assets and liabilities were acquired by First Horizon and McGuire was merged into First Horizons predecessor in name;
WHEREAS, on November 16, 2000, David C. McLean and Holly E. McLean filed a Petition for Damages in the Circuit Court of Jackson County, Missouri, in an action styled McLean v. First Horizon Home Loan Corp., No. 00-CV-228530;
WHEREAS, on May 10, 2001, Roger K. and Eugenia M. Jones joined as plaintiffs in the Action by virtue of the filing of a Second Amended Petition for Damages;
WHEREAS, the final, operative Petition in the Action is Plaintiffs Third Amended Petition, which was filed on April 11, 2006;
WHEREAS, the Third Amended Petition alleges that Plaintiffs were charged certain fees in connection with their second mortgage loans from McGuire that were not permitted by, or exceeded the allowable fee limitations in, Missouris Second Mortgage Loan Act, R.S. Mo. § 408.231, et seq. (MSMLA);
WHEREAS, the Third Amended Petition alleges claims under the MSMLA on behalf of the Plaintiffs and a class of other borrowers whom Plaintiffs allege to be similarly situated to them;
WHEREAS, Plaintiffs, on their behalf and on behalf of others, attempted to assert other claims against First Horizon, including claims under the Missouri Merchandising Practices Act, R.S. Mo. § 407.010, et seq. and although those claims have not been added to the Action, they remain potentially viable;
WHEREAS, a class was certified on December 17, 2002 and the definition of that class was amended on March 31, 2003, and class notice was provided to a number of persons thought to be persons who obtained a second mortgage loan from McGuire or First Horizon between November 17, 1994 and September 2003.
WHEREAS, contested issues of both law and fact exist concerning the allegations and claims in the Action;
WHEREAS, First Horizon denies the allegations made in the Action, contests all liability with respect to any and all facts and claims alleged in the Action, and denies that Plaintiffs or any member of the Class that Plaintiffs purport to represent have suffered any damages;
WHEREAS, the parties have conducted an extensive investigation into the facts and law and have engaged in extensive discovery and settlement negotiations relating to the Action;
WHEREAS, the parties and their counsel have fully analyzed and evaluated the merits of each partys contentions and the terms of this Agreement as it affects all parties, including the individual members of the Class as defined below, and, after taking into account the foregoing along with the risks of litigation, and the likelihood that the Action, if not settled now, will be protracted and expensive, they are satisfied that the terms and conditions of this Agreement are fair, reasonable, and adequate, and that a settlement is in the best interest of the Class; and
WHEREAS, First Horizon vigorously and expressly denies liability, but nevertheless desires to settle the Action finally on the terms and conditions herein set forth for the purposes of avoiding the burden, expense, and uncertainty of litigation, and putting to rest the controversies engendered by the Action and the issues within the scope of the releases set forth below. By agreeing to this Settlement, neither party retracts or surrenders any of the factual or legal positions they have asserted in the Action, or concedes the invalidity of those positions;
NOW THEREFORE, in consideration of the covenants and agreements set forth herein, it is agreed that the Action shall be settled, subject to judicial approval, under the following terms and conditions: