According to the financial institutions—a group led by Greater Chautauqua Federal Credit Union—the amount is reasonable because the retail chain might go bankrupt from further ligation. Earlier this year, U.S. District Judge John Lee declined to approve the deal and told the banks to file more paperwork, including an amended motion for preliminary approval.
Kmart had worked to deny the banks’ class certification by saying they lack standing because their claims to damages were “premature and speculative.” The chain also argued that the plaintiff’s claims for negligence and violations of consumer protection statutes were inappropriate because the financial institutions were not themselves consumers.
Kmart won that argument, after which the banks and the retailer reached the $5.2 million settlement deal. The other financial institutions involved in the case are First Choice Federal Credit Union, Gulf Coast Bank and Trust Company, Government Employees Credit Union and Oteen VA Federal Credit Union.
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