San Francisco, November 7 (ots/PRNewswire) -
- Settlement to be Funded by Visa USA Financial Institutions, Not
- Settlement Addresses Claims Against Bank Defendants
Visa Inc. announced today that the litigation with American
Express pending since 2004 has been settled. The settlement will
ultimately be funded by members of Visa USA -- not Visa Inc. --
through the company's retrospective responsibility plan, a series of
agreements with U.S. financial institutions to fund financial
obligations of certain litigation, including this case. The plan was
described in Visa Inc.'s recent S-4 filing.
The settlement agreement, which is contingent upon Visa USA member
approval, ends all current litigation between American Express and
Visa USA, Visa International and their members related to this issue.
By settling this litigation Visa is not conceding any liability in
the dispute. In addition, the settlement resolves American Express's
actual or potential claims against the named bank defendants in this
case: US Bank, Wells Fargo, Washington Mutual, JPMorgan Chase & Co.
and Capital One. The agreement covering the bank defendants absolves
them of all responsibility in this matter related to their
participation in the Visa and MasterCard networks.
"Visa is doing what is in the best interests of its membership and
the new organization," said Visa Inc. CEO and Chairman Joseph W.
Saunders. "Our retrospective responsibility plan and these settlement
agreements reduce risk and uncertainty for our members and Visa. I
believe this is a positive resolution for Visa and its financial
Under the proposed agreement, American Express will receive US$945
million from Visa and an additional payment from the bank defendants
by March 15 and no later than March 31, 2008. Beginning March 31,
2008, Visa will pay American Express an additional amount of up to
US$70 million a quarter for 16 quarters, for a maximum total of
US$1.12 billion. Visa's nominal payout is US$2.065 billion with an
accounting reserve of US$1.9 billion and a net present value to Visa
of US$1.8 billion.
The member institutions of Visa USA - and not Visa Inc. - bear the
responsibility for funding the settlement through the application of
Visa's retrospective responsibility plan. The plan includes a
multi-step mechanism to fund financial obligations of Visa USA and
Visa International related to certain litigation, including the
American Express case. Through this mechanism, any payments made by
Visa Inc. as part of this settlement ultimately will be reimbursed by
Visa USA member institutions.
"With this dispute behind us, Visa will remain focused on being a
global payments leader," Saunders said. "We are confident in our
competitive position and the value we provide our customers with our
comprehensive suite of products, secure and reliable payment system,
and leading global brand and merchant acceptance."
ABOUT VISA: Visa operates the world's largest retail electronic
payments network providing processing services and payment product
platforms. This includes consumer credit, debit, prepaid and
commercial payments, which are offered under the Visa, Visa Electron,
Interlink and PLUS brands. Visa enjoys unsurpassed acceptance around
the world and Visa/PLUS is one of the world's largest global ATM
networks, offering cash access in local currency in more than 170
countries. For more information, visit www.visa.com.
FORWARD-LOOKING STATEMENTS: This press release contains
forward-looking statements. These statements may be identified by the
use of words such as "will," "believes," "anticipates," "intends,"
"estimates," "expects," "projects," "plans" or similar expressions.
Such forward-looking statements include, without limitation,
statements about the proposed settlement, our retrospective
responsibility plan, strategy, future operations, prospects, plans
and objectives of management and events or developments that we
expect or anticipate will occur. The forward-looking statements
reflect Visa's current views and assumptions and are subject to risks
and uncertainties, which may cause actual and future results and
trends to differ materially from the forward-looking statements,
including but not limited to Visa's ability to achieve its strategic
objectives and the expected goals of the settlement and our
retrospective responsibility plan; general market conditions; the
outcome of legal proceedings; uncertainties inherent in operating
internationally; and the impact of law and regulations. Many of these
factors are beyond Visa's ability to control or predict. Given these
factors, you should not place undue reliance on the forward-looking
CONTACTS: Joseph Carberry
Web site: http://www.visa.com
ots Originaltext: Visa International
Im Internet recherchierbar: http://www.presseportal.ch
Joseph Carberry, Visa, +1-415-932-2164, email@example.com