The US insurance firm AIG will pay SkillSoft $15 million (€12.6 million) to cover part of the costs of settling a class action lawsuit taken against the e-learning firm by some of its investors.
SkillSoft, which inherited the lawsuit when it acquired SmartForce in 2002, has already paid $15.5 million from its own reserves to cover the March 2004 agreement with investors.
SkillSoft said yesterday that it had reached an agreement with its insurer, AIG, that provided for the payment of $15 million to the firm. It expected to receive the payment before July 31st, 2005.
The lawsuit alleged that SmartForce defrauded investors by making untrue statements of material fact to induce people to purchase its shares. It also alleged the scheme enabled defendants to sell shares at artificially inflated prices during 1998.
Defendants in the suit were named as William McCabe, the entrepreneur who served as chairman of SmartForce between 1991 and August 1998, and Greg Priest, the former chief executive of SmartForce. Mr McCabe is not currently a SkillSoft director. Mr Priest is an adviser to SkillSoft.
The settlement agreed by SkillSoft is one of a number of payments the firm has made to third parties to stop legal action. However, the company is also facing a US Securities and Exchange Commission (SEC) inquiry.
This followed an admission by the firm that SmartForce overstated its revenues prior to its merger with the firm.
SkillSoft has subsequently restated its accounts and refiled statutory tax returns.
