Toll Brothers Inc., the largest luxury home builder in the U.S., has agreed to pay $25 million to settle a lawsuit alleging that the company had misled investors about its ability to overcome the housing market dip, Bloomberg reports.
In April 2007, the City of Hialeah, Florida Employees' Retirement System sued the company, claiming its directors misrepresented demand for its new homes during the fiscal year of 2005 as well as growth projections for 2006.
The investors had purchased shares between December 9, 2004 and November 8, 2005. Toll Brothers denies any wrongdoing, according to the news provider.
In settlement papers, filed on October 28 in U.S. District Court in Philadelphia, the company and its board said it wanted to "eliminate the uncertainty, risk, burden and expense of further litigation, and to permit the operation of the company's business without further distraction."
In August, Toll recorded its first quarterly profit since 2007, posting a $26.5 million third-quarter gain and ending its streak of 11 consecutive losing quarters, the news source said.