NEW YORK – A state judge ordered Discover Financial Services, spun off from Morgan Stanley in 2007, to pay Morgan half of the $2.75 billion funds paid to it by Visa and MasterCard under a 2004 antitrust settlement.
Discover had claimed it was not liable for the previously agreed-upon payment because Morgan Stanley had interfered in settlement negotiations over the landmark case. A separate suit is pending over those claims.
In a ruling Monday, New York State Supreme Court Justice Barbara Kapnick said Discover must pay what amounts to half of the settlement, about $800 million after taxes, to Morgan Stanley as a special dividend.
The antitrust settlement was related to a longstanding policy by Visa and MasterCard barring its card issuers from issuing competitors’ cards, such as those by Discover or American Express.
Discover said it will appeal the ruling.
