Chase Manhattan Corp. said it settled a shareholder class action for $5 million in cash and $12.5 million of warrants to buy stock.
The shareholders had asserted that Chase failed to disclose the effect of real estate losses on dividends and its financial condition, said lawyer Peter Harrah.
Mr. Harrah's firm, Wolf, Haldenstein Adler Freeman & Herz, was co-lead counsel for the shareholders with the firm of Lowey, Dannenberg, Bemporadd, & Selinger.
But rather than solve Chase's problems, The settlement will prompt a new suit, said Robert Greenfield, a Philadelphia-based lawyer who specializes in shareholder litigation against banks.
He said he would file a new class action to recoup shareholder losses, alleging the bank is liable not only for failure to disclose information to shareholders but also for "mismanagement".