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LendingClub CFO: Class-action settlement does not change capital liquidity plans

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LendingClub CFO: Class-action settlement does not change capital liquidity plans

LendingClub Corp.'s recently announced legal settlement has no effect on the company's capital liquidity plans moving forward, CFO Tom Casey said.

In its earnings release, the company reported that it agreed to a $125.0 million settlement of class-action lawsuits in federal and state courts related to legacy issues first disclosed in 2016. On a call to discuss fourth-quarter 2017 earnings, Casey said the settlement drove most of the company's reported GAAP net loss for the quarter.

CEO Scott Sanborn said the remaining legacy issues the company is continuing to address are derivative lawsuits and ongoing government investigations. It might take "a few quarters" to resolve these issues, he added.

Sanborn said these lawsuits represented LendingClub's "single largest financial exposure," and the settlement will have no material impact on the company's business operations in 2018.

"Considering the risks, timing and legal costs, we believe that this agreement is in the best interest of the company and our shareholders," he said. "We were prepared for this event and have been maintaining sufficient liquidity."