clock menu more-arrow no yes

Filed under:

Discover Financial settles dispute

RIVERWOODS, Ill. — Discover Financial Services said on Friday that it paid Morgan Stanley $775 million to settle a dispute over the proceeds from an antitrust lawsuit filed before Morgan Stanley spun off Discover in 2007.

The settlement, which Discover disclosed in a Securities and Exchange Commission filing, comes after a New York State Supreme Court justice ruled early last month that Discover had to pay Morgan Stanley a special dividend negotiated when the credit card company was spun off.

At the time of the June 2007 spinoff, Discover agreed with Morgan Stanley to share money received from an antitrust lawsuit Discover had pending against Visa Inc. and MasterCard Inc. Discover settled the antitrust case for $2.75 billion, of which Morgan Stanley was entitled to $1.2 billion.

However, Discover declined to pay Morgan Stanley, claiming it interfered in the Visa and MasterCard settlement. Morgan Stanley, which is based in New York, then sued Discover in a New York court for breach of contract.