Emily Westridge Black in Law360: Target, MasterCard Pact To Clear High Buy-In Hurdle

04/17/2015

The $19 million deal that Target Corp. announced Wednesday to resolve data breach claims brought by issuers of MasterCard-branded payment cards hinges on 90 percent of the issuers accepting the offer, a high threshold that attorneys say is likely to be met despite early skepticism from some credit unions and banks.

Under the terms of the settlement struck between Target and MasterCard International Inc., the $19 million furnished by Target will be used to fund recovery offers MasterCard will make to eligible banks and credit unions. Those offers will cover their claims for operational costs and fraud-related losses tied to the retailer's infamous 2013 data breach, which impacted up to 40 million credit and debit cards used to make purchases at Target stores nationwide.

However, the settlement is contingent upon at least 90 percent of the eligible MasterCard issuers accepting their alternative recovery offers by May 20, adding a wrinkle that makes execution of the settlement far from a foregone conclusion...

“The benefit that the issuing banks would be getting in accepting the settlement is finality,” Haynes and Boone LLP attorney Emily Westridge Black said. “If they accept the settlement offer, they will get their money by the end of the second quarter this year and don't have to incur litigation expenses and the uncertainty inherent in litigation. They will just be given their payment and can move on.”

Excerpted from Law360. To read the full article, click here (subscription required).

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