U.S. District Court in Newark, NJ, denied a request by federal prosecutors for more time to investigate alleged criminal conduct in Cendant Corp.’s accounting and ordered the related civil suit to proceed.
The U.S. Attorney’s Office for New Jersey felt that allowing the suit to go forward could hamper its investigation. Cendant also wanted the delay, since Chairman Henry Silverman believed it would make shareholders more willing to settle out of court.
Both the civil and the criminal investigations stem from the April 1998 discover of accounting “irregularities,” including some $500 million in income that didn’t exist. Damages could cost Cendant as much as $3 billion, by some estimates.
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