CURRENT REPORT

 

 

Date of Report (Date of earliest event reported): November 4, 2013

 

 

 

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

 

 

 

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Item 8.01. Other Events.

Higher One Holdings, Inc., or the Company, has recently reached an agreement in principle on the key terms of a preliminary settlement that would resolve the class action litigation that was filed against it in 2012, referred to collectively as, In re Higher One OneAccount Multi-District Litigation. The terms of the preliminary settlement include a payment of approximately $15.0 million and an agreement to make and/or maintain certain practice changes.  The parties remain in negotiations and a final settlement agreement is contingent upon (a) reaching agreement on the remaining terms, (b) obtaining corporate approvals of the final agreement, and (c) court approval. There can be no assurance that these conditions will be satisfied as contemplated in the agreement in principle.

During the quarter ended September 30, 2013, the Company will record an accrual for an estimated charge of $16.3 million to reflect the management's current estimate of the resolution, inclusive of additional legal and other administrative costs, based on the agreement in principle.  While this estimate is consistent with the Company's view of the current exposure based on the agreement in principle, the actual loss or range of such loss could vary materially from the current estimate if the settlement is not finalized and approved.

Item 1.01 Entry into a Material Definitive Agreement

 

On November 4, 2013, Higher One, Inc., or Higher One, a wholly-owned subsidiary of Higher One Holdings, Inc., or the Company, entered into an amendment of its five-year, $200.0 million senior secured revolving credit facility, or the Credit Facility, with Bank of America, N.A., as administrative agent, swingline lender and letter of credit issuer and other lenders party thereto.  The amendment to the Credit Facility excludes the charge related to the settlement of the In re Higher One OneAccount Multi-District Litigation, of up to $16.3 million, from the computation of Consolidated EBITDA, as defined in the Credit Facility.  The amendment to the Credit Facility also permits a final judgment of up to $15.0 million related to the resolution of In re Higher One OneAccount Multi-District Litigation.