Advanta Corp. announced late last week that the Internal Revenue Service (IRS) has given final approval of the settlement of the tax disputes between Advanta Corp. and FleetBoston Financial Corporation, which was acquired by Bank of America Corporation (NYSE:BAC) in 2004.
The settlement of the tax disputes is part of Advanta's agreement with Bank of America. As a result of the IRS approval, Advanta received $63.8 million in cash from Bank of America, representing a return of the payments that were made to Fleet in the Delaware state court litigation in early 2004.
Consistent with the terms of the settlement, all outstanding litigation between the two companies is being dismissed. The settlement results in a net after-tax gain of approximately $61 million and an increase in book value of approximately $2.45 per share, as previously outlined.
The impact of the settlement, which will be reflected in Advanta's first quarter 2005 results, was not included in the Company's previously announced 2005 guidance estimates.
Advanta focuses on the small business market and related community, providing funding and support to the nation's small businesses through innovative products and services.