An out-of-court settlement is in the works in the $200 million class-action lawsuit over the Manitoba-based Crocus Investment Fund, which collapsed in 2005.

Lawyers are working on a deal that would see Chubb Insurance pay out as much as $5 million in exchange for the plaintiffs, Crocus shareholders, dropping all of the fund’s directors and officers from the suit as defendants.

Details of the settlement will be released January 14, Jay Prober, lawyer to clients in the suit, told the CBC.

About 34,000 investors had more than $150 million invested in the labour-sponsored venture-capital fund, which promoted its mandate to invest in companies in the province. It stopped trading in December 2004 over concerns about the true value of its shares.

In April 2005, the fund dropped the value of its shares to just below $7, almost one-third less than their value when trading was halted.

The fund went into receivership in June 2005.

In a report issued in 2005, Manitoba’s auditor-general said the fund’s operators had overstated Crocus’s value, and the province had missed warning signs that the fund was in trouble.

A report by the fund’s receiver, Deloitte and Touche, released earlier this year attacked the valuation of the fund’s investments, its prospectus and the manner in which the prospectus was prepared.

The Crocus Investors Association filed the class-action lawsuit in July 2005, naming Crocus, the fund’s officers and directors, BMO Nesbitt Burns, Wellington West Capital and the Manitoba government, among others.

The fund remains the subject of an RCMP investigation.