A lawsuit which was filed against the former owners of bankrupt diamond company M. Fabrikant and Sons was approved by the federal judge and proposed settlement. With the hearing the year-long battle over the family’s assets came to an end.

According to documents filed in U.S. Bankruptcy Court for the Southern District of New York, Chief U.S. Bankruptcy Judge Stuart M. Bernstein approved the proposed settlement on June 16.

In the settlement it dictates that Matthew, Theresa, Charles, Marjorie and Susan Fortgang and a long list of affiliate defendants make a cash payment of $8.05 million to lenders and creditors, known as the "shared assets trust" (SAT). it also states that the SAT will receive any and all amounts remaining in the Fortgangs' $5.5 million insurance policy, net of the $1 million the insurance company is contributing to the $8.05 million settlement.

Besides, any defendants with a claim against the General Unsecured Creditors (GUC) Trust and/or De Beers in the antitrust case will assign those claims to the SAT. it is also mentioned in the settlement that the SAT is entitled to 40 percent of recoveries obtained by the GUC Trust, but it is not permitted to share in any other distributions by the GUC Trust, including the $5 million the SAT will be distributing to the GUC Trust.

$201.5 million originally sought by the SAT, when it filed a suit in June 2008, claiming that the Fortgangs diverted funds before filing for Chapter 11 bankruptcy protection for M. Fabrikant and Sons, potentially cheating them out of millions. SAT received $8 million settlement pales in comparison to the amount received in 2008.

The case took a dramatic turn when Fabrikant started last summer and the judge authorized U.S. marshals to enter the Fortgang’s residences on Park and Fifth avenues in Manhattan by force if they need to seize their assets.

After the start took place, the attorneys for the Fortgangs immediately battled back and the plaintiffs in the case eventually withdrew their request for the seizure of assets. At the end of the case, the court documents show, the SAT decided that this settlement was the best option. They went through all the aggressive legal defenses which were built up by the Fortgangs and the fact that the family’s assets resulted as worth less than what they originally believed it to be.