Fund firms seeking a clear-cut ruling on the potential liabilities for fund directors may have to keep waiting. Last evening Franklin Resources said that a proposed settlement it offered in a class action had met with preliminary approval of the court hearing the case.

The proposed settlement would cost Franklin $6.5 million. That figure would include $2 million to be paid directly into the two closed-end funds that are a part of the case (Templeton Vietnam and Southeast Asia Fund), other claims to former shareholders and all legal fees.

Franklin explained that it agreed to settle the case to avoid the costs of further litigation.

The case, known as "Templeton Securities Litigation" is before the U.S. District Court for the Southern District of Florida.

Shareholders brought the case against the funds' directors after manager Mark Mobius allegedly purchased securities outside of the fund mandates. The shareholders claimed that the directors failed in their obligations to oversee the funds.  

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