A settlement was expected Thursday in the federal lawsuit over the stabbing death of a student at the hands of a former Landisville man at a meditation-based school in Iowa.

Shuvender Sem, a 1997 Lancaster Country Day School graduate, stabbed to death Levi Butler in the dining hall of Maharishi University of Management in Fairfield, Iowa, on March 1, 2004.

Sem, who had stabbed another student earlier the same day, was later found not guilty by reason of insanity.

The federal lawsuit filed in February 2006 on behalf of Butler's estate accused the school, founded by Indian guru Maharishi Mahesh Yogi and requiring twice-daily transcendental meditation, of gross negligence for not preventing the student's death.

Steve Eckley, an attorney representing the estate, said Butler's family is satisfied with the terms of the confidential settlement, which were reached late Wednesday night. The terms still needed to be approved by one official with the university's insurance company.

Trial in the case had been scheduled to begin Monday in U.S. District Court in Des Moines.

In the lawsuit, Butler's estate said the 24-year-old Sem was a paranoid schizophrenic with a long history of violent assault. It noted that the same day Butler was killed, Sem attacked another student, John Killian, by stabbing him in the face with a ball-point pen.

"Had defendants followed their own stated policy of reporting all serious crime to local authorities, Shuvender Sem would have been arrested after the attack on John Killian, and Levi Butler would be alive today," the lawsuit said.

After the attack on Killian, the lawsuit said Sem was placed in the custody of Joel Wysong, the school's dean of men.

The suit claimed, though, that Wysong left Sem alone for a time and reported hearing Sem rummaging through kitchen drawers. That's where Sem was believed to have found the knife used to kill Butler, of Riverside County, Calif.

In 2004, Sem's father, Surinder Kumar Sem, also of Landisville, said his son is a diagnosed schizophrenic in denial about his illness and not regularly taking his medication.

"It worried me, but I never thought something like this would happen," the elder Sem said in August 2004.

Sem also said his son had no memory of the stabbings.