Central European Distribution Corporation

Central European Distribution Corporation

Central European Distribution Corporation Securities Settlement

The lawsuit was settled for $10 million in cash. The following is a summary of the proceedings in this lawsuit: ‘On June 8, 2012, Jeffrey Grodko filed a class action complaint against the Individual Defendants and Central European Distribution Corp. in the United States District Court for the Southern District of New York, alleging violations of the federal securities laws. On August 7, 2012, the Puerto Rico System of Annuities and Pensions for Teachers (PR Teachers) filed a class action complaint in the same court asserting similar claims. On September 4, 2012, by agreement of the parties, both actions were transferred to the District of New Jersey where, on November 8, 2012, the Court consolidated the two cases. On December 17, 2012, the Court appointed PR Teachers as Lead Plaintiff and Robbins Geller Rudman & Dowd LLP as Lead Counsel. On February 15, 2013, Lead Plaintiff filed an amended complaint (the Amended Complaint) against the Individual Defendants and the Company. On April 7, 2013, CEDC filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. As a result, the Action was stayed as to CEDC but continued against the Individual Defendants. The Amended Complaint asserts claims under §§10(b) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. §§78j(b), 78t(a) and 78t(b)) and Rule 10b-5 promulgated thereunder (17 C.F.R. §240.10b-5). On April 17, 2013, the Individual Defendants moved to dismiss the Amended Complaint. Lead Plaintiff opposed the motion. On October 14, 2013, the Settling Parties attended a mediation session with the Honorable Daniel Weinstein (Ret.), and although no agreement was reached, the parties continued their negotiations with the assistance of the mediator. As a result of those further discussions led by the mediator, on November 18, 2013, the Settling Parties reached an agreement-in-principle to resolve the Action. The Court terminated the pending motion to dismiss pending execution of formal settlement papers and judicial approval of the Settlement.’

 

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