Chiquita settles shareholder suits

[Judi Lynn]

Thursday, January 7, 2010, 10:52am EST
Chiquita settles shareholder suits

Chiquita Brands International Inc. has reached a settlement with shareholders who sued the company following its 2007 guilty plea to charges that it financed terrorist organizations in Colombia. Notice of the settlement was filed in U.S. District Court in South Florida Wednesday.

Chiquita revealed in an SEC filing in October that it had reached an “agreement in principal” to settle four shareholder lawsuits filed in 2007. Those lawsuits alleged Chiquita officers breached their fiduciary duties to shareholders and wasted company resources by getting entangled in the Colombian payments.

The proposed settlement calls for “the adoption of certain governance and compliance changes by the company, as well as payment of attorneys’ fees to plaintiffs’ counsel in an amount that it is not material,” Chiquita said in its third quarter report to shareholders. Chiquita spokesman Ed Loyd declined to elaborate on the terms of the settlement, which he described as “favorable” to the company. He stressed that the deal requires court approval to be final.

The shareholder settlements do not impact several other lawsuits filed by Colombian citizens whose family members were killed by the paramilitary groups Chiquita admitted paying over a 15-year period. Plaintiff attorney Terry Collingsworth has estimated those cases could cost Chiquita more than $1 billion, but the company says the suits are without merit and that dozens of similar suits have been brought against other U.S. corporations but none have resulted in a judgment in favor of plaintiffs.

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