AIPC settles suit for $25 million
February 13, 2008
by Eric Schroeder
KANSAS CITY — American Italian Pasta Co. announced it has received final approval in federal court in the Western District of Missouri on a $25 million settlement of a securities class-action lawsuit. The company first announced it had agreed to settle the suit on Oct. 29.
U.S. District Judge Ortrie Smith of the Western District of Missouri on Feb. 12 approved the settlement, which resolves federal securities law claims asserted in a consolidated class action filed in August 2005. At the time of the lawsuit filing, several shareholders accused AIPC of "cooking the books" to create an illusion that the company was doing well even as sales slumped. The lawsuits were consolidated into a single class-action suit.
Under terms of the settlement, AIPC’s insurers will pay $11 million in cash, and the company will distribute $14 million worth of its common stock to the class.
The settlement does not include any admission of wrongdoing by AIPC and does not resolve derivative claims asserted in separate lawsuits against the company and some of its former and current officers and directors.