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Minneapolis-based retailer and wholesaler Nash Finch Co. yesterday said it signed a Stipulation of Settlement which, if approved by the court, will resolve all claims against the company in the pending putative securities fraud class action.
That class action was filed by the United States District Court for the District of Minnesota after the Nash Finch issued revised earnings guidance on October 20, 2005. The lawsuit challenged the public statements Nash Finch made about the purchase of certain assets from Roundy's Supermarkets, Inc. Nash Finch denied any wrongdoing.
"We believed, and continue to believe, that this case lacks merit and had planned to defend the litigation vigorously," said Alec Covington, president and c.e.o. of Nash Finch. "However, after reaching an accommodation that will be fully covered by our directors and officers insurance and is acceptable to our insurance carrier, we have agreed to the settlement so that we can eliminate the distraction and expense of further litigation. We believe that our shareholders are best served with this matter behind us and our attention focused on our business and the implementation of our strategic plan, Operation Fresh Start."
Pursuant to this settlement, Nash Finch will pay $6.75 million into a settlement fund that will be distributed to all persons who purchased the company's common stock from February 24, 2005, the date it announced the acquisition agreement, through and including October 20, 2005, the date that it announced a downward revision to its earnings guidance for fiscal 2005. The settlement payment will be funded in full by Nash Finch's insurance coverage. Notice of the settlement must be provided to the class and then it is subject to final approval by the Court.
Nash Finch's food distribution business serves independent retailers and military commissaries in 31 states, the District of Columbia, Europe, Cuba, Puerto Rico, the Azores, and Egypt. The company also owns and operates a base of retail stores, primarily supermarkets under the Econofoods, Family Thrift Center, and Sun Mart banners.