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HARRISBURG, Pa. - Rite Aid Corp.'s former chairman and CEO has agreed to pay $1.45 million to settle a lawsuit in which shareholders allege the drugstore chain's books were cooked over a 30-month period.
Martin L. Grass, who was forced out of the company in 1999 and is facing federal criminal fraud charges stemming from the financial statements, did not admit wrongdoing in the civil suit, according to his attorney.
The money contributed by Grass brings the settlement fund to about $319.6 million. Grass was the last holdout among the parties named in a complaint filed by shareholders who bought Rite Aid stock between May 2, 1997 and Nov. 10, 1999.
Camp Hill, Pa.-based Rite Aid agreed in November 2000 to pay $193 million, and KPMG, its former accountant, agreed to pay $125 million.
In December 1999, Rite Aid's new management team said the company overstated its earnings by $1.6 billion in the late 1990s. Its stock, which traded as high as $50.94 in 1999, closed yesterday at $2.65 on the New York Stock Exchange, down one cent.