Natural and organic food processor and distributor SunOpta Inc. has proposed an US$11.25 million deal that could settle a number of planned class-action suits against the company stemming from its financial statements from around 2007.
The Brampton, Ont. company says the suits have been filed against it and other defendants on behalf of a “class” of shareholders who bought or otherwise acquired SunOpta securities from Feb. 23, 2007 to Jan. 27, 2008, and are pending before a U.S. District Court in New York and the Ontario Superior Court of Justice.
In return for the dismissal of the class actions and releases from proposed class members of settled claims against the company and the other named defendants, SunOpta said in a release Thursday, its proposed settlement deal provides for a total cash contribution of US$11.25 million to a settlement fund — and for “the adoption of certain corporate governance enhancements by the company.”
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SunOpta said its fund will be “entirely funded by the company’s insurer” and applied toward distributions to the suits’ “class,” once the company’s plan of allocation gets court approval. The fund would also cover plaintiffs’ fees and expenses and other administrative costs associated with the settlement.
SunOpta also stressed that its proposed settlement deal “contains no admission of wrongdoing by SunOpta or any of the other named defendants and the company and the other named defendants expressly deny any liability or wrongdoing in the agreement.”
Law firm Siskinds LLP of Toronto says on its website that its particular suit stemmed from a Jan. 24, 2008 press release from SunOpta. The law firm said the press release disclosed, “among other things, that SunOpta would be required to take certain write-downs in connection with its berry operations.”
Furthermore, the law firm said on its website, “it is alleged in the statement of claim that the defendants falsely represented that certain of SunOpta’s quarterly financial statements from 2007 were compiled in accordance with generally accepted accounting principles.”
Siskinds said its March 2008 lawsuit, claiming $110 million, was filed under Ontario’s Securities Act as per the province’s new investor protection legislation. The law firm’s website, as of Sunday night, had no reaction yet to SunOpta’s proposed settlement.
