Bakery Settlement Gets Preliminary Nod
Wednesday May 11, 3:53 pm ET
Judge Gives Preliminary Nod to Interstate Bakeries $18 Million Class-Action Settlement
KANSAS CITY, Mo. (AP) -- A federal judge has given preliminary approval to an $18 million settlement proposed by Interstate Bakeries Corp., the bankrupt maker of Wonder Bread and Twinkies, to end a class-action lawsuit brought against it by shareholders.
ADVERTISEMENT
In a ruling filed Monday in U.S. District Court of Western Missouri, Judge Fernando Gaitan Jr. said he accepted the settlement. He scheduled an Aug. 26 hearing of arguments from shareholders opposed to the agreement and to determine attorneys' fees.
The class covers all shareholders who owned Interstate Bakeries stock between April 2, 2002, and April 8, 2003.
The plaintiffs claim company officials intentionally misled investors during a September 2002 conference call by saying snack-cake sales were rebounding. Several executives sold $16 million worth of stock after the conference call, and when the company reported in December that sales continued to fall, the stock lost 35 percent of its value.
The company denies wrongdoing.
Interstate Bakeries disclosed the settlement in securities filings last year and signed the agreement on Sept. 21, a day before filing for Chapter 11 bankruptcy protection from creditors. In the settlement, Interstate Bakeries would pay $3 million and its insurers would pay the rest.
The settlement has been on hold while both sides waited for U.S. Bankruptcy Judge Jerry Venters, who is overseeing the bankruptcy case in Kansas City, to allow the settlement to go forward.
Gaitan said class members would be treated as unsecured claims against the company. In its bankruptcy filing, the company said it had around 500,000 creditors.
Gaitan also ordered the plaintiff's attorneys to mail notices to all known class members and publish notices in national newspapers and on the Web sites of the law firms and Interstate Bakeries.
Email Story
Set News Alert
Print Story
Caspermick
"TOUGH TIMES NEVER LAST BUT TOUGH PEOPLE DO."
God Bless America
In Gambling,,,Playing Card Games. Ya Never Know What The Next Hand Will Look Like.
Ten Bagger Potential Stock
AI
