Chiquita Reaches Proposed Settlement

We have been following the Chiquita Brands International, Inc. (“Chiquita”) case since August 2007.  The last post concerned plaintiffs’ opposition to Chiquita’s motion to dismiss.  The parties to the suit recently informed the court that they have settled the case.

The parties attempted mediation on October 5, 2009.  In a report filed on October 9, 2009, the Special Litigation Committee of Chiquita Brands International, Inc. (“SLC”) noted that this mediation did not result in a negotiated solution.  Despite the unsuccessful mediation, the parties continued to discuss a possible settlement and, apparently, successfully reached an agreement.  While details of their deal are not known, on January 5, 2010 the plaintiffs and SLC jointly filed a Notice of Settlement.  Plaintiffs will agree to settle the derivative action and pending shareholder derivative lawsuit in the Ohio Court of Common Pleas.

The parties also intend to file a motion pursuant to Federal Rules of Civil Procedure 23.1 seeking the Court’s approval of a future settlement.  The parties have not disclosed the terms of their settlement, though the Notice does insinuate that some negotiation may remain.  It states that the potential settlement is dependent on the resolution of a  settlement agreement.

In addition, there have been some procedural developments.  On Dec. 23, 2009, the District Court filed an order addressing the parties’ dispute over amending the complaint.  The court rejected Chiquita’s position that the court should apply Rule 15(a) to preclude plaintiffs from filing an amended complaint as a matter of course prior to the court’s ruling on the pending Rule 12(b)(6) motion.  In the December order, the court stated that any amended complaints must be filed by February 26, 2010.  In all other cases, amended complaints may only be filed with the opposing party’s consent or court’s leave.

The primary materials for this post can be found on the DU Corporate Governance website.