The press release from TreeHouse Foods, Inc. details a stipulation of settlement in a legal action filed by Scott Wells and the City of Ann Arbor Employees’ Retirement System against the company. The action, filed in 2016 and 2019, alleged breaches of fiduciary duties and other violations of law by certain current and former officers and directors of the company.
The litigation history shows a series of legal motions, appeals, and mediation efforts that ultimately led to a settlement agreement. The Securities Class Action, filed in federal court, resulted in a $27 million settlement funded by the company's directors’ and officers’ insurance, with no monetary outlay by the company or the individual defendants.
As part of the settlement, TreeHouse Foods, Inc. agreed to adopt corporate governance reforms, including enhancements to the Office of the General Counsel, the Disclosure Committee, the Confidential Whistleblower Program, and the Director Education Policy. The settlement also confirmed that the Securities Class Action settlement was fully funded with proceeds from the company’s Directors’ & Officers’ insurance, with no monetary outlay by the company.
The press release states that the settlement confers substantial benefits on TreeHouse and its stockholders, addressing the claims at issue in the action. Additionally, the company's board passed a resolution acknowledging that the independent non-defendant members of the board have unanimously approved the settlement.
Each of the defendants has denied the claims and contentions alleged in the action. Nonetheless, in order to eliminate the burden, expense, and risks inherent in the litigation, the defendants have concluded that it is desirable for the action to be fully and finally settled.
The press release does not contain specific financial figures or metrics related to the settlement or the company's performance. Today the company's shares have moved 1.9% to a price of $33.63. For more information, read the company's full 8-K submission here.
