On September 28, 2016, Chief Judge Jerome B. Simandle of the United States District Court for the District of New Jersey issued an order approving the distribution of the net settlement proceeds in In re Central European Distribution Sec. Litig., No. 11-cv-06247 (D.N.J.). This order came after the Court issued the final judgment and order of dismissal with prejudice on November 14, 2014, granting final approval of a proposed all-cash settlement for $1,150,000 between Lead Plaintiffs, Arkansas Public Employees Retirement System and the Fresno County Employees’ Retirement Association, and Defendant William V. Carey, former CEO of Central European Distribution Corporation (NASDAQ: CEDC) (“CEDC”). The Court’s final approval of the settlement resolved securities fraud claims asserted under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended by the Private Securities Litigation Reform Act (the “PSLRA”).
The settlement benefits a class of investors who purchased or otherwise acquired securities of CEDC between August 5, 2010 and February 28, 2011. Cohen Milstein serves as Lead Counsel in this class action.
CEDC is a global business that operates primarily in the alcoholic beverage industry. The lawsuit alleged that the Company misled investors by misrepresenting its business prospects, especially with regard to its business in Poland. Lead Plaintiffs claim that CEDC failed to timely disclose material information to investors, including declines in its vodka portfolio, especially in Poland, and negative financial results from the launch of Zubrowka Biala, a new vodka product. On March 1, 2011, the Company issued a press release announcing financial results for 2010 reporting net losses exceeding $90 million, shocking investors. According to the complaint, the Company’s stock fell more than 37%, down more than $8.50 per share.
Because of the discovery stay imposed by the PSLRA, which bars discovery until after a lead plaintiff prevails against a defendant’s motion to dismiss, Cohen Milstein conducted a substantial pre-filing fact investigation into the Class’ claims against CEDC. Cohen Milstein attorneys reviewed numerous U.S. Securities and Exchange Commission filings and public statements made by CEDC and its officers as well as Company publications, researched market data and various news reports, and conducted interviews in English and in Polish with various fact witnesses located in Poland. After Cohen Milstein filed an amended complaint on behalf of Lead Plaintiffs, and before defendants responded, CEDC declared bankruptcy in April 2013 by seeking relief under Chapter 11 of the United States Bankruptcy Code, resulting in a temporary stay of this class action as to CEDC. The Court lifted the stay on April 19, 2013, but only did so with regard to the individual defendants and not the Company. Once litigation resumed, the parties engaged in negotiations to explore potential settlement. These negotiations culminated in the exchange of mediation briefing and participation in an all-day mediation on October 14, 2013. Cohen Milstein’s efforts to pursue Lead Plaintiffs’ claims and obtain adequate relief for the Class ultimately resulted in the $1,150,000 all-cash Settlement that received final approval by the Court on April 29, 2016. Cohen Milstein is currently overseeing the implementation of the Court-approved Plan of Allocation.
Lead Plaintiffs are represented by Daniel S. Sommers, Michael Eisenkraft, and S. Douglas Bunch, all of Cohen Milstein.