According to the Company’s FORM 10-Q for the quarterly period ended March 31, 2001, on January 16, 2001 the Company announced that it reached a preliminary agreement to settle the securities class action and derivative lawsuits pending against the Company and its former management team in the U.S. District Court in the Northern District of California. On March 1, 2001, Stipulations of Settlement for the Securities class action and derivative lawsuits were entered into in the U.S. District Court in the Northern District of California to fully resolve, discharge and settle the claims made in each respective lawsuit. On May 11, 2001, the United States District Court for the Northern District of California approved the settlement. Under the terms of the agreement, Aurora will pay the class members $26 million in cash and $10 million in common stock of the Company. The cash component of the settlement will be funded entirely by the Company's insurance.

During 2000, the Company was served with eighteen complaints in purported class action lawsuits filed in the U.S. District Court for the Northern District of California. On April 14, 2000, certain of the Company's current and former directors were named as defendants in a derivative lawsuit filed in the Superior Court of the State of California, in the County of San Francisco, alleging breach of fiduciary duty, mismanagement and related causes of action based upon the Company's restatement of its financial statements. The case was then removed to federal court in San Francisco.

The complaint charges Aurora and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Aurora produces and markets brand name food products. The Company's products include Mrs. Butterworth's and Log Cabin syrup, Duncan Hines baking mixes, Van de Kamp's and Mrs. Paul's frozen seafood, Aunt Jemima frozen breakfast products, and Celeste frozen pizza. During the Class Period, Aurora issued false financial results and made false statements about its results causing its stock to trade at artificially inflated levels. Then on February 17, 2000, Aurora admitted that its 1999 results had been false, that its previously reported profit converted into a loss and that its top four officers had "resigned." On these shocking disclosures, Aurora's stock trading was halted, after last trading at $7-5/16. Then, when trading resumed on February 22, 2000, Aurora's stock collapsed to $3-1/2.