The settlement obtained preliminary approval on November 17, 2008. A settlement fairness hearing has been scheduled for March 26, 2009.
On November 7, 2008 plaintiffs filed a Stipulation of Settlement and motions for preliminary approval. In exchange for dismissal of all claims against it, the Company and its officer defendants agreed to pay $6 million, to be funded through the Company's insurer. This settlement will resolve litigation in both the US District Court and the Canadian Provincial Courts. Lawyers in both countries have requested an aggregate of $1.5 million in fees. According to the Company's 10-Q filed on the same day of the settlement announcement, negotiations had been ongoing since the first quarter of 2008.
According to the docket, discovery continues as of August 20, 2008.
As disclosed by the Company’s FORM 10-Q for the quarterly period ended September 24, 2006, beginning in May 2005, several purported class action lawsuits were filed in the United States and Canada, including Federal courts in Delaware and Colorado and provincial courts in Ontario and Québec, alleging, among other things, that the Company, including Molson Inc., and certain officers and directors misled stockholders by failing to disclose first quarter (January-March) 2005 U.S. business trends prior to the Merger vote in January 2005. The Colorado Federal case has been transferred to the Delaware Federal court. The Delaware Federal lawsuits also allege that the Company failed to comply with U.S. GAAP. Defendants have filed motions to dismiss, which have not yet been ruled on.
The complaint alleges that in order to get the necessary shareholder approval for the merger between Coors and Molson, defendants failed to disclose, in press releases and Proxy Statement(s), that: (i) At the time the merger closed on or about February 9, 2005, which was well into the first fiscal quarter of 2005, Coors was not operating according to plan and had experienced material adverse changes in its business; and (ii) at the time of the merger, defendants had violated the terms of the merger agreement and Proxy/Prospectus by failing to disclose that Coors's business was being, and foreseeably would continue to be, adversely impacted by conditions that were causing Coors to perform well below plan and consensus estimates. Defendants concealed these material facts because it enabled them to effectuate the merger in a manner that allowed the relatives and heirs of the Coors and Molson families to dominate the combined Company, as detailed in the complaint.
The complaint further alleges that on or around April 28, 2005, only weeks after the merger closed, before the open of trading, defendants published a release announcing disappointing results for the Company's first quarter of 2005. Immediately following publication of this release, shares of the Company fell precipitously, almost $14.50 per share, to $63.00 per share, a decline of almost 20%, a testament to investors' surprise and disappointment in the results.