ST. LOUIS — Post Holdings, Inc. on Dec. 8 said it has reached an agreement to settle all class claims (asserted by direct purchasers of shell eggs) against Michael Foods, Inc. with a $75 million payment.
The claims stem from a class action lawsuit filed in 2008 in federal court in the Eastern District of Pennsylvania, which predates Post’s ownership of Michael Foods, which was completed in June 2014.
|Rob Vitale, president and c.e.o. of Post|
“While we remain confident that our conduct has at all times been lawful and entirely appropriate, we believe this settlement is in the best interest of our shareholders, employees, customers and consumers because it effectively eliminates the distraction, expense and exposure of this complex litigation,” said Rob Vitale, president and chief executive officer of Post.
Post said it expects to record a pre-tax charge in the first quarter of its fiscal year 2017 for the settlement of the claims. The charge will be treated as an adjustment for purposes of calculating adjusted EBITDA and other non-GAAP measures, the company said. Under current law, the settlement is deductible for federal income tax purposes.
The terms of the settlement must be formally documented and are subject to approval by the court following notice to all class members, and while Post said it expects the settlement will receive the needed approval, the company indicated that there can be no assurance that the court will approve the agreement as proposed by the parties.“This settlement does not affect the action filed on behalf of indirect purchasers of shell eggs (who were unsuccessful in class certification), or dismissed claims by direct purchasers of egg products (which dismissal is being appealed),” the company said.