WEST PALM BEACH, Fla. (AP) — U.S. Sugar Corp. and employee shareholders of the nation's largest cane sugar producer have agreed on a settlement to a lawsuit that claimed the company's board failed to inform shareholders of two lucrative buy-out offers, then rejected the deals.
U.S. District Judge Donald Middlebrooks on Friday granted preliminary approval of the settlement of the suit against the company. He set a January hearing for final determination.
The federal suit was filed in January 2008 on behalf of more than 4,000 current and former U.S. Sugar employees. They originally sought $150 million.
The preliminary agreement calls for U.S. Sugar to initially pay $8.4 million. If a planned $536 million deal with the state of Florida goes through to buy 73,000 acres of farmland from the company, U.S. Sugar then would pay plaintiffs an additional $7.5 million, according to the preliminary agreement.
U.S. Sugar is a privately held company owned largely by its employees and former employees who had about 38 percent of its shares in 2005, according to the federal class-action lawsuit filed in West Palm Beach.
Employees can only sell their shares back to the company, which had been offering up to $204 per share, the lawsuit said.
But in 2005, U.S. Sugar was offered $575 million to sell the business, or about $293 per share, a deal soundly rejected by its board a year later, according to the lawsuit. The same deal was rejected again in 2007, yet employee shareholders were never told about either offer, the lawsuit said.
U.S. Sugar said in a statement it has admitted no wrongdoing in agreeing to the settlement.
"We are very pleased that this issue is behind us," said U.S. Sugar Vice President Robert Coker.
An attorney for the plaintiffs, Curt Miner, expressed satisfaction.
"We think it's a very good settlement," Miner said Friday.
The company farms about 160,000 acres around the Everglades and produces about 700,000 tons of sugar annually. It is currently working on a deal with the state to sell 73,000 acres of land for Everglades restoration efforts.
Florida wants to use the property to build reservoirs and treatment marshes intended to clean water and restore natural flow through the Everglades, which has been damaged by years of dikes and flood control diversions to make way for farms and homes.