A restaurant operating company recently announced that it came to a securities class action settlement agreement with its shareholders.
Chanticleer Holdings, Inc., noted that the lawsuit named Francis Howard v. Chanticleer Holdings, Inc., Michael D. Pruitt, et al., was settled on March 31, 2014. This will give shareholders a total of $850,000 in settlement money. XL Specialty Insurance Company, the company's insurance carrier, will take care of $837,500, while the remaining $12,500 will be spent by Creason and Associates, PLLC.
The deal still needs to be approved by the U.S. District Court for the Southern District of Florida. If this transaction is deemed valid, it will further dismiss all actions related to the lawsuit against the company.
"We are pleased with this agreement, which will put this matter behind us, so that we may focus our attention on growth," said Mike Pruitt, CEO and president of Chanticleer Holdings. "We look forward to opening our scheduled Hooters and Just Fresh locations in the coming months as we continue expanding in both international and domestic markets."
Lawsuit filed in 2012
The company received the class action claim initially in 2012, as Holzer Holzer and Fistel, LLC, made the filing in the aforementioned court. This was for the class period between June 21, 2012, and Sept. 10, 2012.
The allegations around the company included its leaders making statements that were both false and misleading about performance that helped the stock to rise to levels that were unnaturally inflated. The firm's leaders initially told investors that it held an audit for its South African operations, which it then noted on Sept. 10, 2012, that this was not the case.
The firm had a secondary public offering on June 21, 2012.
Second lawsuit revealed further details
Another law office noted that it filed litigation in 2012 against the company, shedding more light on the situation for shareholders.
The Rosen Law Firm filed the lawsuit when the initial allegations surfaced two years ago, noting that there were issues with the company's audits that were not in-line with public statements. The law office noted further that the company had not only announced audits for its South African business, but also other business ventures. These statements were eventually retracted by the company, which caused Nasdaq to pause the company's trading in late-2012.