Reddy Ice Holdings Inc. Case 8/8/2008
April 18, 2012 (Update) -- Reddy Ice Holdings Inc., has reached a tentative $1 million settlement with shareholders.
The proposed settlement comes right after Reddy Ice filled bankruptcy in Texas last week, and threatened to disallow the class action.
According to the Notice:
On April 12, 2012, Reddy Ice Holdings, Inc. (“Reddy Ice”) and Reddy Ice Corporation (together with Reddy Ice, the “Debtors”) filed voluntary petitions in the Bankruptcy Court for the Northern District of Texas (the “Bankruptcy Court” or “Court”) for relief under Chapter 11 of the Bankruptcy Code. Please be advised that a cash settlement of $1,000,000 (“Settlement Fund”) has been obtained in the securities class action titled John Chamberlain, individually and on behalf of all others similarly situated, v. Reddy Ice Holdings, Inc., et al., Civil Action No. 2:08-cv-13451 (E.D. Mich.), which action has been transferred to the Bankruptcy Court under the Case Nos. 12-32349 and 12-32350 for purposes of approving and administrating the Settlement, and ultimately distributing the Settlement Fund to the Class in the securities class action, in conjunction with other matters affecting the Reddy Ice bankruptcy estate. The balance of the Settlement Fund after payment of Court-approved attorneys’ fees and expenses, the costs of claims administration and any taxes (“Net Settlement Fund”), will be divided among Class Members who submit timely and valid claim forms to the claims administrator for the Debtors, Kurtzman Carson Consultants LLC (the “Claims Agent”), and are approved for payment from the Net Settlement Fund (“Authorized Claimants”) pursuant to a Court-approved Plan of Allocation.
August 8, 2008 -- the complaint charges Reddy Ice (NYSE:FRZ) and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Reddy Ice is the largest manufacturer and distributor of packaged ice in the United States.
Specifically, the complaint alleges that during the Class Period, defendants issued a series of materially false and misleading statements concerning the Company’s financial performance and prospects. According to the complaint, from at least 2002 to the present, defendants engaged in a continuing agreement, understanding and conspiracy in restraint of trade to artificially raise, fix, maintain or stabilize prices for packaged ice in the United States in violation of §1 of the Sherman Act, 15 U.S.C. §1. Moreover, defendants divided up the packaged ice market so that they would not compete with other packaged ice makers, such as Arctic Glacier International, Inc. and Home City Ice Co. Specifically, the complaint alleges that Reddy Ice failed to disclose that (a) the Company was recognizing significant amounts of revenues derived from illegal activities in violation of the U.S. antitrust laws; and (b) as a result, the Company’s financial statements were not a fair presentation of Reddy Ice’s results and were presented in violation of U.S. Generally Accepted Accounting Principles and U.S. Securities and Exchange Commission rules.
On March 6, 2008, after the markets closed, Reddy Ice issued a press release announcing that “federal officials executed a search warrant at the Company’s corporate office in Dallas on March 5, 2008.” Upon this news, on the next trading day, shares of the Company’s stock fell $7.73 per share, or 33%, to close at $15.38 per share, on heavy trading volume.