Kansas City, MO: (May-22-08) A class action shareholder lawsuit was brought against Ernst & Young, over issues pertaining to the fiscal health of American Italian Pasta Co. Court documents showed that several other suits had been brought against the Kansas City-based pasta maker, its directors and various officers and Ernst & Young beginning in mid-2005, which claimed that they violated securities laws. Later, all these actions were consolidated into a class action lawsuit in early 2006. That suit alleged that the company, its officers and directors, as well as Ernst & Young, its audit firm issued false and misleading statements in regards to the financial status of the company.
Sources stated that American Italian agreed to settle most of those claims with a payout of $25 million to shareholders who are a part of the class. The deal stated that the class covers all shareholders who bought stock in American Italian on or after Jan. 23, 2002, and held onto the shares on Aug. 9, 2005; and those who bought stock on or after Aug. 10, 2005, and held the shares as of Aug. 17, 2005. In a recent announcement, Ernst & Young officials claimed that it has settled its part of the class action shareholder lawsuit by paying $3.5 million before expenses to affected stockholders. [
