ConAgra settling retiree lawsuits

Sat Jul 28, 6:09 PM ET



OMAHA, Neb. - ConAgra Foods Inc. and an insurer have agreed to pay a total of $4 million to settle three retiree lawsuits over restated earnings, the company said.

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ConAgra spokeswoman Stephanie Childs said Friday that under the settlement, which requires approval from a federal court in Omaha, the company also would make undisclosed changes to its benefit plans, the Omaha World-Herald reported.

The lawsuits said retirees lost millions because ConAgra's 401(k) plans were too heavily invested in company stock. The stock price dropped when ConAgra announced in March 2005 that it would restate its earnings because of income tax errors from fiscal 2002 through the first half of 2005.

When the suits were filed in 2005, a ConAgra spokesman said company officials discovered the tax errors and did the right thing by reporting them.

ConAgra, which is based in Omaha, reported the proposed settlement in its fiscal 2007 annual report to the Securities and Exchange Commission.

ConAgra announced in May 2001 that accounting problems at a subsidiary, United Agri Products, would result in $120 million in lower earnings for 1998 through 2000. In 2005, ConAgra agreed to pay $14 million to settle a lawsuit over fictitious sales and misreported earnings at United Agri Products.

That action alleged ConAgra and several of the company's officers and directors violated federal securities laws by misrepresenting the company's financial performance to inflate its stock value. ConAgra sold United Agri Products in 2003.

In February 2001, ConAgra announced that it expected reduced profits for the second half of 2001 because of a tougher business climate and that it was looking at the "impact of accounting changes which the company is currently reviewing."

In the wake of that news, ConAgra's stock plummeted from $24.86 to $20.01 per share.

Childs said settling the retirees' lawsuits would end shareholder and retiree legal actions against ConAgra over the restatements. The rest of the lawsuits have either been settled or dismissed, she said.

Earlier this week, ConAgra said it will pay a $45 million civil fine as part of a settlement with federal regulators who accused the company of using improper accounting in fiscal 1999 through 2001 to help it meet Wall Street expectations.

The company did not admit or deny the SEC charges as part of the settlement.

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ConAgra Foods Inc.: http://www.conagra.com