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In re Central European Distribution Corp. Securities Litigation - Background and Settlement Information

The Class in this Action includes all Persons who purchased CEDC common stock between March 1, 2010 and February 28, 2011, inclusive, who were damaged thereby.

On October 24, 2011, the Steamfitters Local 449 Pension Fund filed a class action complaint against Mr. Carey, Christopher Biedermann, and Central European Distribution Corp. in the United States District Court for the District of New Jersey, alleging violations of the federal securities laws. On November 15, 2011, Tim Schuler filed a class action complaint in the same Court asserting similar claims. On August 22, 2012, the Court consolidated the two cases and appointed Arkansas Public Employees Retirement System and Fresno County Employees' Retirement Association as Lead Plaintiffs and Cohen Milstein Sellers & Toll PLLC as Lead Counsel. On February 19, 2013, Lead Plaintiffs filed an amended complaint (the "Amended Complaint") against Mr. Carey and the Company. On April 7, 2013, CEDC filed a voluntary petition for relief under Chapter 11 of Title 11 of the United States Code in the United States Bankruptcy Court for the District of Delaware. As a result, the Action was stayed as to CEDC but continued against Mr. Carey. The Amended Complaint asserts claims under Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (15 U.S.C. § §78j(b) and 78t(a)) and Rule 10b-5 promulgated thereunder (17 C.F.R. § 240.10b-5).

On April 22, 2013, Mr. Carey moved to dismiss the Amended Complaint. Lead Plaintiffs opposed the motion.

On October 14, 2013, the Settling Parties attended a mediation session with the Honorable Daniel Weinstein (Ret.), and although no agreement was reached, the parties continued their negotiations with the assistance of the mediator. As a result of those further discussions led by the mediator, on December 6, 2013, the Settling Parties reached an agreement-in-principle to resolve the Action. The Court terminated the pending motion to dismiss pending execution of formal settlement papers and judicial approval of the Settlement.

The Individual Defendants have denied and continue to deny that they have violated the federal securities laws or any laws or have otherwise misled investors as alleged in the Action. The Individual Defendants have denied and continue to deny specifically each and all of the claims and contentions alleged in the Action, along with all charges of wrongdoing or liability against them arising out of any of the conduct, statements, acts or omissions alleged, or that could have been alleged, in the Action. The Individual Defendants also have denied and continue to deny, inter alia, the allegations that any of the Individual Defendants made any material misstatements or omissions; that any member of the Class has suffered damages; that the prices of CEDC common stock were artificially inflated by reason of the alleged misrepresentations, omissions, or otherwise; that the members of the Class were harmed by the conduct alleged in the Action; or that the Individual Defendants knew about or were reckless with respect to the alleged misconduct. In addition, the Individual Defendants maintain that they have meritorious defenses to all claims alleged in the Action.

Nonetheless, taking into account the uncertainty, risks, and costs inherent in any litigation, especially in complex cases such as this Action, the Individual Defendants have concluded that further conduct of the Action could be protracted, burdensome, expensive, and distracting. The Individual Defendants have, therefore, determined that it is desirable and beneficial to them that the Action be settled in the manner and upon the terms and conditions set forth in the Settlement Agreement. The Settlement Agreement shall in no event be construed as or deemed to be evidence of an admission or concession by the Individual Defendants or the Released Persons with respect to any claim of any fault or liability or wrongdoing or damage whatsoever.

The proposed Settlement in this Action creates a fund in the amount of One Million One Hundred and Fifty Thousand Dollars ($1,150,000.00) in cash and will include interest that accrues on the fund prior to distribution (the "Settlement Fund"). The Settlement Fund, less costs, fees, and expenses (the "Net Settlement Fund"), will be divided among all eligible Class Members who submit timely and valid Proof of Claim forms to the Claims Administrator ("Authorized Claimants").

The Court appointed the law firm of Cohen Milstein Sellers & Toll PLLC to represent you and other Class Members. These lawyers are called Lead Counsel. These lawyers will apply to the Court for payment from the Settlement Fund; you will not otherwise be charged for their work.  If you want to be represented by your own lawyer, you may hire one at your own expense.

Although the information in this website is intended to assist you, it does not replace the information contained in the Court approved Notice of Pendency and Proposed Settlement of Class Action and  Stipulation of Settlement for this Action, both of which can be found and downloaded by clicking on the "Proof of Claim & Other Documents" tab above. We recommend that you read the Notices for each Action and other relevant case documents carefully.