Casino's Cnova reaches $28.5 mln settlement in U.S. over IPO

Cnova NV

22/09/2017 18:35

By Jonathan Stempel 
    NEW YORK, Sept 22 (Reuters) - Cnova NV  CNV.PA , the 
e-commerce arm of French retailer Groupe Casino, agreed to pay 
$28.5 million to settle litigation in the United States claiming 
it defrauded investors in connection with its November 2014 
initial public offering. 
    The all-cash, preliminary settlement was filed on Friday 
with the U.S. District Court in Manhattan, and it requires a 
judge's approval. 
    It resolves claims that Cnova inflated its share price by 
overstating net sales and profit, failed to properly write down 
the value of damaged and returned items and concealed employee 
misconduct and accounting irregularities at a Brazilian unit. 
    Cnova denied wrongdoing and liability but settled to avoid 
the risks and costs of litigation, which sought class action 
status, court papers show. 
    The plaintiffs are led by Jaideep Khanna and Michael 
Schwabe, and their law firm Brower Piven plans to apply for 
legal fees of up to one-third of the settlement fund, court 
papers show. 
    Cnova had gone public at $7 per share, but its share price 
had fallen by about two-thirds by the time litigation began. 
    The Netherlands-based company in December 2015 announced an 
investigation into inventory mismanagement at Brazilian 
warehouses, and two months later told investors they could no 
longer rely on some of its financial statements. 
    Cnova was delisted from Nasdaq in March, after Casino 
tendered for nearly all its outstanding shares in the United 
States, regulatory filings show. 
    The case is In re Cnova NV Securities Litigation, U.S. 
District Court, Southern District of New York, No. 16-00444. 
 
 (Reporting by Jonathan Stempel in New York; Editing by Cynthia 
Osterman) 
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters 
Messaging: jon.stempel.thomsonreuters.com@reuters.net)) 
 
Keywords: CNOVA SETTLEMENT/