Investors sued Boston Chicken, claiming the company included false and misleading financial information in its financial statements that failed to consolidate large losses. Once news of the financial improprieties was made public, the stock value fell and shareholders suffered large losses.
Other defendants are Boston Chicken, Inc., which filed for bankruptcy in 1998, Scott A. Beck and Sadd Nadhir, who were, respectively, president and chairman of the board for Boston Chicken and vice chairman of the board of directors, co-chairman and chief executive officer for Boston Chicken during all or parts of the class period.
The claims against Messrs. Beck and Nadhir are proceeding.
CASE TIMELINE
Defendants Arthur Andersen and an underwriter syndicate led by Merrill Lynch & Co., Deutsche Banc Alex. Brown LLC and Morgan Stanley & Co. Incorporated have settled for a total of $19.4 million. Individual defendant Mark Stephens, formerly Boston Chicken's chief financial officer and vice chairman of the board of directors, also recently agreed to settle.
Notice of the settlement was issued to class members, and all class-member claim forms have been evaluated.
