4 Shareholder Lawsuits Against Craft Brew Alliance Dropped

Four lawsuits claiming that Craft Brew Alliance (CBA) omitted “material information” from a proxy statement related to the craft beer maker’s planned merger with Anheuser-Busch InBev have been dropped after the Portland, Oregon-headquartered company filed a supplemental report, according to a U.S. Securities and Exchange Commission filing on Tuesday.

The lawsuits were each similar in nature, filed by shareholders either on behalf of a class or an individual, claiming that the omission of certain information rendered the proxy statements false and misleading in violation of the Securities Exchange Act.

The four lawsuits include:

  • Kost et. al. v. Craft Brew Alliance in the Superior Court of Washington
  • Sabatini et al. v. Craft Brew Alliance in the U.S. District Court for the District of Delaware
  • Halberstam v. Craft Brew Alliance in the U.S. District Court for the Central District of California (individual shareholder)
  • Michael Roberts et. al. v. Craft Brew Alliance in the U.S. District Court for the District of Delaware

Two other similar lawsuits — Birkby et al. v. Craft Brew Alliance Circuit Court of the State of Oregon and Dennis Roberts v. Craft Brew Alliance in the U.S. District Court for the District of Colorado — remain unresolved.

In Tuesday’s filing, CBA said it believes the claims in all of the lawsuits “are without merit and that no supplemental disclosure is required under applicable law.”

Nevertheless, the company said it was voluntarily filing a supplement to the proxy statement in an effort to “moot unmeritorious disclosure claims, to avoid the risk of the actions delaying or adversely affecting the Merger and to minimize the costs, risks and uncertainties inherent in litigation, without admitting any liability or wrongdoing.”

The additional disclosures led to plaintiffs in Kost, Sabatini, Halberstam, and Michael Roberts agreeing to dismiss their individual claims with prejudice, meaning those claims have been permanently dismissed.

The plaintiffs in Kost, Sabatini, and Michael Roberts also agreed to dismiss their class claims without prejudice, meaning those claims could be refiled at a later date.

CBA reiterated that it “denies all allegations in the actions, including allegations that any additional disclosure was or is required, and believes that the supplemental disclosures contained herein are immaterial.”

The company, whose brands include Kona, Redhook, Widmer Brothers, Wynwood, Cisco Brewers, Appalachian Mountain Brewery, Omission, Square Mile Cider and the pH Experiment — added that the resolution of four of the six lawsuits would not affect a scheduled shareholder vote on February 25 or the amount of consideration to be paid to shareholders via the merger. The results of that vote are required to be shared within four business days.

Earlier this month, CBA and A-B announced that the U.S. Department of Justice was seeking additional information and documentation about the merger, which was first announced on November 11. That transaction, as well as the qualifying offer that never came to fruition before it, have long been covered.

CBA chief financial and strategy officer Christine Perich addressed the request in a February 14 email to employees, calling the request “standard” and added that the company is “working with regulators to respond.”

Perich also acknowledged next week’s shareholder meeting. She wrote that the meeting is “a formality” for many shareholders who already cast their votes based on the instructions in the proxy.

Meanwhile, Perich wrote that leaders from A-B and CBA met in Miami in early February “to kick off integration planning,” learn about both organizations and introduce the teams.

As of press time Wednesday, CBA stock (BREW) was trading at $16.24, up slightly over its previous close.

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