Container ship
Former investors in CP Ships Ltd. are being asked to sign up for a piece of a settlement in class-action lawsuits against the company that was filed after it overstated its profits and faced allegations of illegal insider trading.
According to a statement Monday from Siskinds LLP, which acted for the plaintiffs in the Ontario proceedings, the $12.8-million deal is not an admission of wrongdoing.
But it appears to bring to an end the tale of CP Ships, which was sold in a friendly takeover to Germany's TUI AG in 2005.
In August, 2004, CP Ships said it had overstated its 2003 earnings, blaming accounting discrepancies. Its stock sank by more than 20 per cent.
Then, in December, 2004, CP Ships acknowledged that four of its executives sold stock in the firm with advance knowledge of the bookkeeping issue.
Among them was then-chairman Ray Miles, who, partly by exercising stock options, made a $3.5-million profit in May, long before the August announcement.
A company probe determined the trades were made inadvertently and without an intention to break any corporate rules or securities laws. A 2005 Ontario Securities Commission investigation also concluded that CP Ships should be let off with only a warning, praising the co-operation investigators received from the company. The executives agreed to pay restitution of $1.4-million.
Class actions on behalf of shareholders were launched in Ontario, British Columbia and Quebec. An Ontario court approved the settlement last month, with a Quebec judge following suit in January. As a condition of the settlement, the B.C. suit was dropped.
Siskinds LLP put out a statement Monday advising anyone who bought CP Ships securities between Jan. 29, 2003, and Aug. 9, 2004, or who held CP Ships securities on Aug. 9, 2004, to file their claims by June 7, 2010.