Panera Agrees $5.75 Million Settlement in Securities Lawsuit

Seattle, WA: Panera Bread Co, has agreed a proposed $5.75 million settlement in the securities class action brought by shareholders who allege that the chain misled investors about the success of its Crispani pizza.

Western Washington Laborers-Employers Pension Trust filed the lawsuit in January 2008 in the U.S. District Court in St. Louis on behalf of shareholders who bought Panera common stock between November 1, 2005, and July 26, 2007.

The lawsuit alleges that executives, including executive chairman Ron Schaich, made false and misleading statements about Crispani from 2005 to 2007, which artificially inflated Panera's stock. Crispani was a highly touted new flatbread pizza Panera launched in late 2006. Panera discontinued the Crispani product in 2008 due to high labor costs.

According to the lawsuit, Panera executives did not disclose that Crispani was a drag on sales in news releases and filings with the Securities and Exchange Commission, and gave misleading growth projections.

The "misstatements and omissions had the cause and effect of creating in the market an unrealistically positive assessment of Panera Bread and its business, prospects and operations," the lawsuit stated.

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Published on Feb-23-11