Fibria Settles Suit Over 2008 Aracruz Currency Losses
Fibria Celulose SA (FIBR3), the world’s largest pulp producer, agreed to settle a lawsuit brought by a Miami Beach municipal pension fund over $2.13 billion of currency-derivative losses in 2008, according to a court filing.
Terms of the proposed settlement with the City Pension Fund for Firefighters and Police Officers in the City of Miami Beach weren’t disclosed in the parties’ joint filing yesterday in federal court in Miami. They asked the court to stay the case for 45 days, pending formal approval of the settlement.
The lawsuit was filed in 2008 against Aracruz Celulose SA, a Brazilian company that was then the world’s largest eucalyptus-pulp maker. Sao Paulo-based Fibria was formed in 2009 after Votorantim Celulose & Papel SA took over Aracruz.
The pension funds claimed in their complaint that Aracruz lost more than $2 billion by purchasing currency-derivative contracts as a “high stakes gamble that went undisclosed to the company’s shareholders.”
The pension funds sought to proceed on behalf of all purchasers of Aracruz American depositary receipts from April 7, 2008, to Oct. 2, 2008. The suit hadn’t yet been granted class- action status.
Joseph White, an attorney for the plaintiffs, and Douglas P. Baumstein, representing Fibria, declined to comment on the details of the proposed settlement.
The case is City Pension Fund for Firefighters and Police Officers in the City of Miami Beach v. Aracruz Cellulose SA, 1:08-cv-23317, U.S. District Court, Southern District of Florida (Miami).
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