Fibria to Pay $37.5 Million to Settle Derivatives Lawsuit
Fibria Celulose SA (FIBR3), the world’s largest pulp producer, agreed to pay shareholders $37.5 million to settle a lawsuit brought by a Florida municipal pension fund over $2.13 billion of currency-derivative losses in 2008, according to a court filing.
In November, lawyers in the case told a federal judge in Miami that they had reached an agreement to settle the lawsuit filed by the City Pension Fund for Firefighters and Police Officers in the City of Miami Beach without disclosing the amount.
In a Jan. 7 court filing, lawyers said Fibria agreed to pay $37.5 million while details are still being worked out. Both parties requested an additional 14 days to present a final settlement for court approval.
The lawsuit was filed 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 fund 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 fund sought to proceed with their suit on behalf of all investors who purchased Aracruz American depositary receipts from April 7, 2008, to Oct. 2, 2008.
Joseph White, an attorney for the plaintiffs, and Douglas P. Baumstein, who represents Fibria, couldn’t be reached immediately for comment on the 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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