Coca Cola 2005 Annual Report Download - page 25

of the three cases, the plaintiff has voluntarily dismissed three individual defendants. The Company filed
motions to dismiss all claims in each case. Briefings on these motions are complete and the parties are waiting
for the court’s rulings.
The Company believes that it has meritorious defenses in each of these cases and intends to vigorously
defend its interests therein.
On February 7, 2006, the International Brotherhood of Teamsters, a purported shareholder of CCE, filed a
derivative action (International Brotherhood of Teamsters v. The Coca-Cola Company, et al.) in the Delaware
Court of Chancery for New Castle County on behalf of CCE against the Company and certain current and
former directors and officers of CCE. The lawsuit alleges, among other things, that the Company is a controlling
shareholder of CCE and, as such, it owes a fiduciary duty to CCE. The lawsuit further alleges that the Company
has breached such fiduciary duty by causing CCE to be operated and to undertake numerous business decisions
for the primary benefit of the Company and its shareowners in a manner adverse to the interests of CCE and its
shareholders. In addition, the lawsuit alleges that the individual defendants have breached their fiduciary duties
by, among other things, permitting the Company to control CCE and to abuse such control in a manner designed
to maximize the Company’s profits at the expense of CCE’s financial condition. The plaintiff, purportedly on
behalf of CCE, is seeking, from or with respect to the Company, declaratory relief, an accounting for losses
sustained by CCE as a result of the wrongs alleged compensatory damages in an amount to be determined at
trial, injunctive relief and the implementation of certain corrective measures, assumption by the Company of all
debts and liabilities allegedly incurred by CCE on behalf of the Company, award of costs and expenses, including
reasonable attorneys’ fees and expenses, and such other further relief as the court may deem just and proper.
The Company believes that it has substantial legal and factual defenses to the plaintiff’s allegations and intends
to vigorously defend itself in this lawsuit.
In February 2006, two largely identical cases were filed against the Company and CCE, one in the Circuit
Court of Jefferson County, Alabama (Coca-Cola Bottling Company United, et al. v. The Coca-Cola Company and
Coca-Cola Enterprises Inc.) and the other in the United States District Court for the Western District of
Missouri, Southern Division (Ozarks Coca-Cola/Dr Pepper Bottling Company, et al. v. The Coca-Cola Company
and Coca-Cola Enterprises Inc.) by bottlers that collectively represented approximately 10 percent of the
Company’s U.S. unit case volume for 2005. The plaintiffs in these lawsuits allege, among other things, that the
Company and CCE are acting in concert to establish a warehouse delivery system to supply Powerade to a major
customer, which the plaintiffs contend would be detrimental to their interests as authorized distributors of this
product. The plaintiffs claim that the alleged conduct constitutes breach of contract, implied covenant of good
faith and fair dealing and expressed covenant of good faith by the Company and CCE. In addition, the plaintiffs
seek remedies against the Company and CCE on a promissory estoppel theory. The plaintiffs seek actual and
punitive damages, interest and costs and attorneys’ fees, as well as permanent injunctive relief, in the Alabama
case and preliminary and permanent injunctive relief in the federal case. The Company believes it has
substantial factual and legal defenses to the plaintiffs’ claims and intends to defend itself vigorously in these
lawsuits.
The Company is involved in various other legal proceedings. Management of the Company believes that any
liability to the Company that may arise as a result of these proceedings, including the proceedings specifically
discussed above, will not have a material adverse effect on the financial condition of the Company and its
subsidiaries taken as a whole.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
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