Coca Cola 2007 Annual Report Download - page 24

The Company is unable to predict at this time with any reasonable degree of certainty what action, if any, the
European Commission will take with respect to these issues.
Selbst and Amalgamated
In May and July 2005, two putative class action lawsuits (Selbst v. The Coca-Cola Company and Douglas N. Daft
and Amalgamated Bank, et al. v. The Coca-Cola Company, Douglas N. Daft, E. Neville Isdell, Steven J. Heyer and
Gary P. Fayard) alleging violations of the anti-fraud provisions of the federal securities laws were filed in the United
States District Court for the Northern District of Georgia against the Company and certain current and former executive
officers. These cases were subsequently consolidated, and an amended and consolidated complaint was filed in
September 2005. The purported class consists of persons, except the defendants, who purchased Company stock
between January 30, 2003, and September 15, 2004, and were damaged thereby. The amended and consolidated
complaint alleges, among other things, that during the class period the defendants made false and misleading
statements about (a) the Company’s new business strategy/model, (b) the Company’s execution of its new business
strategy/model, (c) the state of the Company’s critical bottler relationships, (d) the Company’s North American
business, (e) the Company’s European operations, with a particular emphasis on Germany, (f) the Company’s
marketing and introduction of new products, particularly Coca-Cola C2, and (g) the Company’s forecast for growth
going forward. The plaintiffs claim that as a result of these allegedly false and misleading statements, the price of the
Company stock increased dramatically during the purported class period. The amended and consolidated complaint
also alleges that in September and November of 2004, the Company and E. Neville Isdell acknowledged that the
Company’s performance had been below expectations, that various corrective actions were needed, that the Company
was lowering its forecasts, and that there would be no quick fixes. In addition, the amended and consolidated complaint
alleges that the charge announced by the Company in November 2004 should have been taken early in 2003 and that,
as a result, the Company’s financial statements were materially misstated during 2003 and the first three quarters of
2004. The plaintiffs, on behalf of the putative class, seek compensatory damages in an amount to be proved at trial,
extraordinary, equitable and/or injunctive relief as permitted by law to assure that the class has an effective remedy,
award of reasonable costs and expenses, including counsel and expert fees, and such other further relief as the Court
may deem just and proper. On November 21, 2005, the Company and the individual parties filed a motion to dismiss
the amended and consolidated complaint. The plaintiffs filed their response to that motion on January 27, 2006. On
September 29, 2006, the Court entered its order granting the Company’s motion to dismiss the amended complaint in
its entirety and granted the plaintiffs 20 days from its date of entry within which to seek leave to file a second amended
complaint to attempt to correct deficiencies noted therein. On October 23, 2006, plaintiffs advised the Court that they
would not seek leave to file a second amended complaint. The Court entered its final order of judgment on March 23,
2007. On April 16, 2007, plaintiffs filed notice of appeal to the United States Court of Appeals for the Eleventh Circuit
of the Court’s order dismissing this case. On December 4, 2007, the Court of Appeals heard argument on the appeal.
On January 10, 2008, the Court of Appeals issued an opinion affirming the dismissal of the case.
The plaintiffs may file a petition of certiorari with the U.S. Supreme Court; however, barring the U.S. Supreme
Court granting such a petition, this matter will be considered closed.
Chapman
On June 30, 2005, Maryann Chapman filed a purported shareholder derivative action (Chapman v. Isdell, et al.)in
the Superior Court of Fulton County, Georgia, alleging violations of state law by certain individual current and former
members of the Board of Directors of the Company and senior management, including breaches of fiduciary duties,
abuse of control, gross mismanagement, waste of corporate assets and unjust enrichment, between January 2003 and
the date of filing of the complaint that have caused substantial losses to the Company and other damages, such as to its
reputation and goodwill. The defendants named in the lawsuit include Neville Isdell, Douglas Daft, Gary Fayard,
Ronald Allen, Cathleen Black, Warren Buffett, Herbert Allen, Barry Diller, Donald McHenry, Sam Nunn, James
Robinson, Peter Ueberroth, James Williams, Donald Keough, Maria Lagomasino, Pedro Reinhard, Robert Nardelli and
Susan Bennett King. The Company is also named a nominal defendant. The complaint further alleges that the
22