Coca Cola 2010 Annual Report Download - page 25

ITEM 3. LEGAL PROCEEDINGS
The Company is involved in various legal proceedings, including the proceedings specifically discussed below.
Management of the Company believes that any liability to the Company that may arise as a result of these proceedings
will not have a material adverse effect on the financial condition of the Company and its subsidiaries taken as a whole.
CCE Shareowners Litigation — Delaware
Shortly following the announcement of the agreement for the Company’s acquisition of CCE’s North American
operations, purported shareowners of CCE filed five substantially identical putative class action lawsuits in the Court of
Chancery of the State of Delaware against CCE, the members of the Board of Directors of CCE and the Company.
These lawsuits were subsequently consolidated into one action styled In Re CCE Shareholders Litigation (Consolidated
C.A. No. 5291-VCN). On March 31, 2010, the plaintiffs filed a consolidated complaint. On June 25, 2010, the plaintiffs
filed an amended consolidated complaint.
In the amended consolidated complaint, the plaintiffs allege, among other things, that CCE, CCE’s directors and the
Company have violated Delaware law by not submitting the sale of CCE’s North American operations to a separate
vote of CCE’s shareowners; and that CCE’s directors breached their fiduciary duties to CCE and its shareowners by
approving the transaction for grossly inadequate consideration, and that the Company aided and abetted such breach.
The plaintiffs further allege that by virtue of its stock ownership in CCE, representation on the Board of Directors of
CCE and various agreements and business relationships with CCE, the Company dominated and controlled CCE during
the relevant period and therefore had a fiduciary duty to CCE’s public shareowners which the Company breached
because, among other things, the transaction is not entirely fair and that both CCE and the Company failed to
adequately disclose certain aspects of the transaction, the disclosure of which would have been necessary to fully inform
a decision to vote for or against same.
In the amended consolidated complaint, the plaintiffs seek a judgment enjoining the closing of the transaction and
declaring the transaction unlawful and unenforceable (this request for relief has become moot upon the closing of the
CCE transaction on October 2, 2010), and ordering rescission, directing defendants to account for all damages, profits,
special benefits and unjust enrichment, awarding the costs and disbursements of the action, including reasonable
attorneys’ fees, accountants’ and experts’ fees, costs and expenses, and granting such other relief as the court deems just
and proper.
On or about July 15, 2010, the Company, CCE and the other defendants filed separate answers to the amended
consolidated complaint.
On September 3, 2010, the parties to the consolidated Georgia litigation described below executed a memorandum of
understanding (the ‘‘MOU’’) containing the terms for the parties’ agreement in principle to settle the lawsuits. On
January 14, 2011, the parties to the consolidated Delaware litigation and the consolidated Georgia litigation entered
into a Stipulation and Agreement of Compromise and Settlement (the ‘‘Settlement Stipulation’’) to resolve, subject to
court approval, the consolidated Delaware litigation and the consolidated Georgia litigation. A preliminary approval
hearing on the settlement has been set for March 3, 2011, and the final approval hearing for June 8, 2011. Pursuant to
the Settlement Stipulation, the parties in the consolidated Delaware litigation will use their best efforts to obtain the
dismissal with prejudice of the consolidated Delaware litigation within five business days of the final approval of the
settlement by the Georgia court.
The Company believes that the allegations in the consolidated Delaware litigation are without merit and, in the event
such litigation is not dismissed as contemplated by the MOU, intends to defend vigorously its interests.
CCE Shareowners Litigation — Georgia
Shortly following the announcement of the agreement for the Company’s acquisition of CCE’s North American
operations, purported shareowners of CCE filed three putative class action lawsuits in the Superior Court of Fulton
County, Georgia against the Company, CCE and the members of the Board of Directors of CCE. These lawsuits were
subsequently consolidated into one action styled In Re The Coca-Cola Company Shareholder Litigation (Civil Action
No. 2010cv182035). On May 17, 2010, the consolidated action was transferred to the Business Case Division of the
Fulton County Superior Court.
23