Packaging Corporation of America (PCA) announced today that it has reached an agreement to settle a civil, class action lawsuit filed against PCA and eight other North American manufacturers of containerboard.
Under the terms of the agreement, which must be approved by the court, PCA will pay $17.6m into a settlement fund in return for a dismissal and release of all claims of the purported class. PCA will record a reserve for the expected settlement of the agreement in first quarter 2014 results, which will result in an after-tax charge of $11.3m, or $0.11 per share.
Commenting on the settlement agreement, Mark W. Kowlzan, Chief Executive Officer of PCA, said, "While PCA believes that the allegations brought against it in this action have no merit, our Board of Directors has determined that it is in the best interest of our shareholders to settle this lawsuit at this time to avoid the substantial legal costs as well as the uncertainty involved with litigation of this nature."
PCA is the fourth largest producer of containerboard and corrugated packaging products in the United States and the third largest producer of uncoated freesheet paper in North America. PCA operates eight paper mills and 98 corrugated products plants and related facilities.
