Miami Beach pension fund wins shareholder suit over currency derivatives
By Bloomberg | January 8, 2013 4:05 pm
Fibria Celulose agreed to pay shareholders $37.5 million to settle a lawsuit brought by the City of Miami Beach (Fla.) Pension Fund for Firefighters and Police Officers 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 pension fund without disclosing the amount.
In a court filing Monday, 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, 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 took over Aracruz.
The pension fund claimed 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 — which had $522 million as of Sept. 30, 2011, according to data on its website — sought to proceed with its suit on behalf of all investors who purchased Aracruz American depository 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.