UNITED STATES DISTRICT COURT ... - Sturm College of Law€¦ · C. Consideration of Final Approval Criteria Supports Preliminary Approval..... 1 0 D. Submission of the Settlement

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF FLORIDA

NO.08-01916-MD-MARRA/JOHNSON

IN RE: CHIQUITA BRANDSINTERNATIONAL, INC., ALIEN TORTSTATUTE AND SHAREHOLDERDERIV ATIVE LITIGATION

This Document Relates To:

DERIVATIVE ACTIONS.

/

AGREED MOTION, PURSUANT TO FEDERAL RULE OF CIVIL PROCEDURE 23.1, FORPRELIMINARY APPROVAL OF PROPOSED DERIVATIVE SETTLEMENT AND

MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT THEREOF

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Case 0:08-md-01916-KAM Document 343 Entered on FLSD Docket 08/05/2010 Page 1 of 37

No. 08-0 1916-MD-MARRA/JOHNSON

TABLE OF CONTENTSPage

I. INTRODUCTION ...............................................................................................................2

II. FACTUAL BACKGROUND ..............................................................................................3

III. THE PROPOSED SETTLEMENT SHOULD BE GRANTED PRELIMINARYAPPROVAL ........................................................................................................................7

A. The Role of the Court in the Approval of a Derivative Settlement .........................7

B. The Proposed Settlement Is Within an Appropriate Range for Preliminary

Approval ..................................................................................................................9

C. Consideration of Final Approval Criteria Supports Preliminary Approval........... 1 0

D. Submission of the Settlement to Current Chiquita Shareholders IsAppropriate........................................................................................................... .22

IV. PROPOSED SCHEDULE OF EVENTS...........................................................................23

V. CONCLUSION..................................................................................................................24

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TABLE OF AUTHORITIESPage

CASES

Armstrong v. Bd. of Sch. Dirs.,616 F.2d 305 (7th Cir. 1980) .....................................................................................................8

Ass 'nfor Disabled Americans, Inc. v. Amoco Oil Co.,211 F.R.D. 457 (S.D. Fla. 2002)..............................................................................................1 1

Behrens v. Wometco Enters., Inc.,118 F.R.D. 534 (S.D. Fla. 1988), a.ff'd, 899 F.2d 21 (lIth Cir. 1990) ....................................1 1

Bennett v. Behring Corp. ,737 F.2d 982 (lIth Cir. 1984) .........................................................................................passim

Cohn v. Nelson,375 F. Supp. 2d 844 (E.D. Mo. 2005)..................................................................................8, 16

Cotton v. Hinton,559 F.2d 1326 (5th Cir. 1977) .................................................................................................1 1

Fresco v. Auto. Directions, Inc.,No. 03-CIV -61 063-MARTINEZ-SIMONTON,2009 U.S. Dist. LEXIS 125233 (S.D. Fla. Jan. 16,2009) .........................................................8

Horton v. Merrill Lynch, Pierce, Fenner & Smith,855 F. Supp. 825 (E.D.N.C. 1994).............................................................................................9

Horton v. Metropolitan Life Ins. Co.,No. 93-1849-CIV-T-23A, 1994 U.S. Dist. LEXIS 21395(M.D. Fla. Oct. 25, 1994).........................................................................................................23

In re Apple Computer Sec. Litig.,No. C-84-20148(A)-JW, 1991 U.S. Dist. LEXIS 15608(N.D. CaL. Sept. 6, 1991)...............................................................................................................14

In re Lloyd's Am. Trust Fund Litig.,No. 96 Civ. 1262 (RWS), 2002 U.S. Dist. LEXIS 22663(S.D.N.Y. Nov. 26, 2002)........................................................................................................15

In re NASDAQ Market-Makers Antitrust Litig.,176 F.R.D. 99 (S.D.N.Y. 1997) .................................................................................................9

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No.08-01916-MD-MARRA/JOHNSON

Page

In re Painewebber Ltd. P 'ships Litig.,171 F.R.D. 104 (S.D.N.Y.),aff'd, 117 F .3d 721 (2d Cir. 1 997) ........................................................................................... 1 5

In re Us. Oil & Gas Litig.,967 F .2d 489 (11th Cir. 1 992) ...................................................................................................8

In re Walt Disney Co. Derivative Litig.,907 A.2d 693 (DeL. Ch. 2005),aff'd, 906 A.2d 27 (DeL. 2006).................................................................................................13

In re Warner Commc 'ns Sec. Litig.,618 F. Supp. 735 (S.D.N.Y. 1985),

affd, 798 F.2d 35 (2d Cir. 1986) .............................................................................................20

Maher v. Zapata Corp.,714 F.2d 436 (5th Cir. 1983) ...............................................................................................8, 16

Maul v. Kirkman,637 A,2d 928 (N.J. Super. Ct. App. Div. 1994).......................................................................13

MCI Comm 'ns Corp. v. Am. Tel. & Tel. Co.,708 F.2d 1081 (7th Cir. 1983) .................................................................................................14

Perez v. Asurion Corp.,501 F. Supp. 2d 1360 (S.D. Fla. 2007) ..............................................................................1 1,20

Robbins v. Koger Props.,116 F.3d 1441 (lIth Cir. 1997) ...............................................................................................14

Sterling v. Stewart,158 F.3d 1199 (lIth Cir. 1998) .........................................................................................10, 11

Strang v. JHM Mortgage Sec. Ltd. P'ship,890 F. Supp. 499 (E.D. Va. 1995) ...........................................................................................20

Turner v. Murphy Oil USA, Inc.,No. 05-4206,2006 U.S. Dist. LEXIS 4472(E.D. La. Feb. 6, 2006) ............................................................................................................22

Unite Natl Ret. Fund v. Watts,No. 04-CV-3603 (DMC), 2005 U.S. Dist. LEXIS 26246(D.N.J. Oct. 28, 2005)..........................................................................................................9, 16

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Page

STATUTES, RULES AND REGULATIONS

Federal Rules of Civil ProcedureRule 23.1 ........................................................................................................................1, 11,23

SECONDARY AUTHORITIES

7 Alba Conte & Herbert B. Newberg, Newberg on Class Actions§22.1 10 (4th ed. 2002)...............................................................................................................7

Manualfor Complex Litigation (4th ed. 2004)§13.14.........................................................................................................................................3§21.632.......................................................................................................................................9§21 .633.......................................................................................................................................9

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NOW come Plaintiffs 1 and the Special Litigation Committee of Chiquita Brands

International, Inc. (the "SLC"), through their counsel of record, and make this Agreed Motion,

Pursuant to Federal Rule of Civil Procedure 23.1, for Preliminary Approval of Proposed Derivative

Settlement ("Motion") and in support thereof state as follows:

1. This Motion relates to the settlement of the derivative actions (the "Derivative

Litigation") brought on behalf of Chiquita Brands International, Inc. ("Chiquita" or the "Company"),

which were centralized before this Court as part ofthe above-captioned multi-district litigation.

2. On April 19,2010, the parties in the Derivative Litigation entered into a Stipulation

and Agreement of Settlement, which is filed concurrently with this Motion.

3. By this Motion, Plaintiffs and the SLC respectfully request this Court enter the

(Proposed) Order Preliminarily Approving Derivative Settlement and Providing for Notice (the

"Order"), the form of which is attached as Exhibit A to the Stipulation, as follows:

(a) preliminarily approving the Stipulation;

(b) approving the form and program of notice described in the Order; and

( c) scheduling a fairness hearing before the Court to determine whether the

proposed Settlement should be finally approved.

4. Plaintiffs, and the SLC on behalf of Chiquita, agree the terms of the proposed

Settlement are fair and reasonable to all parties and confer a substantial benefit on Chiquita.

Capitalized terms not otherwise defined herein shall have the same meaning set forth in theStipulation and Agreement of Settlement dated as of April 19, 2010, submitted herewith (the"Stipulation").

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5. A proposed Order (in conformity with the Order appended to the Stipulation as

Exhibit A thereto) is submitted herewith.

WHEREFORE, based upon the foregoing, Plaintiffs and the SLC respectfully request that

this Court grant the Motion and enter the proposed Order.

MEMORANDUM OF POINTS AND AUTHORITIES

I. INTRODUCTION

Plaintiffs and the SLC, by their undersigned counsel, respectfully submit this memorandum

in support of their agreed motion for an Order: (i) granting preliminary approval of the proposed

Settlement of the Derivative Litigation as embodied in the Stipulation; (ii) approving the form and

manner of giving notice of the Settlement to Chiquita Shareholders; and (iii) setting a fairness

hearing for final approval of the Settlement.

The Stipulation entered into by Plaintiffs, the SLC, and the Individual Defendants (together

with Chiquita, the "Settling Parties") confers substantial benefits upon Chiquita, on whose behalf the

Derivative Litigation was brought, in the form of corporate governance and compliance changes

negotiated by Plaintiffs and the SLC, by their respective counsel, that Chiquita has agreed to adopt

and implement. In addition to corporate governance and compliance changes that increase the

independence of each member of Chiquita's Board of Directors, place additional emphasis on

corporate ethics and compliance, and amplify shareholder participation at annual shareholder

meetings, the changes also include policies specifically designed to prevent the reoccurrence of the

conduct alleged in the Amended Complaint - namely, payments to terrorist organizations. The

Settlement also provides that, subject to the approval of the Court, Chiquita and/or its insurers will

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pay up to $4 million to Plaintiffs' counsel for attorneys' fees and expenses. Chiquita will also be

responsible for the costs of providing shareholder notice.

In determining whether preliminary approval is warranted, the issue before the Court is

whether the proposed Settlement is within the range of what might be found fair, reasonable, and

adequate, such that notice of the proposed Settlement should be given to Chiquita Shareholders and a

fairness hearing scheduled to consider final settlement approvaL. The Court is not required at this

point to make a determination as to whether the Settlement should be finally approved. As stated in

the Manual for Complex Litigation § 13.14, at 1 73 (4th ed. 2004):

First, the judge reviews the proposal preliminarily to determine whether it issufficient to warrant public notice and a hearing. If so, the final decision on approvalis made after the hearing.

II. FACTUAL BACKGROUND

In October and December of2007 and January of2008, certain shareholders of Chiquita filed

four derivative lawsuits in various U.S. District Courts, captioned (i) City of Philadelphia Public

Employees Retirement System, derivatively on behalf of Chiquita Brands International, Inc. v.

Aguirre, et al., Case NO.1 :07-cv-851 (S.D. Ohio), (ii) Sheet Metal Workers Local #218(S) Pension

Fund, derivatively on behalf of Chiquita Brands International, Inc. v. Hills, et a!., Case NO.1 :07 -cv-

01957 (D.D.C.), (iii) Henry Taylor, derivatively on behalf of Chiquita Brands International, Inc. v.

Aguirre, eta!., Case No. 3:07-cv-06002-FLW-JJH (D.N.J.), and (iv) Hawaii Annuity Trust Fundfor

Operating Engineers, derivatively on behalf of Chiquita Brands International, Inc. v. Hills, et al.,

Civil NO.1 :08-cv-00081-PLF (D.D.C.).

By orders dated February 20 and 27, 2008, the U.S. Judicial Panel on Multidistrict Litigation

transferred the above-described shareholder derivative lawsuits (together with certain other lawsuits

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that are not the subject of this Stipulation) to the U.S. District Court for the Southern District of

Florida (the "Court") for pre-trial purposes. These cases are currently centralized for pre-trial

purposes before the Court and captioned In re: Chiquita Brands International, Inc., Alien Tort

Statute and Shareholder Derivative Litigation, No. 08-01916-MD-MARRA/JOHNSON.

In December of 2007, the Service Employees International Union filed a shareholder

derivative lawsuit in the Ohio Court of Common Pleas captioned Servo Employees Int'l Union,

derivatively on behalfofChiquita Brands International, Inc. V. Hills, et al., No. A07-1 1383 (Ct. of

Common Pleas, Hamilton County Ohio) (the "Ohio Action"). By order entered February 26,2008,

the court in the Ohio Action stayed the Ohio Action pending resolution ofthe Derivative Litigation.

By order dated August 12, 2008, the Court appointed the law firms of Coughlin Stoia Geller

Rudman & Robbins LLp2 and Cohen, Placitella & Roth, P.C. as co-lead counsel in the Derivative

Litigation ("Co-Lead Counsel").

On September 11, 2008, Plaintiffs filed a verified consolidated shareholder derivative

complaint (the "Amended Complaint") in the Derivative Litigation. The Amended Complaint

asserts two causes of action on behalf of Chiquita, breach of fiduciary duty and corporate waste,

against twenty-six current and former Chiquita directors and officers (the "Individual Defendants").

There are no wrongful acts alleged, claims asserted, or defendants named in the Ohio Action that are

not alleged, asserted, and named, respectively, in the Amended Complaint.

The allegations in the Amended Complaint arise principally out of payments made by

Chiquita's Colombian subsidiary, C.I. Bananos de Exportación S.A. ("Banadex"), to left-wing

2 Now known as Robbins Geller Rudman & Dowd LLP.

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guerrilla and right-wing paramilitary groups, including the Fuerzas Armadas Revolucionarias de

Colombia, or the Revolutionary Armed Forces of Colombia, known as the "F ARC," and the

Autodefensas Unidas de Colombia, or the United Self-Defenses of Colombia, known as the "AUC,"

from approximately 1 989 through January 2004 (the "Colombia Payments"). As a result of certain

Columbia Payments, Chiquita pled guilty in March 2007 to violating United States anti-terrorism

laws and agreed to pay a $25 million criminal fine.

In response to the filing of the Derivative Litigation and the filing of two substantially similar

state court actions (the Ohio Action and Hawaii Annuity Trust Fundfor Operating Engineers v.

Hills, et a!., No. c-379-07 (N.J. Super Ct. Ch. Div.)), on April 3, 2008, the Chiquita Board of

Directors adopted a resolution (the "Resolution"), which established the SLC. The Resolution

delegated to the SLC the authority and power to investigate, review, and analyze the facts,

allegations, and circumstances that are the subject of the Derivative Litigation and granted it "the full

and exclusive authority to consider and determine whether or not the prosecution of the claims

asserted in the Derivative Litigation or any other claims related to the facts, allegations, and

circumstances of the Derivative Litigation is in the best interests of the Company and its

shareholders, and what action the Company should take with respect thereto. . ." The Resolution

designated non-management Chiquita directors Howard W. Barker, Jr., William H. Camp, and Clare

M. Hasler as members of the SLC.

From May 2008 through February 2009, the SLC, with the assistance of its independent

counsel Fried, Frank, Harris, Shriver & Jacobson LLP, conducted a detailed and thorough factual

and legal investigation in order to determine whether it was in the best interests of the Company and

its shareholders to pursue, settle, or dismiss any or all of the claims asserted in the Amended

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Complaint. During that investigation, the SLC and its counsel conducted seventy interviews of

relevant witnesses and reviewed more than 750,000 pages of documents. During the course of the

SLC's investigation, the SLC gave Co-Lead Counsel the opportunity to provide input concerning the

scope and direction of its investigation and periodically updated Co-Lead Counsel with respect to its

factual findings through in-person and telephonic meetings.

Following the conclusion of its investigation and after considering the factual and legal

merits of each claim alleged against each ofthe Individual Defendants in the Derivative Litigation,

the SLC, in the exercise of its business judgment, concluded the Amended Complaint should be

dismissed in its entirety. Consistent with its conclusion, on February 25, 2009, the SLC filed a

motion to dismiss the Amended Complaint with the Court. Accompanying the SLC's motion to

dismiss, the SLC filed a detailed written report of its investigation and conclusions (the "SLC

Report"). The SLC's motion to dismiss remains pending before the Court.

On or before March 31, 2009, Plaintiffs in the Derivative Litigation and the SLC served

certain discovery requests and agreed to a briefing schedule with respect to the SLC's motion to

dismiss.

Following the filing of the SLC's motion to dismiss and the SLC Report, Plaintiffs and the

SLC engaged in extensive discussions regarding a potential resolution of the Derivative Litigation

and the Ohio Action. On October 5, 2009, the Plaintiffs and the SLC participated in a mediation

before the Honorable Layn R. Phillips, a former United States District Judge, in an attempt to reach a

settlement. Although the parties did not reach an agreement at the mediation, Plaintiffs and the SLC

continued to engage in good faith negotiations regarding a potential resolution of the Derivative

Litigation and the Ohio Action.

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On December 23, 2009, Plaintiffs and the SLC entered into a Memorandum of

Understanding pursuant to which they agreed to settle the Derivative Litigation and the Ohio Action,

subject to execution of the Stipulation.

Plaintiffs and the SLC agree that it is in the best interests of Chiquita and its shareholders to

settle the Derivative Litigation and the Ohio Action on the terms described in the Stipulation.

Furthermore, the SLC believes that the Settlement, taken as a whole and including the payment of up

to $4 million in attorneys' fees and expenses to Plaintiffs' counsel, is fair and reasonable to Chiquita

and its shareholders.

III. THE PROPOSED SETTLEMENT SHOULD BE GRANTEDPRELIMINARY APPROVAL

A. The Role of the Court in the Approval of a Derivative Settlement

"The role of the court and the criteria to be considered in evaluating the adequacy and

fairness of a derivative settlement are substantially the same as in a class action." 7 Alba Conte &

Herbert B. Newberg, Newberg on Class Actions §22.1 10, at 476 (4th ed. 2002). The procedure for

review of a proposed class action settlement is well established:

District court review of a class action settlement proposal is a two-stepprocess. The first step is a preliminary, pre-notification hearing to determine whetherthe proposed settlement is "within the range of possible approval." This hearing isnot a fairness hearing; its purpose, rather, is to ascertain whether there is any reasonto notify the class members of the proposed settlement and to proceed with a fairnesshearing. Manual for Complex Litigation § 1.46, at 53-55 (West 1977). Ifthe districtcourt finds a settlement proposal "within the range of possible approval," it thenproceeds to the second step in the review process, the fairness hearing. Classmembers are notified of the proposed settlement and of the fairness hearing at whichthey and all interested parties have an opportunity to be heard. The goal of thefairness hearing is

"to adduce all information necessary to enable the judge

intelligently to rule on whether the proposed settlement is 'fair,reasonable, and adequate.'"

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Manualfor Complex Litigation at 57.

Armstrong v. Bd. ofSch. Dirs., 616 F.2d 305,314 (7th Cir. 1980) (footnote omitted). Then, at the

fairness hearing and on the basis of all information available to the court, the trial judge must decide

whether or not to finally approve the proposed settlement. See Fresco v. Auto. Directions, Inc., No.

03-CIV-61063-MARTINEZ-SIMONTON, 2009 U.S. Dist. LEXIS 125233, at *8 (S.D. Fla. Jan. 16,

2009).

In determining whether to preliminarily approve the Settlement, the Court should be guided

by the "strong judicial policy favoring settlement as well as by the realization that compromise is the

essence of settlement." See Bennett v. Behring Corp., 737 F .2d 982, 986 (lIth Cir. 1984).3 Courts

have consistently recognized "(t)he law favors settlement, particularly in class actions and other

complex cases where substantial judicial resources can be conserved by avoiding formal litigation."

Cohn v. Nelson, 375 F. Supp. 2d 844, 852 (E.D. Mo. 2005). This is particularly true in shareholder

derivative actions, which are "notoriously difficult and unpredictable." Id.; In re Us. Oil & Gas

Litig., 967 F.2d 489,493 (lIth Cir. 1992) ("Complex litigation- like the instant case-can occupy a

court's docket for years on end, depleting the resources of the parties and the taxpayers while

rendering meaningful relief increasingly elusive.").

In considering a proposed settlement of a shareholder derivative action, "the district court

must determine that there has been no fraud or collusion in arriving at the settlement agreement, and

that it is fair, reasonable, and adequate." Maher v. Zapata Corp., 714 F.2d 436,455 (5th Cir. 1983);

Bennett, 737 F.2d at 986. In such cases, "the most important factor in evaluating the fairness of the

3 Internal citations omitted unless otherwise indicated.

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settlement agreement is the benefit to the corporation." Unite Nat'l Ret. Fund v. Watts, No. 04-CV-

3603 (DMC), 2005 U.S. Dist. LEXIS 26246, at *8 (D.N.J. Oct. 28, 2005). At the preliminary

approval stage, the court should consider whether the proposed settlement contains any obvious

deficiencies and, if there are none, order that notice be given to shareholders of a fairness hearing for

final approval at which time they may present their views regarding the terms of the settlement.

Manual for Complex Litigation, supra, §21 .633, at 321 -22; Horton v. Merrill Lynch, Pierce, Fenner

& Smith, 855 F. Supp. 825, 827 (E.D.N.C. 1994) (at preliminary approval stage, court need only

consider "whether there is 'probable cause' to notify the class of the proposed settlement").

The Court also has the discretion to direct the manner in which notice of the Settlement is

given to shareholders. Fed. R. Civ. P. 23.1 (c). As discussed infra, the form of the notice negotiated

by Plaintiffs and the SLC is more than adequate to notify Chiquita Shareholders ofthe terms of the

Settlement, their rights in connection with the Settlement, and the date and location of the fairness

hearing for final approval at which they may be heard.

B. The Proposed Settlement Is Within an Appropriate Range for

Preliminary Approval

Preliminary approval of the proposed Settlement should be granted since it "appears to be the

product of serious, informed, non-collusive negotiations, has no obvious deficiencies. . . and falls

within the range of possible approval . . . ." In re NASDA Q Market-Makers Antitrust Litig., 176

F.R.D. 99, 102 (S.D.N.Y. 1997); see also Manual for Complex Litigation, supra, at §21.632.

Preliminary approval allows for notice of the fairness hearing regarding final approval of the

Settlement to be given to Chiquita Shareholders, at which shareholders and the Settling Parties may

be heard with respect to final approval. Manualfor Complex Litigation, supra, at §21.633.

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The proposed Settlement before this Court is a product of extensive arm's length, non-

collusive negotiations between counsel for Plaintiffs and the SLC, with the substantial assistance of a

respected mediator. Illustrative of the non-collusiveness of the proposed Settlement is the fact that

the substantive terms of the Settlement were negotiated and agreed upon prior to any agreement on

the amount of attorneys' fees and expenses.

Further, the Settlement is reasonable, fair, and beneficial to Chiquita and its shareholders,

particularly given the corporate governance and compliance changes the Company has agreed to

adopt pursuant to the Stipulation are aimed at preventing the reoccurrence of the conduct alleged in

the Amended Complaint.4 Therefore, the Stipulation warrants notice ofthe Settlement to Chiquita

Shareholders and a fairness hearing for final approvaL.

C. Consideration of Final Approval Criteria Supports Preliminary

Approval

The fairness criteria that governs final approval of the proposed Settlement further supports

preliminary approvaL. In determining whether a settlement is fair, adequate, and reasonable, courts

in the Eleventh Circuit consider all relevant factors, including: (1) the likelihood of success at trial;

(2) the range of possible recovery; (3) the point on or below the range of possible recovery at which

a settlement would be deemed fair, adequate, and reasonable; (4) the complexity, expense, and

duration of the litigation; (5) the substance and amount of opposition to the settlement; and (6) the

stage of proceedings at which the settlement was achieved. Bennett, 737 F.2d at 986; Sterling v.

4 As part of the discovery process provided for in the Stipulation, a member of the three-personSLC has confirmed that the SLC agrees that the corporate governance and compliance changesagreed to in the Stipulation confer a substantial benefit on Chiquita.

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Stewart, 158 F.3d 11 99, 1204 (lIth Cir. 1998). Settlement of a derivative action should be approved

so long as it is "fair, adequate and reasonable and is not the product of collusion between the

parties." Cotton v. Hinton, 559 F.2d 1326, 1330 (5th Cir. 1977); Ass 'nfor DisabledAmericans, Inc.

v. Amoco Oil Co., 211 F.RD. 457, 466 (S.D. Fla. 2002); Behrens v. Wometco Enters., Inc., 118

F.R.D. 534, 537 (S.D. Fla. 1988), aff'd, 899 F.2d 21 (lIth Cir. 1990). In evaluating these

considerations, the court is not required to try the case on the merits. Ass 'nfor DisabledAmericans,

211 F.RD. at 467 (citing Cotton, 559 F.2dat 1330). Rather, the court "must rely upon the judgment

of experienced counsel and, absent fraud, 'should be hesitant to substitute its own judgment for that

of counsel. '" Id. An analysis of the Bennett factors confirms the Settlement is fair, adequate, and

reasonable, and not the product of collusion. Accordingly, the Court should grant preliminary

approval of the Settlement.

a. Plaintiffs' Likelihood of Success at Trial

The first Bennett factor supporting preliminary approval of the proposed Settlement is

Plaintiffs' likelihood of success at triaL. Bennett, 737 F.2d at 986. "Where a substantial question

exists regarding the likelihood of success at trial, this factor weighs in favor of approving a

proposed. . . settlement." Perez v. Asurion Corp., 501 F. Supp. 2d 1360, 1380 (S.D. Fla. 2007).

Any litigation poses the risk of an uncertain outcome, especially in complex actions such as the

Derivative Litigation. Sterling, 158 F.3d at 1204. Here, Plaintiffs' victory at trial was far from

certain. Indeed, the Settlement was reached while the SLC's motion to dismiss pursuant to Federal

Rule of Civil Procedure 23.1 and the accompanying SLC Report recommending dismissal were

pending, and Plaintiffs had already served discovery requests to the SLC relating to its investigation.

There was a substantial risk to Plaintiffs and Chiquita that the SLC' s motion would succeed, ending

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the litigation with no relief obtained for Chiquita. Furthermore, to proceed on the merits in this case,

even if they were successful defeating the SLC's motion, Plaintiffs would have to incur great

expense and undertake lengthy proceedings, including the completion of discovery, the preparation

of or opposition to summary judgment motions, trial, and appeals.

While Plaintiffs believe the claims asserted in the Amended Complaint have merit, Plaintiffs

would have faced considerable difficulty in establishing liability on the merits. The SLC's Report

and its motion to dismiss were based upon 10 months of investigation, which included 70 interviews

of relevant witnesses and the review of more than 750,000 pages of documents. The motion raised

numerous complex and potentially dispositive issues that would have required the parties to expend

extensive time and resources in a relatively short period of time. The SLC argued in its motion to

dismiss that it was independent and conducted a good faith investigation into the merits of the

Derivative Litigation with due care, and that the Individual Defendants' conduct was protected by

the business judgment rule. Despite the allegations regarding the payments from Chiquita's

Columbian subsidiary, Banadex, to the F ARC and AUC groups from approximately 1989 through

January 2004, the business judgment rule would afford the Individual Defendants a strong liability

defense, particularly given the fact that certain of the Individual Defendants received advice

regarding the Columbia Payments from the Company's legal department and outside counsel, and

the SLC Report concluded that the Individual Defendants received no personal benefit from the

payments, and believed in good faith that the payments were necessary to prevent harm to the

Company's employees and infrastructure. Under New Jersey substantive law, which governs the

Derivative Litigation, the business judgment rule presumes that directors acted properly and in good

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faith unless there is evidence of fraud, self-dealing, or unconscionable conduct. Maul v. Kirkman,

637 A.2d 928,937 (N.J. Super. Ct. App. Div. 1994).

While the business judgment rule and the protections it affords directors has been set forth in

slightly varied forms, its essence is the strong presumption that, in making a disinterested business

decision, the directors of a corporation acted on an informed basis, in good faith, and with the honest

belief that the action taken was in the best interests of the corporation. In re Walt Disney Co.

Derivative Litig., 907 A,2d 693, 746-47 (DeL. Ch. 2005), aff'd, 906 A.2d 27 (DeL. 2006).5 Although

Plaintiffs believe they had valid arguments against the protections afforded by the rule with respect

to the conduct alleged, the prospect that the Individual Defendants could have been shielded by this

protective umbrella made establishing liability uncertain. Plaintiffs faced the risk that discovery

would establish, and the Court or a jury might ultimately find, that Defendants' conduct was

protected by the business judgment rule. Also present were significant statute of limitations issues

and issues related to the releases given certain individuals in connection with Chiquita's bankruptcy

reorganization in 2002, and questions concerning whether Chiquita would be obligated to indemnify

the Individual Defendants even if Plaintiffs were to obtain a jury verdict. Given the Individual

Defendants' significant defenses and the other complexities of the case, the outcome of a trial on the

5 Countless courts and commentators have discussed the concept of the business judgment ruleand its implications, particularly in the wake of the well-publicized Disney decision. A discussion ofall of the iterations of the rule is not appropriate in this context, but Plaintiffs respectfully refer theCourt to Chancellor Chandler's Disney decision for an extensive explanation of the rule'sdevelopment and teachings. See Disney, 907 A.2d at 762. In Disney, judgment was entered fordefendants on all claims after a ten week bench trial even though the court recognized thatdefendants' "actions fall far short of what shareholders expect and demand from those entrusted witha fiduciary position." Id. at 763.

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merits and any subsequent appeal remained uncertain. Both the Plaintiffs and Co-Lead Counsel

recognize there was substantial risk in continued litigation. Even a victory at trial would not

guarantee the judgment would ultimately be sustained on appeaL. History teaches that substantial

judgments awarded at the trial court level are susceptible to reversal on appeaL. 6 Add to these

appellate risks the difficulty and unpredictability of a lengthy and complex trial regarding events

occurring as long as twenty years ago - where witnesses could fail to remember facts, become

unavailable, or the fact finder could react to the evidence in unforeseen ways - and the benefits of

the Settlement become even more apparent.

While Plaintiffs believe they would have prevailed on the SLC's motion to dismiss, Plaintiffs

have also concluded that, as explained in further detail below, the proposed Settlement provides

meaningful and valuable benefits to, and is fair and reasonable and in the best interests of, Chiquita

and its shareholders while avoiding the expense and risk of continued litigation.

b. The Settlement Is Within the Range of Possible

. Recovery

The second and third Bennett factors supporting preliminary approval of the proposed

Settlement relate to the range of possible recovery and the point at or below the range of possible

recovery at which a settlement would be deemed fair, adequate, and reasonable. Bennett, 737 F.2d at

6 See, e.g., Robbins v. Koger Props., 116 F.3d 1441 (lIth Cir. 1997)(Eleventh Circuit found

no loss causation and overturned $81 million jury verdict in favor of plaintiff); In re Apple ComputerSec. Litig., No. C-84-20148(A)-JW, 1991 U.S. Dist. LEXIS 15608 (N.D. CaL. Sept. 6, 1991) ($100million jury verdict in favor of

plaintiff overturned andj.n.o.v. entered in favor of defendant); MCIComm 'ns Corp. v. Am. TeL. & TeL. Co., 708 F.2d 1081 (7th Cir. 1983) (remanding $1.8 billionantitrust judgment for a new trial on damages which ultimately produced dramatically smalleraward).

- 14 -

530013_6



986. For example, the Derivative Litigation could have been dismissed in response to the SLC's

dismissal motion, summary judgment or trial if this Court or a jury concluded that the Individual

Defendants' actions were protected by the business judgment rule, precluding recovery against some

or all of the Defendants. Thus, the lowest amount of recovery or relief was potentially zero.

Moreover, even if Plaintiffs successfully established liability, to prove damages at trial they

would have had to show, inter alia, that the conduct which formed the basis for the claims in the

Derivative Litigation actually caused Chiquita to suffer damages and that the Individual Defendants

should be held liable for those damages. The issue of damages to Chiquita would have been hotly

disputed and the subject of expert testimony proffered by all parties.7 The damage assessment

prepared by the parties' respective experts would have undoubtedly varied substantially, and at trial,

this crucial element of Plaintiffs' claims may have been reduced to a "battle ofthe experts." It is far

from certain that the finder of fact would have disregarded the Defendants' experts' opinions.

Indeed, the finder of fact could have been swayed by defense experts' opinions that damages were

caused by factors other than the Defendants' alleged wrongdoing, or, alternatively, minimizing the

magnitude of the damages to Chiquita. See, e.g., In re Painewebber Ltd. P 'ships Litig., 171 F.RD.

104, 129 (S.D.N.Y.), aff'd, 11 7 F.3d 721 (2d Cir. 1997). Conceivably, the finder of fact could have

concluded that Chiquita suffered no damages or that damages to the Company were only a fraction

of the amount Plaintiffs contended.

See In re Lloyd's Am. Trust Fund Litig., No. 96 Civ. 1262 (RWS), 2002 U.S. Dist. LEXIS22663, at *61 (S.D.N.Y. Nov. 26,2002) ("The determination of damages. . . is a complicated anduncertain process, typically involving conflicting expert opinions. The reaction of a jury to suchcomplex expert testimony is highly unpredictable. ").

7

- 15 -

530013_6



By contrast, the corporate governance and compliance changes set forth in the Stipulation

provide the certainty of a known benefit. "Courts have recognized that corporate governance

reforms such as those achieved here provide valuable benefits to public companies." Cohn, 375 F.

Supp. 2d at 853. Indeed, "despite the difficulties they pose to measurement, non-pecuniary benefits

to the corporation may support a settlement. This is particularly true when the relief is intended to

prevent future harm." Unite Natl, 2005 U.S. Dist. LEXIS 26246, at *8-*9. As the Cohn court

noted:

I n the context of the alleged wrongdoing, the Settlement provides lasting remedialterms that are specifically designed to protect and preserve (the Company) for thebenefit of its shareholders, and preserves valuable assets of the Company. TheSettlement's corporate governance reforms are specifically designed to minimize theprobability of violations offiduciary duties and federal securities laws in the future.As a result of the implementation of the Settlement's corporate governance changes,

(the Company) is far less likely to become subject to long and costly securitieslitigation in the future, as well as prosecution or investigation by regulators andprosecutors.

375 F. Supp. 2d at 853. The corporate governance and compliance changes Chiquita has agreed to

adopt and implement as part of the Stipulation are tailored to address the conduct Plaintiffs alleged

in the Amended Complaint was wrongful and are specifically designed to prevent payments to

terrorist organizations in the future. As the court cogently observed in Maher:

(W)here, as here, the derivative suit is largely an attack on past corporatemanagement practices, as well as on some present officers and directors, the dollar

amount of a possible judgment, which is essentially the sole goal in the class actiondamage suit, is not the sole, and may well not be the most important, matter to beconsidered, for the effects of the suit on the functioning of the corporation may havea substantially greater economic impact on it, both long-and short-term, than thedollar amount of any likely judgment in its favor in the particular action.

714 F.2d at 461. "The evaluation of such an economic impact is necessarily judgmental and

imprecise and normally does not lend itself to meaningful quantification." Id. Although the

- 16 -530013_6



economic impact of the corporate governance and compliance changes set forth in the Stipulation

cannot be precisely quantified, Plaintiffs and the SLC agree that the corporate governance and

compliance provisions constitute a substantial benefit to Chiquita.8 In addition to corporate

governance and compliance changes that increase the independence of each member of Chiquita's

Board of Directors, place additional emphasis on corporate ethics and compliance, and amplify

shareholder participation at annual shareholder meetings, the changes also include new Company

policies specifically designed to prevent any reoccurrence of the type of conduct alleged in the

Amended Complaint. These specifically tailored reforms, negotiated by Co-Lead Counsel, include:

(1) the Company will implement training programs regarding "Working withAgents and Intermediaries," with a focus on the Foreign Corrupt Practices Act (the"FCP A"), "US Trade Regulations," with a focus on the Office of Foreign AssetsControl (the "OF AC"), "Chiquita's Code of Conduct," and "Antitrust Policies";

(2) Chiquita will make training on topics such as FCP A rules, OF ACrequirements, antitrust policies, and best practices in corporate governancemandatory for members of the Company's Board of Directors on an annual basis;

(3) Chiquita's Chief Compliance Officer ("CCO") will formulate and implement

reasonable criteria governing which personnel shall receive the training set forth in(1), based upon, among other things, role at the Company, access to Companyinformation and resources, and the ability to disperse or receive funds on behalf ofthe Company;

(4) Chiquita will amend the Audit Committee Charter to make explicit therequirement that the Audit Committee perform a risk assessment on an annual basis,or as needed to promptly address potentially unlawful activities;

(5) the Company will ensure its written policies that are available to employees,independent contractors, and vendors state that Chiquita will not adopt measures toprevent whistleblowers from coming forward, will not retaliate against anywhistleblower that does come forward, and will not discourage employees,

8 See supra n.4. See also Stipulation, i¡2. 1, p.8 ("The SLC acknowledges . . . that theGovernance and Compliance Changes constitute a substantial benefit to Chiquita.").

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independent contractors, and vendors from exercising their rights to contactgovernmental authorities or consulting legal counsel;

(6) the Board of Directors will be responsible for notifying employees andvendors annually of Chiquita's confidential whistleblower program;

(7) Chiquita will include in its whistleblower notice to employees, independent

contractors, and vendors that an illegal act can be considered material to theCompany's financials and that Chiquita requests any suspected illegal act bepromptly identified and handled consistent with whistleblower protocol;

(8) Chiquita will formalize in writing its system for screening transactions with

third parties to prevent the making of any payments to Foreign TerroristOrganizations in connection with Company transactions with those third parties;

(9) Chiquita will formalize its system for screening prospective payments against

a database of individuals and entities listed on the Specially Designated Nationals &Blocked Persons List and the procedure for handling any potential matches identifiedin the screening process;

(10) Chiquita will create a written policy requiring the entire Audit Committee be

promptly advised when a potential payment described in (9) is confirmed;

(1 1) the Audit Committee will establish a written policy formalizing the practiceof the Vice President of the Internal Audit Department reporting directly to the AuditCommittee regarding, among other things, any sensitive or irregular payments tothird parties on a quarterly basis;

(12) Chiquita will provide the Internal Audit Department with documentationspecifying the FCPA's record keeping and accounting requirements;

(13) the Board of Directors will adopt a resolution confirming illegal payments to

terrorist organizations, bribes to foreign officials and governments, and other similar

payments, are considered illegal and not authorized by Chiquita;

(14) the Company will formalize and enhance the process by which changes ordevelopments in United States law pertaining to the FCPA, the U.S. Anti-Bribery

Act, the Alien Tort Claims Act, the U.S. securities laws, and the U.S. antitrust lawsare monitored and reported to the Board of Directors by Chiquita's Chief LegalOfficer; and

(15) the CCO will, on a quarterly basis, present to the Audit Committee a report

concerning the status of and/or updates to Chiquita's compliance and ethics programsand policies, including the Company's FCPA Policy, International Trade CompliancePolicy, Code of Conduct, and Antitrust Policy.

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Finally, the benefits ofthe proposed Settlement must be evaluated with the recognition that

any compromise involves concessions by all Settling Parties. Indeed, "compromise is the essence of

settlement." Bennett, 737 F.2d at 986. It is important to note that in negotiating the proposed

Settlement with the SLC, Plaintiffs have obtained certain types of relief in the form of corporate

governance and compliance changes that likely exceed what could have been obtained even if

judgment was entered in their favor.

c. The Complexity, Expense, and Likely Duration of theLitigation Would Be Considerable Were the DerivativeAction to Proceed

Another Bennett factor supporting preliminary approval of the Settlement is the complexity,

expense, and likely duration of the Derivative Litigation. Shareholder derivative actions are

notoriously complicated and involve sophisticated legal and factual issues that can be litigated to a

conclusion on the merits only at great expense over an extended period of time. The Derivative

Litigation would have been no exception to this general rule. Even Chiquita, the beneficiary of

Plaintiffs' work, would have incurred substantial costs and disruption of its business activities in

connection with producing documents and witnesses for deposition and at trial and advancing

defense costs to each of the twenty-six Individual Defendants. Chiquita would have also suffered

the detrimental effects ofthe diversion of the attention of its executives, directors, and employees, as

well as potential reputational harm. Assuming Plaintiffs were successful in upholding the Amended

Complaint despite the SLC's attempts to dismiss it (which was by no means guaranteed), lengthy

and expensive discovery would occupy many months, if not years, and would include numerous

depositions of fact witnesses and testifying experts. If Plaintiffs were successful in opposing the

Individual Defendants' anticipated motions for summary judgment, a trial could occupy the parties

- 19-530013_6



and their attorneys for weeks, at least. The expense of such a trial to the parties and the consumption

of the Court's resources would have been considerable. Furthermore, any substantial judgment in

favor of Plaintiffs would undoubtedly be the subject of post-trial motions and appeal, which would

further prolong the Derivative Litigation for years. See, e.g., In re Warner Commc 'ns Sec. Litig.,

618 F. Supp. 735, 745 (S.D.N.Y. 1985), affd, 798 F.2d 35 (2d Cir. 1986). This prolonged period of

pretrial proceedings, a lengthy and uncertain trial and potential appeals, would not serve the interests

of the Company and its shareholders when compared to the immediate, certain, and substantial

benefits provided by the proposed Settlement of the Derivative Litigation.

d. The Stage of the Proceedings and the Amount of

Discovery Completed

The final Bennett factor supporting preliminary approval of the proposed Settlement is the

stage oflitigation at the time of the proposed Settlement. While the Settlement comes at a relatively

early stage in the litigation (foreclosing the extraordinary expense of a lengthy discovery period and

trial preparation, as well as the burden on the Court of protracted and complex litigation), counsel for

Plaintiffs and the SLC are well informed and have sufficient information to make an intelligent

evaluation of the Derivative Litigation and the propriety of the proposed Settlement. There is no

minimum amount of formal discovery that must be undertaken to appropriately consider the merits

of the parties' respective claims and defenses. Courts regularly approve settlements where the

parties have adequate information to assess the propriety of settlement. See Perez, 501 F. Supp. 2d

at 1383; Strang v. JHM Mortgage Sec. Ltd. P'ship, 890 F. Supp. 499, 501 (RD. Va. 1995).

Furthermore, Plaintiffs' counsel have extensive experience representing shareholders in derivative

litigation, and as a result of their unparalleled experience in these types of cases, have a unique

insight into the factual and legal issues presented.

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Plaintiffs and Co-Lead Counsel have carefully investigated this case since its inception and

have diligently prosecuted this case since the filing of their initial complaint in October 2007.

Plaintiffs and Co-Lead Counsel have tirelessly sought from the SLC and Chiquita the corporate

governance and compliance changes encompassed in the Stipulation since before April 2009, when

Plaintiffs and the SLC filed an agreed motion adjourning the briefing schedule for the SLC's motion

to dismiss and discovery deadlines, and informed the Court they were engaging in negotiations

regarding potential settlement of the Derivative Litigation. In connection with those discussions,

counsel for the SLC provided thousands of pages of documents for Plaintiffs' and Co-Lead

Counsel's review. In addition, Plaintiffs and Co-Lead Counsel were provided with an opportunity to

review a draft of the SLC Report. As provided in i¡2.3 of the Stipulation, in connection with the

proposed Settlement, counsel for the SLC produced hundreds of documents to Co-Lead Counsel

relevant to the SLC's investigation and on June 10,2010, Co-Lead Counsel deposed a member of

the SLC, Howard W. Barker, Jr. In addition, numerous discussions between Co-Lead Counsel and

counsel for the SLC concerning the Derivative Litigation and its potential settlement further

highlighted the parties' disparate views regarding the legal and factual issues involved in continuing

the litigation.

Having obtained sufficient information to properly evaluate the claims and defenses asserted

in the case, Plaintiffs and the SLC have proposed a settlement of the Derivative Litigation that

constitutes a substantial benefit to Chiquita and its shareholders without the substantial expense, risk,

and uncertainty of continued litigation.

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e. The Settlement Is the Result of Arm's-Length

Negotiations

Finally, in determining whether a proposed settlement is fair, courts often examine whether

the settlement was reached as a result of good faith bargaining at arm's length without collusion.

See Bennett, 737 F .2d at 986. The Settlement negotiations in the Derivative Litigation, which were

extensive, took place at arm's length, relied on the substantial assistance of a highly respected

mediator, and telephone and in-person conferences between Co-Lead Counsel and the SLC's

counseL. Both Co-Lead Counsel and the SLC's counsel have substantial expertise and experience in

litigating complex shareholder derivative cases. As discussed above, there can be no question the

Settlement negotiations were conducted by highly experienced counsel with a thorough

understanding of the strengths and weaknesses of the claims and defenses asserted by the parties.

The Settlement is also a product of significant concessions by Plaintiffs and the SLC. Accordingly,

there is no reason to question the fairness of the Settlement, or to otherwise doubt the good faith

nature of the parties' Settlement negotiations.

D. Submission of the Settlement to Current Chiquita Shareholders IsAppropriate

Pursuant to the Stipulation, Plaintiffs and the SLC recommend approval of the notices

substantially in the forms of Exhibits A- 1 and A-2 to the Stipulation. The Order provides that a copy

of the Notice of Proposed Settlement of Derivative Litigation and Hearing (the "Notice") will be

mailed via first class mail to those Chiquita Shareholders who can be identified through reasonable

effort, which has been generally recognized as the best notice practicable. See, e.g., Turner v.

Murphy Oil USA, Inc., No. 05-4206,2006 U.S. Dist. LEXIS 4472, at *13 (RD. La. Feb. 6,2006)

('''Best notice practicable' generally means notice to each class member by mail, or 'to all class

- 22-530013_6



members whose names and addresses may be ascertained through reasonable effort."'). The Notice

sets forth in detail the Settlement terms and the rights of Chiquita Shareholders, including the date,

time, and location of the fairness hearing, as well as the right to be heard at it. It provides the name

and address of Co-Lead Counsel for inquiries. The Order also provides for publication of the

Summary Notice of Proposed Settlement of Derivative Action in Investor's Business Daily. See,

e.g., Horton v. Metropolitan Life Ins. Co., No. 93-1849-CIV-T-23A, 1994 U.S. Dist. LEXIS 21395,

at * 17 (M.D. Fla. Oct. 25, 1994) ("Supplementing individual notice with publication notice

represents an appropriate balance between protecting class members and making Rule 23

workable."). The form and manner of notice proposed by Plaintiffs and the SLC fulfill all the

requirements of due process and Federal Rule of Civil Procedure 23.1, and thus submission of the

Settlement to Chiquita Shareholders via this notice program is appropriate.

iv. PROPOSED SCHEDULE OF EVENTS

In connection with preliminary approval of the Settlement, Plaintiffs and the SLC

respectfully request the Court to schedule dates by which, inter alia: (1) notice of the Settlement will

be mailed to Chiquita Shareholders and published; (2) Chiquita Shareholders may object to the

Settlement; and (3) a fairness hearing for final approval of the Settlement will be held. The

following schedule, which is similar to those set in other derivative cases and provides due process

to Chiquita Shareholders with respect to their rights concerning the Settlement, is proposed:

EVENT TIMING

Preliminary Approval Order Signed Day 1 (the "Notice Date")

Mail Notice 10 days after the Notice Date

File Initial Pleadings in Support of Final 14 days after the Notice DateApproval of Settlement and Application for Fees

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EVENT TIMING

and Expenses

Publish Summary Notice Within 20 days of the Notice Date

Deadline for Objections to Settlement or Fees 44 days after the Notice Dateand Expenses

Replies to any Objections 60 days after the Notice Date

Fairness Hearing on Final Approval of Court's convenienceSettlement and Application for Fees andExpenses

v. CONCLUSION

F or all the foregoing reasons, Plaintiffs and the SLC respectfully request that the Court grant

the Motion and enter the proposed Order.

DATED: August 5,2010 Respectfully submitted,

ROBBINS GELLER RUDMAN& DOWDLLP

sf David J. GeorgeDAVID J. GEORGE

PAUL J. GELLERFlorida Bar No. [email protected] J. GEORGEFlorida Bar No. [email protected] East Palmetto Park Road, Suite 500Boca Raton, FL 33432Telephone: 561/750-3000

561/750-3364 (fax)

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ROBBINS GELLER RUDMAN&DOWDLLP

PATRICK J. COUGHLIN

KEITH F. PARK

ARTHURC. LEAHYJULIE A. KEARNS655 West Broadway, Suite 1900San Diego, CA 92101Telephone: 619/231-1058

619/231-7423 (fax)

COHEN, PLACITELLA & ROTH, P.C.STEWART L. COHENHARRY M. ROTHMICHAEL CORENSTUART J. GUBERTwo Commerce Square, Suite 29002001 Market StreetPhiladelphia, PAl 9103Telephone: 215/567-3500

215/567-6019 (fax)

Attorneys for Plaintiffs

- 25-530013_6



CERTIFICATE OF SERVICE

I hereby certify that on August 5,2010, I authorized the electronic filing of the foregoing

with the Clerk of the Court using the CMÆCF system which will send notification of such filing to

the e-mail addresses denoted on the attached Electronic Mail Notice List, and I hereby certify that I

caused to be mailed the foregoing document or paper via the United States Postal Service to the non-

CMÆCF participants indicated on the attached Manual Notice List.

I certify under penalty of perjury under the laws of the United States of America that the

foregoing is true and correct. Executed on August 5, 2010.

s/ David J. GeorgeDAVID J. GEORGE

ROBBINS GELLER RUDMAN&DOWDLLP

120 East Palmetto Park Road, Suite 500Boca Raton, FL 33432Telephone: 561/750-3000

561/750-3364 (fax)E-mail:[email protected]

530013_6


CMÆCF - Live Database - flsd- Page 1 of6

Mailing Information for a Case O:08-md-01916-KAM

Electronic Mail Notice List

The following are those who are currently on the list to receive e-mail notices for this case.

. Roger M. [email protected]

. Jose E. Arvelo

[email protected]

. Kathleen Lee Barber

[email protected],[email protected]

. Rachel L. Braunstein

rachel. [email protected]

. Benjamin D. Brown

[email protected]

. Daniel Arthur Casey

[email protected],[email protected],[email protected]

. Judith Brown [email protected]

. Alison K. Clark

[email protected]

. Stewart L. Cohen

[email protected]

. Terry Collingsworth

[email protected].

. Patrick J. Coughlin

[email protected]

. Jonathan W. [email protected]

. John De Leonj lleon [email protected],[email protected],[email protected],[email protected],[email protected]

. Joseph A. DeMaria


https://ecf.flsd.uscourts.gov/cgi-bin/MailList.pl?511 03 5662256729-L _959_0-1 8/4/2010


CM/ECF - Live Database - flsd- Page 2 of6

. Matias Rafael Dorta

[email protected] "

. Jeffrey T. [email protected]

. Agnieszka M. Fryszman

[email protected] '

. David J. George

[email protected],k'[email protected],e_file_ [email protected],[email protected]

. Joshua D. Glatter

[email protected]

. Neil L. Glazer

[email protected].

. Nicholas A. Gravante , Jr

[email protected]

. James Kellogg Green

[email protected]

. Alan Graham [email protected],[email protected]

. Ronald Searle Guralnick

[email protected]

. John E. Hall

[email protected]

. Gregory P. Hansel

[email protected]

. Rene Devlin Harrod

[email protected], [email protected],[email protected]

. David B. Hennes

[email protected]

. Paul L. Hoffman

[email protected]

. Jason [email protected]

. Robert C. Josefsberg


https:/ /ecf.flsd.uscourts.gov/cgi-bin/MailList.pl?511 035662256729-L _959_0-1 8/4/2010


CMJECF - Live Database - flsd- Page 3 of6

. Julie A. [email protected]

. William Bennett King

[email protected],[email protected],[email protected]

. Beth J. [email protected]

. Dianna Walsh [email protected]

. Arthur Leahy

[email protected]

. Gregg H. Levy

[email protected]

. Carrie M. Logan

[email protected]

. Brian D. Long

[email protected]

. Jeffrey B. Maletta

[email protected]

. Jonathan L. Marcus

[email protected]

. Eli R. Mattioli

eli.mattio [email protected]

. Sigrid Stone [email protected]

. William G. McGuinness

[email protected]

. Gina R. Merrill

[email protected]

. Jenny R. Mosier

[email protected]

. Ann O'Connell

[email protected]

. Gary M. [email protected]

https://ecf.flsd.uscourts.gov/cgi-binlMailList.pl?511 035662256729-L _959 _0-1 8/4/2010



. Keith F. Park

[email protected]

. Christopher Stephen Polaszek

cpo [email protected],[email protected],[email protected],[email protected],1\

. Elissa J. Preheimelissa. [email protected]

. Fuad [email protected]

. Cristopher Stephen Rapp

[email protected]

. Ramon Alvaro Rasco

[email protected]

. Peter Raven-Hansen

[email protected]

. Jonathan C. Reiter

[email protected]

. Seth D. Rigrodsky

[email protected]

. Robert Jeffrey Robbins


. Mark Anthony [email protected],[email protected]

. Harry M. Roth

[email protected]

. Peter G.A. Safirstein

[email protected]

. David Joseph Sales

[email protected]

. John Scarola

[email protected]

. Aaron Schlanger

[email protected]

. Stephen H. Schwartz

[email protected]

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CMIECF - Live Database - flsd- Page 5 of6

. Marco [email protected]

. Samantha A. Smith

[email protected]

. Jonathan M. Sperling

[email protected]

. Steven M. Steingard

[email protected]

. Robert M. Stern

[email protected]

. Sidney Alton Stubbs, Jr

sstu [email protected],[email protected]

. Nathaniel A. Tarnor

[email protected]

. Magda Jimenez Train

[email protected]

. William J. [email protected],[email protected]

. Robert William Wilkins

rwi [email protected],[email protected]

. Paul David Wolf

[email protected]

." . Lee S. Wolosky

[email protected]

. Eric L. Zagar

[email protected]

Manual Notice List

The following is the list of parties who are not on the list to receive e-mail notices for this case (whotherefore require manual noticing). You may wish to use your mouse to select and copy this list intoyour word processing program in order to create notices or labels for these recipients.

Arturo CarrilloColombían Instítute of Internatíonal Law5425 Connectícut Avenue NW

Suíte 219washíngton, DC 20015

https://ecf.flsd.uscourts.gov/cgi-binlMailList.pl?51 1035662256729-L _959_0-1 8/4/2010



William K. CavanaghCavanagh & 0' Hara407 E Adams StreetSpringfield, IL 62701

Karen Caudill DyerBoies Schiller & Flexner390 North Orange AvenueSuite 1890Orlando, FL 32801

Hawaii Annuity Trust Fund for Operating Engineers

Richard HerzEarth Rights International1612 K Street NW

Suite 401Washington, DC 20006

Michael G. LenettCuneo Gilbert & Laduca LLP507 C Street NEWashington, DC 20002

Molly McOwenCohen Milstein Hausfeld & Toll1100 New York Avenue NW

Suite 500 West TowerWashington, DC 20005-3934

Samuel Meirowi tzOsen LLC700 Kinderkamack RoadOrandell, NJ 07649

John P. Piercepierce Law Group4641 Montgomery AvenueSuite 500Bethesda, MD 20814

Robin Winches terBarroway Topaz Kessler Meltzer & Check LLP280 King of Prussia RoadRadnor, PA 19087

Stephen N. ZackBoies Schiller & Flexner100 SE 2nd StreetSuite 2800 Bank of America TowerMiami, FL 33131-2144

https://ecf.flsd.uscourts.gov/cgi-binlMaiIList.pl?511 035662256729-L _959_0-1 8/4/2010





IN RE: CHIQUITA BRANDSINTERNATIONAL, INC., ALIEN TORTSTATUTE AND SHAREHOLDERDERIV A TIVE LITIGATION


DERIVATIVE ACTIONS.

/

(PROPOSED) ORDER PRELIMINARILY APPROVING DERIV ATIVE SETTLEMENT ANDPROVIDING FOR NOTICE

531129_2

Case 0:08-md-01916-KAM Document 343-1 Entered on FLSD Docket 08/05/2010 Page 1 of 33


WHEREAS, the Settling Parties have made application, pursuant to Federal Rule of Civil

Procedure 23.1, for an order approving the settlement (the "Settlement") of the Derivative Litigation,

in accordance with the Stipulation and Agreement of Settlement dated as of April 19, 2010 (the

"Stipulation"), which, together with the Exhibits annexed thereto, sets forth the terms and conditions

for a proposed Settlement;

WHEREAS, all capitalized terms contained herein shall have the same meanings as set forth

in the Stipulation (in addition to those capitalized terms defined herein); and

WHEREAS, the Court having read and considered the Stipulation and the Exhibits annexed

thereto:

NOW THEREFORE, IT is HEREBY ORDERED:

1. The Court does hereby preliminarily approve, subject to further consideration at the

Settlement Hearing described below, the Stipulation and the Settlement set forth therein, including

the terms and conditions for settlement of the Derivative Litigation.

2. A hearing (the "Settlement Hearing") shall be held before this Court on

,2010 at _:__.m. at the Paul G. Rogers Federal Building and U.S. Courthouse, 701

Clematis Street, Courtroom 4, West Palm Beach, Florida to determine: (i) whether the Settlement of

the Derivative Litigation on the terms and conditions provided for in the Stipulation, including the

provision for the payment of fees and expenses to Plaintiffs' counsel, is fair, reasonable and adequate

to Chiquita Shareholders and to Chiquita and should be approved by the Court; and (ii) whether a

Judgment as provided in 'iIl. 7 of the Stipulation should be entered herein.

3. The Court approves, as to form and content, the Notice of Proposed Settlement of

Derivative Litigation and Hearing ("Notice") annexed as Exhibit A-I hereto and the Summary

- 1 -

531129_2



Notice of Proposed Settlement of Derivative Litigation ("Summary Notice") annexed as Exhibit A-2

hereto, and finds that the mailing and publication of these notices, substantially in the manner and

form set forth in this Order, meet the requirements of Federal Rule of Civil Procedure 23.1 and due

process, and are the best notice practicable under the circumstances and shall constitute due and

sufficient notice to all Persons entitled thereto.

4. The firm of The Altman Group, Inc. ("Notice Administrator") is hereby appointed to

supervise and administer the notice procedure as more fully set forth below:

(a) Not later than ,2010, the Notice shall be mailed to all Chiquita

shareholders as of April 19, 2010 who can be identified with reasonable effort;

(b) Not later than ,2010, the Summary Notice shall be published

once in Investor's Business Daily; and

( c) At least seven (7) days prior to the Settlement Hearing, counsel for the SLC

shall serve on Co-Lead Counsel, counsel for the Individual Defendants, and Chiquita and file with

the Court proof, by affidavit or declaration, of such mailing and publishing.

5. The notice described in 'iI'iI4(a) and (b), above, shall be provided at Chiquita's

expense.

6. All Chiquita Shareholders shall be bound by all orders, determinations and judgments

in the Derivative Litigation concerning the Settlement, whether favorable or unfavorable to the

Chiquita Shareholders.

7. Pending final determination of whether the Settlement should be approved, no

Chiquita Shareholder, either directly, representatively, or in any other capacity, shall commence or

- 2-531129_2



prosecute against any of the Released Persons, any action or proceeding in any court or tribunal

asserting any of the Released Claims.

8. All papers in support of the Settlement shall be filed with the Court and served on or

before ,2010.

9. Any Chiquita Shareholder may appear and show cause, ifhe, she or it has any, why

the Settlement of the Derivative Litigation should not be approved as fair, reasonable and adequate,

or why a Judgment should not be entered thereon, provided, however, that no Chiquita Shareholder

shall be heard or entitled to contest the approval of the terms and conditions of the Settlement, or, if

approved, the Judgment to be entered thereon approving the same, unless that Person has, on or

before ,2010, filed with the Clerk of the Court and served on the following counsel

(delivered by hand or sent by first class mail) written objections and copies of any papers and briefs

in support thereof:

ROBBINS GELLER RUDMAN & DOWD LLPKEITH F. PARK

ARTHUR C. LEAHY655 West Broadway, Suite 1900San Diego, CA 92101

COHEN, PLACITELLA & ROTH, P.C.STEWART L. COHENHARRY M. ROTHTwo Commerce Square, Suite 29002001 Market StreetPhiladelphia, PA 19103

Co-Lead Counsel for Plaintiffs in the Derivative Litigation

- 3 -531129_2


531129_2


FRIED, FRANK, HARRIS, SHRIVER& JACOBSON LLP

WILLIAM G. MCGUINNESSDAVID B. HENNESOne New York PlazaNew York, NY 10004

Attorneys for the Chiquita Special Litigation Committee

COVINGTON & BURLING LLPJONATHANM. SPERLING620 Eighth AvenueNew York, NY 10018

Attorneys for Fernando Aguirre

ARNOLD & PORTER LLPELISSA J. PREHEIM555 12th Street NWWashington, DC 20004

Attorneys for Cyrus F. Freidheim, Jr., Robert F. Kistinger, Warren J Ligan, Carl HLindner, Keith E. Lindner, Robert W. Olson, James B. Riley, Fred J Runk, William A.

Tsacalis, Steven G. Warshaw, and Jeffrey M Zalla

K&L GATES LLPJEFFREY B. MALETTA1601 K Street NWWashington, DC 20006

Attorneys for Morten Arntzen, Jeffrey D. Benjamin, Robert W. Fisher, Durk I Jager,Rohit Manocha, Jaime Serra, Steven P. Stanbrook, Gregory C. Thomas, William W.

Verity, and Oliver W. Waddell

O'MEL VENY & MYERS LLPROBERT M. STERN

1625 Eye Street NWWashington, DC 20006

Attorneys for Roderick M Hills

- 4-



K&L GATES LLPELI R. MATTIOLI

599 Lexington AvenueNew York, NY 10022

Attorneys for John W. Braukman III

RICHMAN GREER P.A.

ALAN G. GREER201 S. Biscayne BoulevardSuite 1000Miami, FL 33131

Attorneys for Clare M Hasler and Howard W. Barker, Jr.

The written objections and copies of any papers and briefs in support thereof to be filed in

Court shall be delivered by hand or sent by first class mail to:

CLERK OF THE COURTUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA701 Clematis Street, Room 202West Palm Beach, FL 33401

Any Chiquita Shareholder who does not make his, her or its objection in the manner provided herein

shall be deemed to have waived such objection and shall forever be foreclosed from making any

objection to the fairness, reasonableness or adequacy of the Settlement as incorporated in the

Stipulation, but shall otherwise be bound by the Judgment to be entered and the releases to be given.

10. All replies to any objections shall be filed and served on or before ,2010.

11. Neither the Stipulation, nor any of its Exhibits (including but not limited to the

Governance and Compliance Changes attached as Exhibit C thereto), terms or provisions, nor any of

the negotiations or proceedings connected with it, shall be deemed, used or construed as an

admission or concession by the Individual Defendants, Chiquita, or the SLC, or as evidence, of the

- 5 -531129_2



truth or validity of any of the allegations in the Derivative Litigation, or of any liability, fault, or

wrongdoing of any kind.

12. If the Settlement, including any amendment made in accordance with the Stipulation,

is not approved by the Court or shall not become Final or otherwise not become effective for any

reason whatsoever, the Settlement (including any modification thereof made with the consent of the

parties as provided for in the Stipulation) and any actions taken or to be taken in connection

therewith (including this Notice Order and any judgment entered herein) shall be terminated and

shall become void and of no further force and effect, except for Chiquita's obligation to pay for any

expenses incurred in connection with publishing the notices provided for by this Notice Order. In

that event, pursuant to Federal Rule of Evidence 408 and all analogous state laws, neither the

Stipulation, nor any provision contained in the Stipulation, nor any action undertaken pursuant

thereto, nor the negotiation thereof by any party, shall be deemed an admission or received as

evidence in this or any other action or proceeding.

13. The Court reserves the right to adjourn the date of the Settlement Hearing or modify

any other dates set forth herein without further notice to the Chiquita Shareholders, and retains

jurisdiction to consider all further applications arising out of or connected with the Settlement. The

Court may approve the Settlement, with such modifications as may be agreed to by the Settling

Parties, if appropriate, without further notice to the Chiquita Shareholders.

IT IS SO ORDERED.

DATED:THE HONORABLE KENNETH A. MARRA

UNITED STATES DISTRICT JUDGE

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EXHIBIT A-I







DERIV ATIVE ACTIONS.

/

NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE LITIGATION AND HEARING

EXHIBIT A-I

531131_2



TO: ANY PERSON WHO OWNED CHIQUITA BRANDS INTERNATIONAL, INC.COMMON STOCK AS OF OR AT ANY POINT PRIOR TO APRIL 19, 2010("CHIQUITA SHAREHOLDER")

PLEASE READ THIS NOTICE CAREFULLY

THIS NOTICE RELATES TO THE PENDENCY AND PROPOSED SETTLEMENT OFTHIS SHAREHOLDER DERIVATIVE LITIGATION

YOU ARE HEREBY NOTIFIED, pursuant to Federal Rule of Civil Procedure 23.1 and an

Order of the United States District Court for the Southern District of Florida (the "Court"), that a

proposed settlement (the "Settlement") has been reached between Plaintiffs, on behalf of Chiquita

Brands International, Inc. ("Chiquita" or the "Company"), the Individual Defendants (defined

below) and Chiquita through the Special Litigation Committee of the Board of Directors of Chiquita

(the "SLC").

A hearing (the "Settlement Hearing") will be held on , 2010, at _:_ _.m. at the

Paul G. Rogers Federal Building and U.S. Courthouse, Courtroom 4, 701 Clematis Street, West

Palm Beach, Florida to determine: (i) whether the Settlement of the Derivative Litigation on the

terms and conditions provided for in the Stipulation and Agreement of Settlement dated as of April

19, 2010 (the "Stipulation") (including the provision for the payment of up to $4,000,000.00 to

Plaintiffs' counsel for fees and expenses), is fair, reasonable and adequate to Chiquita Shareholders

and to Chiquita and should be approved by the Court; and (ii) whether a Judgment as provided in the

Stipulation should be entered dismissing the Derivative Litigation.

I. BACKGROUND

In October and December of2007 and January of2008, certain shareholders ofthe Company

filed four shareholder derivative lawsuits in various U.S. District Courts, captioned (i) City of

Philadelphia Public Employees Retirement System, derivatively on behalf of Chiquita Brands

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International, Inc. v. Aguirre, et ai., Case No. 1:07-cv-851 (S.D. Ohio), (ii) Sheet Metal Workers

Local #218(S) Pension Fund, derivatively on behalf of Chiquita Brands International, Inc. v. Hills,

et al., Case NO.1 :07-cv-01957 (D.D.C.), (iii) Henry Taylor, derivatively on behalf of Chiquita

Brands International, Inc. v. Aguirre, et al., Case No. 3:07-cv-06002-FLW-JJH (D.N.J.), and (iv)

Hawaii Annuity Trust Fund for Operating Engineers, derivatively on behalf of Chiquita Brands

International, Inc. v. Hills, et al., Civil No. 1:08-cv-00081-PLF (D.D.C.).

By Orders dated February 20 and 27,2008, the U.S. Judicial Panel on Multidistrict Litigation

transferred the above-described shareholder derivative lawsuits (together with certain other lawsuits

that are not the subject of the Stipulation) to the U.S. District Court for the Southern District of

Florida (the "Court") for pre-trial purposes. These cases are currently centralized for pre-trial

purposes before Judge Kenneth Marra and captioned In re: Chiquita Brands International, Inc. Alien

Tort Statute and Derivative Litigation, No. 08-0191 6-Marra/Johnson (the "Derivative Litigation").

In December of 2007, the Service Employees International Union filed a shareholder

derivative lawsuit in the Ohio Court of Common Pleas captioned Servo Employees Int'l Union,

derivatively on behalf of Chiquita Brands International, Inc. V. Hills, et al., No. A07-11383 (Ct. of

Common Pleas, Hamilton County Ohio) (the "Ohio Action"). By Order entered February 26, 2008,

the court in the Ohio Action stayed the Ohio Action pending resolution of the Derivative Litigation.

By order dated August 12, 2008, the Court appointed the law firms of Coughlin, Stoia,

Geller, Rudman & Robbins LLp1 and Cohen, Placitella & Roth, P.C. as co-lead counsel in the

Derivative Litigation ("Co-Lead Counsel").

Now known as Robbins Geller Rudman & Dowd LLP.

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On September 11, 2008, Plaintiffs filed a verified consolidated shareholder derivative

complaint (the "Amended Complaint") in the Derivative Litigation. The Amended Complaint

asserts two causes of action on behalf of Chiquita, breach of fiduciary duty and corporate waste, and

asserts those claims against twenty-six (26) current and former Chiquita directors and officers.

There are no wrongful acts alleged, claims asserted, or defendants named in the Ohio Action that are

not alleged, asserted, and named, respectively, in the Amended Complaint.

The allegations in the Amended Complaint arise principally out of payments made by

Chiquita's Colombian subsidiary, C.l. Bananos de Exportación S.A. ("Banadex"), to left-wing

guerrilla and right-wing paramilitary groups, including the Fuerzas Armadas Revolucionarias de

Colombia, or the Revolutionary Armed Forces of Colombia, known as the "F ARC," and the

Autodefensas Unidas de Colombia, or the United Self-Defenses of Colombia, known as the "AUC,"

from approximately 1989 through January 2004 (the "Colombia Payments").

In response to the filing of the Derivative Litigation and the filing of two substantially similar

state court actions (the Ohio Action and Hawaii Annuity Trust Fund for Operating Engineers v.

Hills, et aI., No. c-379-07 (N.J. Super Ct. Ch. Div.)), on April 3, 2008, the Chiquita Board of

Directors adopted a resolution (the "Resolution"), which established the SLC. The Resolution

delegated to the SLC the authority and power to investigate, review, and analyze the facts,

allegations, and circumstances that are the subject ofthe Derivative Litigation and granted it "the full

and exclusive authority to consider and determine whether or not the prosecution of the claims

asserted in the Derivative Litigation or any other claims related to the facts, allegations, and

circumstances of the Derivative Litigation is in the best interests of the Company and its

shareholders, and what action the Company should take with respect thereto. . . ." The Resolution

- 3 -531131_2



designated non-management Chiquita directors Howard W. Barker, Jr., William H. Camp, and Clare

M. Hasler as members of the SLC.

From May 2008 through February 2009 the SLC, with the assistance of its independent

counsel, Fried, Frank, Harris, Shriver & Jacobson LLP, conducted a detailed and thorough factual

and legal investigation in order to determine whether it is in the best interests of the Company and its

shareholders to pursue, settle, or dismiss any or all of the claims asserted in the Amended Complaint.

During that investigation, the SLC and its counsel conducted seventy interviews of relevant

witnesses and reviewed more than 750,000 pages of documents. During the course of the SLC's

investigation, the SLC provided Co-Lead Counsel the opportunity to provide input concerning the

scope and direction of its investigation and periodically updated Co-Lead Counsel with respect to its

factual findings through in-person and telephonic meetings.

Following the conclusion of its investigation and after considering the factual and legal

merits of each claim against each of the Individual Defendants (defined below) alleged in the

Derivative Litigation, the SLC, in the exercise of its business judgment, concluded that the Amended

Complaint should be dismissed in its entirety. Consistent with that conclusion, on February 25,

2009, the SLC filed a motion to dismiss the Amended Complaint. Accompanying the SLC's motion

to dismiss, the SLC filed a detailed written report of its investigation and conclusions (the "SLC

Report"). The SLC's motion to dismiss remains pending before the Court.

On or before March 31, 2009, Plaintiffs in the Derivative Litigation and the SLC served

certain discovery requests and agreed to a briefing schedule with respect to the SLC's motion to

dismiss.

- 4-531131_2



Following the filing of the SLC's motion to dismiss and the SLC Report, Plaintiffs and the

SLC engaged in extensive discussions regarding a potential resolution of the Derivative Litigation.

On October 5, 2009, the Settling Parties participated in a mediation before the Honorable Layn R.

Phillips, a former United States District Judge, in an attempt to reach a settlement. Although a

settlement was not reached at the mediation, following the mediation the Settling Parties continued

to negotiate in good faith regarding a potential resolution of the Derivative Litigation and the Ohio

Action.

On December 23,2009, the Parties entered into a Memorandum of Understanding pursuant

to which they agreed to settle the Derivative Litigation and the Ohio Action, subject to execution of

the Stipulation.

Plaintiffs and the SLC agree that it is in the best interests of Chiquita and its shareholders to

settle the Derivative Litigation and Ohio Action on the terms described below (the "Settlement"),

and the SLC believes that the Settlement, taken as a whole, including the payment of attorneys' fees

and expenses of up to $4 million to Plaintiffs' counsel, is fair and reasonable and is in the best

interests of Chiquita and its shareholders.

II. CLAIMS OF PLAINTIFFS AND BENEFITS OF SETTLEMENT

The Plaintiffs believe that the claims asserted in the Derivative Litigation have merit.

However, Plaintiffs recognize and acknowledge the expense and length of continued proceedings

necessary to prosecute the Derivative Litigation against the Individual Defendants through trial and

appeaI. Plaintiffs also recognize and acknowledge that the SLC's report sets forth a basis from

which it could be concluded that the members of the SLC were independent and disinterested,

investigated in good faith and with due care, that the SLC's conclusion that the claims asserted in the

- 5 -531131_2



Derivative Litigation should be dismissed was reasonable, and that, as a result, the Court could have

dismissed the Amended Complaint. Plaintiffs also have taken into account the uncertain outcome

and the risk of any litigation, especially in complex actions such as the Derivative Litigation, as well

as the difficulties and delays inherent in such litigation. Plaintiffs also are mindful of the inherent

problems of proof of, and possible defenses to, the violations asserted in the Derivative Litigation.

Plaintiffs believe that the Settlement set forth in the Stipulation addresses many of the issues raised

in the Derivative Litigation and the Ohio Action and confers substantial benefits upon, and is in the

best interests of, Chiquita and its shareholders.

III. TERMS OF THE PROPOSED SETTLEMENT

The full terms and conditions of the Settlement are embodied in the Stipulation, which is on

file with the Court and may also be accessed on the internet at

www.chiquitaderivativesettlement.com. The following is a summary of the terms of the Stipulation.

A. Definitions

1. "Chiquita" means Chiquita Brands International, Inc.

2. "Co-Lead Counsel" means Robbins Geller Rudman & Dowd LLP, Keith F. Park,

Arthur C. Leahy, 655 W. Broadway, Suite 1900, San Diego, California 92101 and Cohen, Placitella

& Roth, P.C., Stewart L. Cohen, Two Commerce Square, Suite 2900, 2001 Market Street,

Philadelphia, P A 19103.

3. "Effective Date" means the first date by which all of the events and conditions

specified in 'iI5. 1 of the Stipulation have been met and have occurred.

4. "Final" means: (i) if no appeal is filed, that the applicable time for the filing or

noticing of any appeal from the Judgment has expired; or (ii) if an appeal is filed, that (a) the

- 6 -531131_2



Judgment (as defined below), has been finally affirmed on appeal or that the appeal has been

dismissed, and (b) that the time within which to petition for rehearing, rehearing en banc, and for a

writ of certiorari to review the Judgment has expired or all such petitions have been denied or, if a

petition for a writ of certiorari is granted, that the Judgment has been affirmed pursuant to that grant.

5. "Individual Defendants" means Fernando Aguirre, Morten Arntzen, Howard W.

Barker, Jr., Jeffrey D. Benjamin, John W. Braukman III, Robert W. Fisher, Cyrus Freidheim, Jr., Dr.

Clare M. Hasler, Roderick M. Hills, Durk L. Jager, Robert F. Kistinger, Warren J. Ligan, Carl H.

Lindner, Keith E. Lindner, Rohit Manocha, Robert W. Olson, James B. Riley, Fred J. Runk, Jamie

Serra, Steven P. Stanbrook, Gregory C. Thomas, William A. Tsacalis, William W. Verity, Oliver W.

Waddell, Steven G. Warshaw, and Jeffrey M. Zalla.

6. "Judgment" means the final judgment to be rendered by the Court in the Derivative

Litigation.

7. "N ominal Defendant" means Chiquita.

8. "Person" means an individual, corporation, limited liability company, professional

corporation, limited liability partnership, partnership, limited partnership, association, joint stock

company, estate, legal representative, trust, unincorporated association, government or any political

subdivision or agency thereof, and any business or legal entity and their spouses, heirs, predecessors,

successors, representatives, or assignees.

9. "Related Parties" means any Individual Defendant's, Chiquita's or the SLC's

respective predecessors, successors, parents, subsidiaries, affiliates and agents (including, without

limitation, any investment bankers, accountants, auditors, insurers, reinsurers or attorneys and any

- 7 -531131_2



past, present or future officers, directors and employees of Chiquita, their predecessors, successors,

parents, subsidiaries, affiliates, agents, and their subsidiaries, affiliates and agents).

10. "Released Claims" means all known and unknown claims, rights and causes of action

for damages, injunctive relief, or any other legal or equitable remedies against the Released Persons

which have been or could have been asserted by any current or former Chiquita shareholder

derivatively on behalf of the Company, based upon, arising from, or related to the conduct at issue in

the Derivative Litigation, including, without limitation, any allegations of breach of fiduciary duty or

corporate waste arising from the Colombia Payments, the sale of Banadex, the guilty plea entered

into by Chiquita in March 2007, Chiquita's acquisition and sale of Atlanta AG, the payment of

severance and/or compensation to the Individual Defendants or any other individual alleged to have

been involved in any of the conduct at issue, or Chiquita's public disclosures regarding any of the

conduct at issue in the Derivative Litigation.

11. "Released Persons" means the Individual Defendants, Chiquita, the SLC (which is

comprised of William H. Camp, Howard W. Barker, Jr. and Dr. Clare Hasler) and their Related

Parties.

12. "Unknown Claims" means any Released Claims which the Plaintiffs, Chiquita

Shareholders, or Chiquita do not know or suspect to exist in his, her or its favor at the time of the

release of the Released Persons which, ifknown by him, her or it, might have affected his, her or its

settlement with, and release of, the Released Persons or might have affected his, her or its decision

not to object to this Settlement.

- 8 -531131_2



B. The Settlement

1. The Settlement

a. Corporate Governance

Plaintiffs and the SLC have reached agreement regarding certain corporate governance and

compliance changes, as set forth in Exhibit C to the Stipulation (the "Governance and Compliance

Changes"). The Governance and Compliance Changes may be viewed in their entirety at

www.chiquitaderivativesettlement.com. In general, and among other things, the Governance and

Compliance Changes create, modify, or formalize policies and practices with respect to: the

composition of, membership on, or independence of, Chiquita's Board of Directors; internal

controls, including training programs for 2010 on some or all of the following topics: "Working

with Agents and Intermediaries" (FCP A focus), "Chiquita's Code of Conduct," "Antitrust Policies"

and "US Trade Regulations" (OFAC focus), Chiquita's whistleblower program, screening of third-

party payments, and related reporting obligations; compliance and ethics; the conduct of shareholder

meetings; and director compensation. In connection with the Settlement, except as otherwise

specified herein and in Exhibit C to the Stipulation, the Company shall, within one hundred eighty

(180) days of the Effective Date, adopt the Governance and Compliance Changes. The SLC

acknowledges that the pendency ofthe Derivative Litigation and negotiations with Co-Lead Counsel

caused the Governance and Compliance Changes and that the Governance and Compliance Changes

constitute a substantial benefit to Chiquita.

b. Presentation to Chiquita's Board of Directors

Co-Lead Counsel will be allowed to make a presentation to the full Board on two further

governance and compliance changes proposed by Co-Lead Counsel: (i) separation of the Chief

- 9-531131_2



Executive and Chairman roles at the Company, and (ii) the institution of majority voting in contested

director elections. The presentation will take place before the Effective Date, unless the Parties are

unable to coordinate such a presentation before that time.

c. Discovery

The SLC will provide to Co-Lead Counsel the following discovery: (i) one deposition of an

SLC member; (ii) all documents cited in the SLC Report; (iii) all memoranda of interviews

conducted by the SLC and its counsel during the course of its investigation; and (iv) all minutes of

SLC meetings, in order for Plaintiffs to confirm the fairness and reasonableness of the Settlement.

After having had the opportunity to review the foregoing documents, Co-Lead Counsel may request,

and upon such request the SLC shall provide, copies of (i) the Company's insurance policies that

cover claims alleged in the actions brought against the Company under the Alien Tort Statute, 28

U.S.C. § 1350, or the Antiterrorism Act, 18 U.S.C. §2333, that have been centralized in this Court

along with the Derivative Litigation (the "ATS Litigation"), (ii) all pleadings filed in the case

captioned Chiquita Brands Intl, Inc. v. Federal Ins. Co. et al., Case No. A0808934 (Ct. Common

Pleas, Hamilton County Ohio), and (iii) all coverage correspondence between the Company and its

insurance carriers regarding coverage of the claims alleged against the Company in the A TS

Litigation (all discovery referred to in this paragraph is defined as the "Settlement Related

Discovery"). The Settlement Related Discovery shall be provided pursuant to a protective order

entered by the Court pursuant to Federal Rule of Evidence 502( d). No discovery other than the

Settlement Related Discovery as described in this paragraph shall be taken.

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d. Dismissal of Ohio Action

Within ten days following the Effective Date of the Settlement, plaintiff in the Ohio Action

shall petition the court to dismiss the Ohio Action with prejudice and without costs to any party on

the expressly-stated grounds that the Court's approval of the Settlement under Federal Rule of Civil

Procedure 23.1 is binding on all current and former Chiquita shareholders, including without

limitation the Service Employees International Union.

e. Attorneys' Fees & Expenses

Chiquita, or any successor in interest, and/or Chiquita's D&O insurer will payor cause to be

paid to Plaintiffs' counsel a sum of up to $4,000,000.00 as ordered by and subject to the approval of

the Court, in full settlement of Plaintiffs' claim for attorneys' fees and expenses (referred to herein as

the "Fee and Expense Award"). Plaintiffs and Plaintiffs' counsel have agreed that they will not

request that the Court approve payment of attorneys' fees and expenses, or reimbursement or

compensation for any other costs or expenses, in excess of $4,000,000.00, as provided for in this

Paragraph, both in the Court and on any appeaI. Defendants have agreed not to oppose Plaintiffs'

counsel's request for such approval in an amount not exceeding $4,000,000.00, both in the Court and

on any appeaI. The Settling Parties negotiated the provisions related to the Fee and Expense Award

after they agreed to other substantive terms of the Stipulation.

iv. RELEASES

The full terms of the dismissal and release of claims are set forth in the Stipulation. The

following is only a summary.

Upon the Effective Date of the Settlement, Chiquita, the Plaintiffs and all Chiquita

Shareholders will release the Released Claims against the Released Persons, both as defined above.

- 11 -531131_2



Moreover, the judgment to be entered upon approval of the Settlement will preclude the filing of any

action purporting to litigate the Released Claims against the Released Persons. Upon the Effective

Date, each of the Released Persons will release claims against Plaintiffs and their counsel from all

claims relating to or arising out of, or connected with the institution, prosecution, assertion,

settlement or resolution of the Derivative Litigation, the Ohio Action and/or the Released Claims.

With respect to any and all Released Claims, the Settling Parties stipulate and agree that,

upon the Effective Date, the Plaintiffs, Chiquita Shareholders, and Chiquita shall be deemed to have,

and by operation of the Judgment shall have, waived the provisions, rights and benefits ofCalifornIa

Civil Code § 1 542, which provides:

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THECREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HERFAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN

BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HERSETTLEMENT WITH THE DEBTOR.

The Plaintiffs, Chiquita Shareholders, and Chiquita shall be deemed to have, and by operation of the

Judgment shall have, waived any and all provisions, rights and benefits conferred by any law of any

state or territory of the United States, or principle of common law, which is similar, comparable or

equivalent to California Civil Code § 1 542. The Plaintiffs, Chiquita Shareholders, and Chiquita may

hereafter discover facts in addition to or different from those which he, she or it now knows or

believes to be true with respect to the Released Claims but the Plaintiffs, Chiquita Shareholders, and

Chiquita upon the Effective Date, shall be deemed to have, and by operation of the Judgment shall

have, fully, finally, and forever settled and released any and all Released Claims known or unknown,

suspected or unsuspected, contingent or non-contingent, accrued or unaccrued, whether or not

concealed or hidden, which now exist, or heretofore have existed upon any theory oflaw or equity

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now existing or coming into existence in the future, including, but not limited to, conduct which is

negligent, intentional, with or without malice, or a breach of any duty, law or rule, without regard to

the subsequent discovery or existence of such different or additional facts. The Plaintiffs, Chiquita

Shareholders, and Chiquita shall be deemed by operation of the Judgment to have acknowledged that

the foregoing waivers were separately bargained for and are key elements of the Settlement of which

this release is a part.

V. THE HEARING AND YOUR RIGHTS AS CHIQUITA SHAREHOLDERS

A hearing will be held on ,2010, at _:__.m. before the Honorable Kenneth A.

Marra, United States District Judge, at the Paul G. Rogers Federal Building and Courthouse,

Courtroom 4, 701 Clematis Street, West Palm Beach Florida, for the purpose of determining: (i)

whether the Settlement of the Derivative Litigation on the terms and conditions provided for in the

Stipulation, including the provision for the payment of attorneys' fees and expenses to cover all

attorneys' fees and expenses of all counsel to plaintiffs in both the Derivative Litigation and the

Ohio Action is fair, reasonable and adequate to the Chiquita Shareholders and to Chiquita and should

be approved by the Court; and (ii) whether a Judgment as provided for in the Stipulation should be

entered dismissing the Derivative Litigation with prejudice. The hearing may be adjourned from

time to time by the Court at the hearing or any adjourned session thereof without further notice other

than by announcement at the hearing of such adjournment.

Any beneficial owner of Chiquita common stock as of or at any point prior to April 19, 2010

may appear at the hearing and be heard as to whether the proposed Settlement should be approved,

provided, however, that no such beneficial owner shall be heard unless, on or before

2010, his, her or its objection or opposition is made in writing and is filed with the Court at the

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531131_2



address shown below, together with copies of any supporting papers and briefs upon which he, she

or it intends to rely and a sworn statement attesting to the date of purchase by such beneficial owner

of his, her or its Chiquita common stock and his, her or its continued ownership thereof. In addition,

such beneficial owner shall show due proof of service, on or before the aforesaid date, of copies of

such objection or opposition, supporting papers and briefs, and proof of purchase and continued

ownership of Chiquita common stock upon each of the following:

CLERK OF THE COURTUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA701 Clematis Street, Room 202West Palm Beach, FL 33401



COHEN, PLACITELLA & ROTH, P.e.

STEWARTL. COHENHARRY M. ROTHTwo Commerce Square, Suite 29002001 Market StreetPhiladelphia, PAl 91 03





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531131_2


COVINGTON & BURLING LLPJONATHANM. SPERLING620 Eighth AvenueNew York, NY 10018



Attorneysfor Cyrus F. Freidheim, Jr., Robert F. Kistinger, Warren J Ligan, Carl HLindner, Keith E. Lindner, Robert W. Olson, James B. Riley, Fred J Runk, William A.











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RICHMAN GREER P.A.ALAN G. GREER201 S. Biscayne BoulevardSuite 1000Miami, FL 33131


Any Chiquita shareholder who does not make his, her or its objection or opposition in the

manner provided herein shall be deemed to have waived any and all objections and opposition, and

shall be forever foreclosed from making any objection to the fairness, reasonableness and adequacy

of the proposed Settlement.

VI. DISMISSAL & RELEASE

Should the Settlement be approved by the Court following the Settlement Hearing, the Court

will enter a Final Order and Judgment that:

1. Approves the Settlement as fair, reasonable and adequate to Chiquita and its

shareholders;

2. Releases and discharges each of the Released Persons from any and all liability with

respect to the Released Claims (including Unknown Claims); and

3. Permanently bars and enjoins the institution or prosecution against the Released

Persons of any action asserting or relating in any way to the Released Claims (including Unknown

Claims).

4. In the event the Settlement is not approved or such approval does not become Final,

then the Settlement shall be of no further force and effect, and each party then shall be returned to

his, her or its respective position prior to the Settlement without prejudice and as if the Settlement

had not been entered into.

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VII. SPECIAL NOTICE TO NOMINEES

If you held any Chiquita common stock as nominee for a beneficial owner of Chiquita

common stock as of or at any point prior to April 19,2010, then, within ten (10) days after you

receive this Notice, you must either: (1) send a copy of this Notice by first class mail to all such

Persons; or (2) provide a list of the names and addresses of such Persons to the Notice

Administrator:

Chiquita Derivative LitigationNotice Administratorc/o The Altman Group, Inc.1200 Wall Street West, 3rd FloorLyndhurst, NJ 07071

If you choose to mail the Notice yourself, you may obtain from the Notice Administrator

(without cost to you) as many additional copies of these documents as you will need to complete the

mailing.

Regardless of whether you choose to complete the mailing yourself or elect to have the

mailing performed for you, you may obtain reimbursement for or advancement of reasonable

administrative costs actually incurred or expected to be incurred in connection with forwarding the

Notice and which would not have been incurred but for the obligation to forward the Notice, upon

submission of appropriate documentation to the Notice Administrator.

VIII. INJUNCTION AGAINST CERTAIN OTHER LITIGATION

The Court has entered an order barring and enjoining all Chiquita Shareholders from

commencing, prosecuting or instigating any action in any court or tribunal asserting any Released

Claims against any Released Persons, pending approval of the Settlement by the Court.

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IX. EXAMINATION OF PAPERS AND INQUIRIES

For a more detailed statement of the matters involved in the Derivative Litigation, reference

is made to the pleadings, to the Stipulation and to all other papers publicly filed in the Derivative

Litigation, which may be inspected at the Office of the Clerk for the United States District Court for

the Southern District of Florida, 701 Clematis Street, Room 202, West Palm Beach, Florida, during

regular business hours of each business day. Pleadings and other papers regarding the settlement

may also be accessed on the internet at www.chiquitaderivativesettlement.com.

Any inquiry concerning the Derivative Litigation should be addressed to a representative of

Plaintiffs' Counsel: Robbins Geller Rudman & Dowd LLP, 655 W. Broadway, Suite 1900, San

Diego, California 92101, Attention: Rick Nelson.

PLEASE DO NOT CONTACT THE COURT OR THE CLERK OF THE COURT

REGARDING THIS NOTICE

DATED: BY ORDER OF THE COURTUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

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531131_2


EXHIBIT A-2







DERIVATIVE ACTIONS.

/

SUMMARY NOTICE OF PROPOSED SETTLEMENT OF DERIVATIVE ACTION

EXHIBIT A-2

531132_2



TO: ANY PERSON WHO OWNED CHIQUITA BRANDS INTERNATIONAL, INC.COMMON STOCK AS OF OR AT ANY POINT PRIOR TO APRIL 19,2010("CHIQUITA SHAREHOLDER")

YOU ARE HEREBY NOTIFIED that pursuant to an Order of the United States District

Court for the Southern District of Florida, a hearing will be held on ,2010, at_:__.m.,

before the Honorable Kenneth A. Marra, United States District Judge, Paul G. Rogers Federal

Building and U.S. Courthouse, Courtroom 4,701 Clematis Street, West Palm Beach, Florida for the

purpose of determining whether the proposed settlement of the above captioned derivative action

(the "Derivative Litigation") should be approved as fair, reasonable and adequate and whether a

judgment dismissing the Derivative Litigation should be entered. In connection with the Settlement,

Chiquita will adopt a variety of Governance and Compliance Changes that relate to and address

many of the issues raised in the Derivative Litigation. The settlement also provides for the payment

of Plaintiffs' counsels' fees and expenses, subject to Court approvaI.

IF YOU WERE OR ARE AN OWNER OF CHIQUITA COMMON STOCK, YOUR

RIGHTS MAY BE AFFECTED BY PROCEEDINGS IN THIS CASE. A more detailed notice

describing the Settlement may already have been mailed to you. If you have not received the detailed

notice, you may obtain a copy of it by identifying yourself as a former or current owner of Chiquita

common stock and writing to:

Chiquita Derivative LitigationNotice Administratorc/o The Altman Group, Inc.1200 Wall Street West, 3rd FloorLyndhurst, NJ 07071

Alternatively, you can obtain a copy of the notice on the internet at

www.chiquitaderivativesettlement.com.

- 1 -

531132_2



Inquiries, other than requests for the detailed notice, may be made to a representative of

Plaintiffs' Counsel:

Rick NelsonShareholder RelationsROBBINS GELLER RUDMAN & DOWD LLP655 W. Broadway, Suite 1900San Diego, CA 921011 -800-449-4900

Any objection to the settlement must be filed with the Court no later than

2010 and received by the following no later than ,2010:



COHEN, PLACITELLA & ROTH, P.C.STEWARTL. COHENHARRY M. ROTHTwo Commerce Square, Suite 29002001 Market StreetPhiladelphia, PAl 9103





- 2 -531132_2


531132_2


COVINGTON & BURLING LLPJONATHAN M. SPERLING620 Eighth AvenueNew York, NY 10018



Attorneys for Cyrus F. Freidheim, Jr., Robert F. Kistinger, Warren J Ligan, Carl HLindner, Keith E. Lindner, Robert W. Olson, James B. Riley, Fred J Runk, William A.











- 3 -



RICHMAN GREERP.A.

ALAN G. GREER201 S. Biscayne BoulevardSuite 1000Miami, FL 33131


PLEASE DO NOT CONTACT THE COURT OR THE CLERK OF THE COURT

REGARDING THIS NOTICE

DATED: BY ORDER OF THE COURTUNITED STATES DISTRICT COURTSOUTHERN DISTRICT OF FLORIDA

- 4 -531132_2


Documents

UNITED STATES DISTRICT COURT ... - Sturm College of Law€¦ · C. Consideration of Final Approval Criteria Supports Preliminary Approval..... 1 0 D. Submission of the Settlement