NEWARK, N.J. — A judge in a shareholder class-action suit against A&P this week dismissed claims against several defendants including the chain’s current owner, Yucaipa Cos., and Sam Martin, A&P’s current chief executive officer.
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U.S. District Court Judge William J. Martini, however, denied a motion to dismiss claims against former A&P executives Christian Haub, Eric Claus, Brenda Galgano and Frederic J. Brace, saying allegations that they made misleading statements about the severity of the chain’s financial troubles prior to its 2010 bankruptcy were plausible.
At issue in the case was the timing of a goodwill impairment charge at Pathmark. Plaintiffs allege former CEOs Claus and Haub, as well as Galgano, A&P’s former chief financial officer, purposefully waited to write down the value of Pathmark until after it was able to secure a round of financing in 2009. Brace, the former chief administrative officer, may be liable for failing to disclose to shareholders that A&P had stopped making rent payments on dark stores during 2010, Martini added.
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Charges were dismissed against Yucaipa Cos., an investor that now controls the company, and Yucaipa’s founder Ron Burkle, a former chairman of A&P. Charges were also dismissed against Martin and Ron Marshall, who briefly served as A&P’s CEO in 2009.
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