Playboy Enterprises Settling Investor Suit for $5 Million

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from www.businessweek.com – Playboy Enterprises Inc. agreed to pay $5.25 million to settle a lawsuit over claims its founder, Hugh M. Hefner, shortchanged investors in a going-private buyout in March.

Stockholders sued beginning in 2010 over the offer, which started at $5.50 a share and increased to $6.15 a share the following year. The parties agreed to the settlement partly to avoid continued litigation, according to Delaware Chancery Court papers made public today in Wilmington. Playboy, based in Chicago, denied any wrongdoing.

“Plaintiffs’ counsel have concluded that the settlement is fair and adequate and that it is reasonable,” the parties wrote in their memorandum. The agreement requires a judge’s approval.

Playboy expanded globally in the 1960s and 1970s when Hefner, now 86, ran the company. The company went public in 1971 and circulation reached 7.2 million for one issue in 1972. Hefner is the company’s chief creative officer.

Teri Thomerson, a spokeswoman for Playboy, and plaintiffs’ lawyer Carmella Keener didn’t immediately respond to e-mail messages seeking comment on the settlement.

The case is In Re Playboy Enterprises Inc. Shareholders Litigation, CA5632-VCN, Delaware Chancery Court (Wilmington).

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