Petsmart Inc., Phoenix, will pay $16.4 million to settle a lawsuit with former shareholders of Pet City Holdings. Petsmart acquired Pet City, a UK-based pet supply retail chain, in December 1996.
The suit alleged that Petsmart misled Pet City shareholders regarding Petsmart’s business, finances and prospects, according to documents Petsmart filed with the Securities and Exchange Commission. The shareholders asked for $100 million.
The suit had been filed in the United States District Court for the Central District of California in January 2001.
"The settlement provided us with the best opportunity to end the uncertainty and protect our business and shareholders from the vagaries of the litigation process," Petsmart chairman and CEO Philip L. Francis said in a statement."
