Monster Beverage Agrees To Settle Class-action Lawsuit

(RTTNews) - Energy drink maker Monster Beverage Corp. (MNST) said Monday that it has agreed to settle a long-standing securities class action lawsuit that was filed against the company and two of its officers in federal district court in Los Angeles.

The settlement agreement, entered into by the company on April 16, requires court approval. Financial terms of the settlement agreement were not disclosed, but media reports indicated the settlement payment was more than $16 million.

However, Monster Beverage noted that the full settlement payment was being funded by its insurance carriers, and the settlement would not have any impact on the company's financial position or its income statement.

Corona, California-based Monster Beverage, known as Hansen Natural Corp. when the lawsuit was filed, noted that it has spent more than five years aggressively defending against the allegations set forth in the lawsuit - Cunha v. Hansen Natural Corp. - originally filed in 2008.

However, the company has now entered into a settlement agreement, citing the potential costs of continued litigation as well as the potential burden and disruption to the company and its management.

Rodney Sacks, CEO of Monster Beverage said, "We are fully confident that we would have prevailed if the litigation had proceeded. Nevertheless, given the terms of the settlement, the payment of which is being funded by insurance carriers entirely, we believe it is in the Company's interests to put this matter behind us."

Monster Beverage added that the settlement does not contain admission of any liability or wrongdoing on the part of the company or its officers, and that all of the defendants continue to deny all of the allegations against them and to maintain that the suit has no merit.

Monster Beverage noted that contrary to allegations in the lawsuit, its relationship with Anheuser-Busch InBev (BUD, AHBIF.PK) was extremely successful during the proposed class period and thereafter. The company said that after that relationship began in 2006, it achieved record sales in each quarter during the proposed class period, and significantly improved its product line's market share.

MNST is currently trading at $66.44, down $1.11 or 1.64 percent on a volume of 98,301 shares.