CoreCivic (CXW) Announces Agreement In Principle to Settle Shareholder Litigation
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CoreCivic, Inc. (NYSE: CXW) (“CoreCivic”) announced today that it has reached an agreement in principle to settle a purported securities class action lawsuit filed on August 23, 2016, against CoreCivic and certain of its current and former officers in the United States District Court for the Middle District of Tennessee, captioned Grae v. Corrections Corporation of America et al.. The lawsuit was filed after the company’s stock price declined following issuance of an August 18, 2016 memorandum from the Department of Justice instructing the Federal Bureau of Prisons (“BOP”) to reduce and ultimately end the use of privately operated prisons.
"We are pleased to resolve this matter and put it behind us in order to focus on the Company’s business," said Damon Hininger, CoreCivic's President and Chief Executive Officer. "While we continue to believe the allegations in this case were without merit, we also believe that eliminating the risk, cost and distraction related to the litigation is in the best interest of CoreCivic and its shareholders.”
The monetary terms of the settlement of the Grae case include a payment by CoreCivic of $56 million in return for a dismissal of the Grae case with prejudice and a full release of all claims against all defendants, including CoreCivic and its current and former officers. The proposed settlement contains no admission of liability, wrongdoing, or responsibility by any of the defendants, including CoreCivic, and is subject to the negotiation and execution of a definitive settlement agreement among the parties, and court approval of such definitive settlement agreement. A jury trial for the case was previously scheduled to begin May 10, 2021.
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