According to a report by Law360, a U.S. federal judge has denied preliminary approval of a $117 million settlement proposal between Altria Group and its shareholders regarding the company's investment in Juul Labs, stating that the proposed deal is "inadequate".
Photo: steheap. The lawsuit argues that in 2018, executives of Altria acted cautiously when they acquired a 35% stake in Juul for $12.8 billion.
According to shareholders, Altria executives are engaging in illegal and anti-competitive practices that have resulted in the loss of billions of dollars for the company. This is due to the increasing legal battles Juul is facing, as its products are suspected to pose a health risk and the company is alleged to have marketed to underage consumers. The plaintiffs argue that Altria was aware of this issue when investing, but chose to overlook it.
As Juul Labs faces increased litigation and regulatory scrutiny, the investment value of Altria has steadily declined.
The plaintiff argues for the approval of a settlement, stating that it is fair and reasonable to recover the cost and risk of further litigation. U.S. District Judge David J. Novak has not explained why he finds the settlement inadequate.
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