Davis biotech firm to pay $12 million to settle shareholder suits
Announced Thursday, the settlement will resolve a group of class-action lawsuits filed by shareholders shortly after the accounting scandal -- which revolves around allegations that sales figures were inflated -- erupted in
Nevertheless, the company's financial problems persist. In a filing in
The company made its own acknowledgment, in regulatory filings earlier this spring, of "substantial doubt" about its future. The doubt stems from the company's cash reserves, which might fall below the minimums required under agreements with its lenders.
Nevertheless, founder and Chief Executive
"We have a plan in place that we're executing," she said in an interview.
Asked about McGaughey's prediction of a cash shortage, she said, "That's their interpretation." The company's latest regulatory filing listed
Settling the shareholder suit represents a milestone, although individual plaintiffs could challenge the terms and court approval is needed to finalize the deal. Once the case is over, Marrone Bio will have resolved most of its regulatory and legal problems stemming from the accounting issue.
The company is still wrestling with the possible loss of its Nasdaq stock market listing because its share price has fallen below the
Marrone Bio shares closed Thursday at
A maker of environmentally sensitive pesticides and other farm-related products, Marrone Bio was founded in 2006. Burdened by huge product-development costs, it has yet to turn a profit. But it was considered a promising company until it disclosed in
The company eventually restated its earnings reports, erasing more than
Prosecutors said Absi, who left the company in
Absi, who moved to
The company paid a
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