Drugstore chain CVS Corp. has agreed to a $110 million settlement of a shareholders' lawsuit that accused the company of making misleading statements and violating accounting practices.
CVS filed the proposed settlement Monday in U.S. District Court in Boston, The Boston Globe reported in Tuesday editions.
The settlement would be the third-largest payout of a securities action in federal court in Boston, according to the agreement.
A federal judge will decide Wednesday whether to give preliminary approval to the settlement.
"We believe this is a significant recovery for class members and have asked the court to grant preliminary approval of the settlement," said Deborah Weintraub, lawyer for the lead plaintiff, the Plumbers & Pipefitters National Pension Fund.
The lawsuit, filed in federal court in 2001, was set to go to trial in federal court in Boston last month.
The suit alleged that CVS made false statements to artificially raise its stock prices. It accused the company of delaying accounting on merchandise discounts, counting the items' full value in its earning reports to help boost earnings.
In addition, the lawsuit says CVS Chief Executive Thomas Ryan delayed reporting the company's plans to close 200 underperforming stores.
CVS released a statement Monday evening saying the company "continues to deny liability and entered into the settlement agreement solely to avoid the risk and diversion of resources associated with trial," the Globe said.
A hearing to determine whether the agreement is fair and adequate will be held if the federal judge gives preliminary approval to the proposed settlement. Final approval will then be issued.
A CVS spokeswoman did not immediately return a call for comment Tuesday morning.
