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Florida East Coast settles class action suit tied to Fortress deal


Florida East Coast Industries Inc. (FECI) recently reached a settlement with disgruntled shareholders who filed a class action lawsuit against the company over the terms and disclosures of an acquisition agreement with Fortress Investment Group L.L.C.

If a Florida circuit court approves the settlement, the class action will be dismissed.

FECI — which owns Florida East Coast Railway L.L.C. and Flagler Development — agreed to provide shareholders certain additional information in connection with the proposed acquisition and pay all legal fees associated with the class action. In return, the plaintiffs agreed to the drop the suit.

The settlement won’t affect the acquisition transaction’s closing, which is expected to conclude in the third quarter, FECI said.

In May, FECI entered into a merger agreement with private equity funds managed by Fortress affiliates under which Fortress Investment Group will acquire FECI through a transaction valued at about $3.5 billion. FECI will pay shareholders a special dividend of $21.50 per share. In addition, stockholders will receive $62.50 in cash for each share of FECI common stock.

Contact Progressive Railroading editorial staff.

More News from 7/13/2007