Compass Group has settled legal rows involving UN contracts for just under
The problems related to alleged malpractice involving Eurest Support Services
(a subsidiary) in bidding for contracts, a matter that had been investigated by
Ernst & Young and law firm Freshfields.
The group said today it has paid out nearly £40m to avoid a court wrangle
that could have seen the FTSE 100 catering giant liable for £600m of costs.
In March 2006, two competing food companies, ES-KO International Inc and
Supreme Foodservice AG, brought US law suits totalling some £600m against ESS,
Compass and various ESS staff, based on allegations relating to ESS’s United
Compass said in a statement: ‘Compass has agreed to a final settlement of all
claims against all Compass-related parties. The terms of the settlement are
confidential but the total legal, professional and related costs associated with
investigation, litigation and settlement are below £40m. No legal liability has
Compass underwent a three-month review, carried out by Ernst & Young and
law firm Freshfields after the UN suspended it as a contractor as part of a
wider probe into alleged malpractice in bidding for its contracts.
Compass shares dropped by 1.25p to 275.5p, leaving the company’s value at
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