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Coke to Settle Former Exec's Suits

The company will pay $540,000 on claims that the finance director was fired because he exposed accounting fraud.

October 08, 2003|From Bloomberg News

Coca-Cola Co. agreed to pay $540,000 to settle two lawsuits by a former executive who claimed he was improperly fired because he exposed accounting fraud at the company.

Matthew Whitley, a former finance director in Atlanta-based Coca-Cola's fountain division, will be paid $100,000 in addition to $140,000 in severance pay. The company also will pay his attorney's fees of $300,000, Coca-Cola said.

Whitley's accusations have prompted investigations by the U.S. attorney's office and the Securities and Exchange Commission. Those investigations continue, and Whitley and the company, in statements released together, said they would cooperate with the probes. Whitley had sought $44 million from Coca-Cola before filing the suits in May.

"It has become increasingly clear to me that the company has taken seriously the issues I raised. That's all I ever wanted," Whitley said.

The settlement follows a decision in a Georgia court last month that threw out most of his claims against the company, including racketeering allegations.

An internal company probe found employees faked marketing tests at Burger King Corp. for a Frozen Coke drink. Coca-Cola agreed to pay Burger King, which was unaware of the deception until this year, as much as $21.1 million in compensation.

In a 123-page filing last month, Coca-Cola said Whitley's termination was justified as part of a reduction of 1,000 jobs in a cost-saving program.

In Coca-Cola's statement, Deval Patrick, executive vice president and general counsel, said that the company wanted every employee to bring issues to management and that "it is disappointing" Whitley "felt he needed to file a lawsuit in order to be heard."

The company said an internal investigation showed no improper accounting methods. The fountain division generates a third of the company's U.S. sales.

Shares of Coca-Cola rose 25 cents to $44.66 in New York Stock Exchange trading before the announcement.

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