Continental Materials Founders End Buyout Suit for $1.7 Million

Members of Continental Materials Corp.'s board and founding family will pay $1.7 million to resolve shareholder litigation in Delaware over claims that the founders “browbeat” independent directors into an underpriced take-private buyout, according to a court filing Wednesday.

The class action settlement, filed in Delaware Chancery Court, calls for the payment to be made by members of the board, longtime chairman-CEO James G. Gidwitz, his family and investment vehicle, or their insurers. The deal requires the approval of Vice Chancellor Paul A. Fioravanti Jr.

The Gidwitzes and CMC directors, who continue to deny wrongdoing, settled only to “eliminate the risks, ...