The Wendy's Company (NASDAQ: WEN) today announced that it has entered into a Settlement Agreement that, if approved and finalized, would result in a class-wide settlement of the class action lawsuits brought by financial institutions against the Company related to the criminal cyberattacks which targeted the point of sale systems of certain Wendy's franchisees in 2015 and 2016. Approval of the Settlement Agreement would resolve the putative class action lawsuit brought by certain financial institutions in 2016 seeking, among other things, to certify a nationwide class of financial institutions alleging that the Company failed to safeguard customer payment card information and failed to provide notice that payment card information had been compromised.
Under the terms of the Settlement Agreement, the Company and its franchisees will receive a full release of all claims that have or could have been brought by the financial institutions, and the financial institutions will receive $50 million, inclusive of attorneys' fees and costs. After exhaustion of applicable insurance, the Company expects to pay approximately $27.5 million of this amount. The proposed Settlement Agreement is subject to Court approval and, if approved, the Company anticipates that payment will not occur until late 2019.
"We are encouraged by the progress made to resolve this case, and we believe this settlement is in the best interests of Wendy's and its shareholders," said Todd Penegor, President and Chief Executive Officer. "With this settlement, we have now reached agreements in principle to resolve all of the outstanding legal matters related to these criminal cyberattacks. We look forward to putting this behind us so that we can continue to focus on growing the Wendy's brand."
If preliminarily approved, notice of the proposed Settlement Agreement will be provided by a third-party settlement administrator. The notice will include further details of the Settlement Agreement and the claims and objection process and other pertinent information.
Logos, product and company names mentioned are the property of their respective owners.