Chanticleer Holdings' settlement with investors in federal court's hands

An $850,000 class-action settlement agreement involving Chanticleer Holdings and investors who claimed the company misled them has been filed in federal court, according to documents released Friday. 

The Charlotte-based investment company, which owns and operates restaurants, including Hooters, said a motion seeking preliminary approval for the cash settlement was filed Monday in U.S. district court in south Florida.

The accord would resolve claims stemming from an investor lawsuit filed over a June 2012 offering of 2.4 million Chanticleer shares. The suit says Chanticleer misled investors in offering documents for the securities by claiming that financial statements for its South African Hooters operations had been audited.

Three months later, in September 2012, Chanticleer informed the U.S. Securities and Exchange Commission that financial statements for the South African operations had not been audited. Nasdaq then halted trading of the Chanticleer's stock, “rendering it nearly worthless,” the lawsuit says.

Settlement negotiations began in December, according to securities filings. Under the settlement's terms, Chanticleer’s insurer, XL Specialty Insurance Co., will pay $837,500. Chanticleer's accounting firm, Creason & Associates, which audited financial statements used in the 2012 stock offering, will pay $12,500.

“We are pleased with this agreement, which will put this matter behind us, so that we may focus our attention on growth,” Mike Pruitt, CEO of Chanticleer Holdings, said in a statement.