The former vice chairman and chief counsel of Rite Aid Corp., who spent time in federal prison for fraud, is off the hook in a $135.6 million suit brought against him by the pharmacy chain because of a release in a shareholder class action settlement agreement.
U.S. District Judge Stewart Dalzell of the Eastern District of Pennsylvania held in In re Rite Aid Securities Litigation that Rite Aid’s state court action against former executive Franklin C. Brown for breach of fiduciary duty, fraud and related claims can’t proceed because his criminal activity was linked to conduct for which he was released from liability in the class action.
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