Chipotle settles consumer food safety claims

Chipotle Mexican Grill confirmed Friday that it has financially settled with more than 100 customers who were sickened after eating its food, continuing its efforts to get past the food safety issues that have hampered business and operations in recent months.

"We are a company that does the right things for our customers and we simply believed settling these claims was the right thing to do," said company spokesman Chris Arnold in an e-mailed statement.

Terms of the settlements weren’t revealed. Reuters first reported about the settlements Thursday, citing Bill Marler, a lawyer for Marler Clark who's representing clients affected by the incident. Marler couldn't immediately be reached for comment.

Chipotle shares fell 0.7% in morning trading Friday to $433.41.

Chipotle was forced to shut down some restaurants last year after an E. coli outbreak sickened more than 50 people in 11 states. A second outbreak of a different strain of E. coli in December affected five people in three states. Health officials also linked a Chipotle location in the Boston area in December to a norovirus outbreak in the region.

The outbreaks drove the company to implement new safety standards and food-handling procedures. In February, the Centers for Disease Control and Preventionended its investigation into the E. coli incidents at Chipotle, saying the outbreaks appear to be over.

But Chipotle could be facing other changes in its corporate suites. Earlier this week, Pershing Square Capital Management, the investment firm run by activist investor William Ackman, bought a 9.9% stake in the company, prompting speculation that he will agitate Chipotle's management to adopt new strategies to boost its stock price.

In its filing with the Securities and Exchange Commission, Ackman said he believes Chipotle "has a strong brand, differentiated offering, enormous growth opportunity, and visionary leadership" and the stock is "undervalued."

Ackman and his firm plan to "engage in discussions with (Chipotle's) management and board of directors, other stockholders" regarding "the governance and board composition, business, operations, cost structure, management, assets, capitalization, financial condition, strategic plans, and the future" of Chipotle, the filing read.


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