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Compass pays £40m to settle out of court

20 October 2006

Compass Group has agreed out-of-court settlements on two lawsuits relating to procurement irregularities at the UN.

In March this year, Monaco-based rival ES-KO and Swiss-based caterer Supreme Foodservice brought lawsuits in New York against Compass totalling £600m.

They alleged Compass division ESS obtained food supply contracts for UN peace-keepers in countries such as Sudan, Lebanon and Syria through rigged bids and fraud.

After a two-day mediation session in New York last week, Compass agreed to settle the two cases - for less than £40m - but admitted no legal liability.

Compass chief executive Richard Cousins said: "This settlement is a major step in putting the matter behind us. I am now seeing through a programme of systems and control changes to ensure that all lessons are learnt from this experience."

Seymour Pierce analyst Kevin Lapwood said the settlement averted the possibility of "horrendous legal costs further down the line" for Compass.

By Tom Bill

E-mail your comments to Tom Bill](mailto:tom.bill@rbi.co.uk?subject=Compass pays £40m to settle out of court) here.

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