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SPARTANBURG, S.C.--Agreeing to pay about $54 million to resolve two major class-action lawsuits, Denny's is hoping to put nagging race-bias problems behind it and rebuild an image that has been tattered by widespread media coverage of the cases.
The settlement by the 1,500-unit family restaurant chain effectively retires class-action litigation in San Jose, Calif., and Baltimore, which together encompassed a total of 4,300 claims of racial discrimination lodged against the nationwide family concept.
"I feel that this is the best decision for Denny's and for Flagstar," said Jerome J. Richardson, chairman and chief executive of Flagstar Cos. Inc., Denny's parent. "It was not fair for our employees to continue dealing with this on a daily basis and to see it on the nightly news.
"It closes a painful chapter in our history. When we weighed the cost of litigating the claims, it was unacceptably high and it would create an adverse relationship between Denny's and the African-American community. Now we can truly get on to doing business."
Over the pase two years, Denny's had come under siege from African-Americans and various civil-rights organizations, which accused the chain of refusing service to black customers and promoting a corporate culture of racial discrimination.
Four additional racial-bias suits still remain against Denny's--two in California and others in Florida and Maryland--encompassing a total of 12 plaintiffs. However, Flagstar did not indicate when those cases would be settled.
According to the terms of the settlement, the California and Maryland plaintiffs will receive a total of $46 million, with $28 million of that figure being channeled toward settlement of the California...