Cutter & Buck Settles Shareholder Suit
Jun. 16, 2003
SEATTLE (AP) _ Cutter & Buck Inc. will pay up to $7 million to settle shareholder lawsuits stemming from its restatement of financial results for fiscal 2000 and 2001, the sportswear manufacturer announced Monday.
Cutter & Buck also has revised its governance policies and practices, including adoption of periodic reviews for compliance with shipping procedures and meetings with employees to discuss ethical expectations, according to a news release.
The settlement is subject to court approval and does not indicate an admission of liability, chief executive Fran Conley said.
It covers both a consolidated securities class-action lawsuit in U.S. District Court in which the lead plaintiff is Growth Fund and a lawsuit filed in state court by a shareholder.
The lawsuits followed an announcement in October that because of improper accounting, the company was lowering its profits for fiscal 2001 by $2.4 million and for 2001 by $1.8 million. The total was less than 1 percent of the company's profits for those two years.
In 2000, the company reported, $5.8 million worth of products had been booked as revenue but were later returned unsold from distributors.
In December the company announced that it was closing all 14 of its retail stores to concentrate on clothing design and sales to specialty stores, golf pro shops and corporate and international customers.
Under the settlement, Cutter & Buck will pay $4 million in cash, plus as much as $3 million under a formula covering any recovery of funds from a lawsuit against Genesis Insurance Co., which is trying to cancel the company's directors and officers liability coverage.
``This settlement puts all the shareholder litigation behind us,'' Conley said. ``By resolving these legacy issues, we can eliminate distraction and uncertainty and continue to rebuild shareholder confidence in Cutter & Buck.''
In afternoon trading on the Nasdaq Stock Market, Cutter & Buck shares rose 19 cents to $4.35.