L.A. Gear Announces Lawsuit Settlements
Dec. 30, 1992
LOS ANGELES (AP) _ L.A. Gear announced a $29.8 million settlement of three class action lawsuits by shareholders who claimed the sneaker maker violated securities laws.
More than 24 plaintiffs in three nearly identical suits will be paid the money pending court approval, L.A. Gear spokeswoman Sandra Sternberg said Tuesday.
L.A. Gear will pay $500,000; former officers of the company named as defendants will pay $29.3 million, and former company executives will pay L.A. Gear $3.2 million, she said.
The company's $500,000 payment is in addition to cash and stock paid in a separate settlement reached with shareholders in July.
The shareholders filed their lawsuits in June 1990 after L.A. Gear's stock plummeted more than $18 a share in three days. Shareholders claimed the company and its executives concealed information that would have affected the stock price and took the opportunity to sell their shares.
The suits also claimed L.A. Gear failed to reveal a criminal investigation into allegations it undervalued goods imported from Taiwan and South Korea to avoid import duties.
Sternberg said the defendants acknowledged no wrongdoing.