USA: St John Reports Settlement Of Shareholder Lawsuit
St John Knits International Inc ("St. John") (OTC: SJKI) Monday announced that it has reached an agreement to settle a class action shareholders' lawsuit arising from the $500 million management-led buyout last July. Plaintiffs' counsel had alleged in a class action suit that the $30 per share received by the shareholders in that transaction was inadequate. The company disagrees with this contention and believes that at trial its position would have been vindicated. However, in the interest of eliminating the ongoing drain on management time and corporate resources, the company has concluded that the settlement, as structured, is the most prudent course of action. The terms of the settlement agreement, which is subject to court approval, calls for payment of $13.75 million to St John's former public shareholders and their attorneys. Nearly all of this payment will be funded by St. John's insurance carriers. Additionally, in the event of a sale, merger or public offering of the company, St. John has agreed to provide the class of former shareholders with the opportunity to receive a specified percentage of the proceeds from any such transaction under certain circumstances. St John is a leading designer, manufacturer and retailer of high-end women's clothing. The company also sells accessories, shoes, coats and fragrances. The products, mostly made in the United States by St John itself, are sold in the company's own boutiques and specialty stores such as Saks Fifth Avenue, Neiman Marcus and Nordstrom.
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