Danier Leather Inc. Comments on Court Decision on Costs.TORONTO Toronto (tərŏn`tō), city (1998 est pop. 2,400,000), provincial capital, S Ont., Canada, on Lake Ontario. Toronto is the largest city in Canada and since the 1970s has been one of the fastest-changing cities in North America, experiencing -- Danier Leather Inc. (TSX TSX Toronto Stock Exchange (TSE before April, 2002) TSX Transfer from Stack Pointer to Index TSX True Space Extension :DL.SV) announced today that the Superior Court of Justice (Ontario) has ruled in the matter of costs regarding the class action trial conducted in 2004. The class action concerned information contained in a financial forecast issued by the Company during its initial public offering ("IPO (Initial Public Offering) The first time a company offers shares of stock to the public. While not a computer term per se, many founders, employees and insiders of computer companies have found this acronym more exciting than any tech term they ever heard. ") in 1998. On May 7, 2004 the trial Judge concluded that two senior officers of the Company had an honest belief at the time the IPO closed that the forecast prepared during the process could be achieved. The Judge further held that the forecast was, in fact, substantially achieved. However, the Court found that a proper review had not been done on the date of closing and had it been done the Company should have concluded that the forecasted results were not achievable, even though the forecast was in fact substantially achieved. The Judge held in favour of the plaintiffs and awarded damages to all Canadian Canadian (kənā`dēən), river, 906 mi (1,458 km) long, rising in NE New Mexico. and flowing E across N Texas and central Oklahoma into the Arkansas River in E Oklahoma. shareholders who had purchased shares in the IPO. The trial Judge did not deal with the awarding of costs at that time. A hearing in that regard was held in April 2005. In its decision, the Court awarded a portion of the costs claimed by the plaintiffs but referred the matter for assessment to determine the amount of costs to be paid. The quantum of the costs award will not be known until the final assessment ordered by the Court has been conducted. Based on the information as of this date, the Company estimates that this award, if unchanged on appeal, would cost approximately $3 million to $4 million. The Company's appeal from the trial decision is currently scheduled to be heard in June 2005. The Company also plans to appeal certain aspects of the costs award. It is anticipated that both appeals will be heard at the same time. The original decision and the costs award are stayed pending the appeal. The judgment in the class action and the award of costs are joint and several responsibilities of the Company and of the two officers in question. The Company carries directors and officers insurance and expects that such insurance will cover the two officers' portion of the total award. The amount of the insurance is not readily determinable Liable to come to an end upon the happening of a certain contingency. Susceptible of being determined, found out, definitely decided upon, or settled. determinable adj. at this time and its recovery, therefore, has not been accrued ac·crue v. ac·crued, ac·cru·ing, ac·crues v.intr. 1. To come to one as a gain, addition, or increment: interest accruing in my savings account. 2. . The Company anticipates having sufficient financial resources to pay any anticipated award, interest, and costs associated with these matters. Based solely on the information then available, the Company established a provision of $15 million in this regard during the fourth quarter of 2004. A review of this provision will be made in the fourth quarter of 2005 based upon this new information. Danier continues to maintain a strong financial position with working capital of $44.8 million and no long-term debt Long-Term Debt Loans and financial obligations lasting over one year. Notes: For example debts obligations such as bonds and notes which have maturities greater than one year would be considered long-term debt. as at the end of its most recent quarter. About Danier Danier Leather Inc. is a leading integrated designer, manufacturer, and retailer of high-quality leather and suede clothing Noun 1. suede cloth - a fabric made to resemble suede leather suede cloth, fabric, textile, material - artifact made by weaving or felting or knitting or crocheting natural or synthetic fibers; "the fabric in the curtains was light and semitransparent"; and accessories. The Company's merchandise is marketed exclusively under the well-known Danier brand name and is available only at its 96 shopping mall, street-front, and power centre stores, or through its corporate sales division and online through its website, www.danier.com. Note: This press release may contain forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. that involve risks, estimates, and uncertainties. Therefore, actual results may differ materially. Examples of such risks and uncertainties include those associated with product sales, demand for Danier's products, availability of raw materials, foreign sourcing and manufacturing, weather, estimates associated with the closure of the U.S. operation, estimates of damages, costs and interest associated with the class action lawsuit class action lawsuit A lawsuit in which one party or a limited number of parties sue on behalf of a larger group to which the parties belong. For example, investors may bring a class action lawsuit against a brokerage firm that has actively promoted a tax , continued growth of the leather apparel industry, and competition and other associated risks with Danier's business. For an expanded discussion of risks and uncertainties, please see the documents filed by Danier Leather Inc. with the Ontario Securities Commission The Ontario Securities Commission (OSC) is a regulatory agency which administers and enforces securities legislation in the Canadian province of Ontario. The OSC is an Ontario Crown corporation which reports to the Ontario legislature through the Minister of Finance. . Danier disclaims any responsibility to update or revise such forward-looking statements whether as a result of new information, future events or otherwise. Danier Leather Inc. (TSX:DL.SV) |
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