WOLVERINE SETTLES TEXAS CATTLE HIDE LAWSUITS;
ANNOUNCES PRELIMINARY 1991 RESULTS
ROCKFORD, Mich., March 2 /PRNewswire/ -- Wolverine World Wide, Inc. (NYSE: WWW) today announced it had reached a settlement with Southwest Hide Co. and First Security Bank of Utah, N.A., plaintiffs in civil suits related to Wolverine's former pigskin procurement partnership in Texas. The settlement will result in a $7.5 million pre-tax charge against operations for the fourth quarter ended Dec. 28, 1991.
As part of the settlement, the District Court for the Northern District of Texas entered orders setting aside the jury verdict rendered Jan. 30, 1992, in the Southwest Hide Co. case and dismissing that case as well as a related lawsuit brought by First Security Bank of Utah. Southwest Hide was seeking a judgment on the jury verdict of $12.2 million, after trebling, plus attorneys' fees. In a separate lawsuit, First Security was seeking trebled damages of approximately $27 million, plus attorney's fees.
Concurrently, Thomas D. Gleason, Wolverine chairman and chief executive officer, reported preliminary unaudited net earnings for the year ended Dec. 28, 1991, including the non-recurring expense relating to the settlements, of $3,250,000 or $.50 per share. "Without the non-recurring expense relating to the settlements, net earnings would have been $9,340,000 or $1.43 per share. Net earnings for the fourth quarter were $960,000 or $.15 per share, and without the settlement expense would have been $7,050,000 or $1.08 per share. Final results for the fourth quarter and year ended Dec. 28, 1991, will be reported following the board of directors audit committee meeting on March 5, 1992," he said.
"This settlement in no way mitigates our conviction that all of the allegations against Wolverine were totally unfounded and that our conduct in this matter was entirely lawful and consistent with the highest business ethics," said Gleason. "Wolverine's conduct was blameless, but unfortunately we were the only financially responsible party -- the "deep pockets" -- in a maze of business enterprises and allegations of fraud. We decided to put these allegations behind us rather than continuing with three to five years of litigation with its attendant legal costs and diversion of management attention. The company's management and board of directors are convinced this decision is in the best interest of our shareholders, customers and employees."
Under the settlement, the company will pay $6 million in cash and $2.5 million of convertible subordinated notes, due March 1, 1996, convertible at $12.50 per share.
Representatives of both Southwest Hide Co. and First Security Bank acknowledged that the allegations in their complaints focused on the activities of the company's former partner in a pigskin procurement operation in Texas and not on Wolverine itself. John Rueb, Southwest's managing partner, said that "Southwest Hide is glad to put this matter behind us, and we wish Wolverine World Wide well in the future."
Wolverine World Wide, Inc. manufactures and markets a wide variety of branded footwear and pigskin leathers, including Hush Puppies shoes, Wolverine work and sport footwear, Brooks athletic footwear, apparel and accessories, Wolverine Wilderness footwear and apparel, Coleman footgear, Town & Country shoes, Tru-Stitch slippers, Bates Floaters, Sioux-Mox moccasins, Wimzees casual footwear, Kroupana sueded pigskin and Breathin' Brushed Pigskin leathers.
/CONTACT: Jim Lovejoy of Wolverine World Wide, 616-866-5539, or fax, 616-866-0257/
(WWW) CO: Wolverine World Wide, Inc.; Southwest Hide Co.; First Security
Bank of Utah, N.A. ST: Michigan IN: TEX SU: ERP SM -- NY074 -- 4104 03/02/92 15:40 EST