i2 Tech in accord over lawsuits
BS Bureau in Bangalore / May 12, 2004 09:06 IST
i2 Technologies, Inc, a leading provider of closed-loop supply chain management solutions, has announced that it has reached a definitive agreement to settle the consolidated shareholder class action and derivative lawsuits pending in the US district court for the northern district of Texas.
As per the agreement, the total settlement amount is $84.85 million, which includes $43 million that will be covered by i2 insurance policies and $41.85 million that will be paid by i2 during this quarter.
To help fund a portion of the $41.85 million payable by i2 in connection with the settlement, the company has entered into definitive agreements providing for the issuance and sale by i2 of $22 million common stock to certain individual defendants in the lawsuits.
As announced recently, Sanjiv Sidhu, i2's chairman and chief executive officer, has agreed to purchase $20 million of common stock from i2. The company established an accrual of $42 million relating to the possible settlement of the lawsuits in the fourth quarter of 2003.
According to him, "We are pleased with the announcement of today's settlement. As we put these issues behind us, we can focus more completely on maximising the many opportunities available to the company to grow the business and return to profitability."
However, the settlement does not reflect any admission of wrongdoing by i2 or its directors and officers.
It is subject to certain conditions including approval by the US district court for the northern district of Texas following notice to class members of an opportunity to object or exclude themselves from the settlement.
It may be noted that in late 2000, some cases were filed by shareholders who alleged that i2 had misled them on the earnings forecast.
As these cases were of the same nature, they were classified as one and valuation of this settlement amount has been mutually agreed by both i2 and the shareholders who filed the case.
Meanwhile, i2's Bangalore centre continues to play a prominent role in the company's overall operations. The company has said that India is well positioned to play a bigger role for its over 900 customers worldwide.
The centre is 1,100-strong and works on mainline product development.
The team at the India solution centre also plays a significant role in implementation process.
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