Mail-Well Settles Lawsuit with Employee, $5.3 million
Press release from the issuing company
ENGLEWOOD, Colo., Feb. 23 -- Mail-Well, Inc. announced today that it has settled litigation brought in California Superior Court, Los Angeles County by an ex-employee contesting the termination of his employment. On Friday, a jury returned a verdict in favor of the plaintiff in the amount of $5.3 million. Although the Company continues to vigorously deny the claims and believes the jury's award was inappropriate, in order to avoid the expense and risk of further litigation and appeals the parties have resolved their dispute and have agreed to dismiss the action.
As a result, Mail-Well will take a charge of $3.2 million in the fourth quarter of 2003, which reflects the costs of the litigation and settlement net of tax effects. For the quarter, Mail-Well will report net income of $2.5 million, or $.05 per share on a diluted basis, versus the previously reported $5.7 million, or $0.12 per share on a diluted basis, and $5.2 million, or $.11 per share on a diluted basis, versus the previously reported $8.4 million, or $0.17 per share on a diluted basis, for the year 2003.
"Everyone involved in this lawsuit was shocked by this verdict given the circumstances surrounding the plaintiff's termination," stated Paul Reilly, CEO of Mail-Well. "We strongly believe local managements' actions were entirely appropriate in connection with the termination and treatment of the plaintiff. While we vigorously disagree with the verdict, management and our Board of Directors felt it was in the best interest of our shareholders and employees to settle the lawsuit to avoid exposure to potential additional inappropriate jury awards and to avoid further costs in defending this action."
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