Under Armour, a renowned American sportswear company, has recently settled a significant securities class action litigation. This article provides a comprehensive overview of the Under Armour Class Action Settlement, detailing the settlement amount, payment dates, and eligibility criteria.
Background
Under Armour faced a lawsuit accusing it of misleading investors about its financial health. To avoid prolonged litigation and additional costs, the company opted to settle the case. This move aligns with Under Armour’s focus on future business strategies and corporate governance reforms.
Settlement Amount
In 2017, the lawsuit alleged that Under Armour misrepresented its financial disclosures, violating US securities laws. The settlement concluded with an agreement to pay $434 million. This amount will be sourced from the company’s cash reserves and, if necessary, a $1.1 billion revolving credit facility.
Financial Breakdown
| Financial Aspect | Amount |
|---|---|
| Cash available | $859 million |
| Settlement Amount | $434 million |
| Projected remaining cash after settlement | $500 million |
| Revolving Credit Facility Limit | $1,100 million |
The settlement aims to resolve claims against Under Armour and other defendants, pending court approval.
Payment Dates
Key payment dates for the settlement are as follows:
- Settlement Amount: $434 million to be distributed to claimants who traded shares between September 16, 2015, and November 1, 2019.
- Financial Status: As of March 31, 2024, Under Armour reported $859 million in cash and equivalents.
- Future Projections: The company anticipates ending fiscal 2025 with approximately $500 million in cash or equivalents.
The settlement funding will utilize existing cash reserves, with the revolving credit facility as a backup.
Eligibility
Eligibility for filing a lawsuit under Section 245, which addresses mismanagement, includes:
- Companies with Limited Shares: At least 100 members and 100 depositors.
- Companies without Share Capital: One-fifth of the total members and 100 depositors.
Applicants must have paid all dues on their shares. It’s advisable to check the original lawsuit website or consult a legal professional for specific eligibility details.
Governance Reforms
As part of the settlement, Under Armour has committed to enhancing its corporate governance. This includes separating the roles of Chief Executive Officer and Chairperson for a minimum of three years, promoting leadership independence.
Current Status
Despite multiple denials, Under Armour eventually agreed to the settlement. The court has scheduled a trial for July 2024, considering the persistent demands of the plaintiffs and the mounting evidence.
If the court approves the settlement, the case will conclude, allowing Under Armour to focus on mitigating risks and stabilizing stakeholder interests. The company is also dedicated to implementing government reforms and developing strategies to foster growth.
Stay updated on the latest lawsuit developments by visiting the official web portal and checking this webpage frequently for new articles.
The settlement decision reflects Under Armour’s strategy to ensure stability and progress amid legal challenges. The company aims to move forward with a strengthened governance structure and a clear path toward future growth.
FAQs
What is the Under Armour settlement amount?
The settlement amount is $434 million.
When will the settlement payments be made?
Payments will be distributed to eligible claimants after court approval.
Who is eligible for the settlement?
Investors who traded Under Armour shares between September 16, 2015, and November 1, 2019.
How will the settlement be funded?
Primarily from cash reserves, with a revolving credit facility as a backup.
What governance reforms are included in the settlement?
Separating the roles of CEO and Chairperson for at least three years.
