By  on July 2, 2009

A federal judge on Wednesday dismissed a lawsuit accusing Gildan Activewear Inc. of misrepresenting earnings’ potential and two company executives of insider trading. U.S. District Court Judge Harold Baer Jr. in Manhattan said the suit did not adequately show the defendants’ intent to deceive, manipulate or defraud investors. The class-action suit combined complaints from groups of stockholders that filed against the Montreal-based vendor after it reduced fiscal 2008 guidance in April of that year, citing problems at a new factory in the Dominican Republic. Investors alleged the manufacturer spent the months before the revision touting the same facility’s promise for increased earnings. Gildan shares fell $10.99, or 30 percent of their value, after the difficulties were revealed. The investors also accused chief executive officer Glenn Chamandy and chief financial officer Laurence Sellyn of insider trading for realizing combined gross proceeds of $96 million on stock sales. In granting Gildan’s dismissal motion, Baer said the accusations did not meet established thresholds for such suits because they did not allege the sales were unusual. The plaintiffs did not have enough specific allegations that the executives had knowingly acted improperly. Because the stockholders failed to adequately make their case against Chamandy and Sellyn, Baer wrote that he did not need to address the allegations of misrepresentation. The judge noted the company’s statements were “simply vague expressions of optimism about the ability of the Dominican facility to ramp up production.”

A Brooklyn-based Web site and retailer has sued Luxottica Group SpA, alleging the eyewear firm stopped shipments because a Luxottica executive disapproved of its store’s location in a Hasidic Jewish neighborhood. Provision Supply LLC, which does business as EZ, filed the suit June 25 in U.S. District Court in Manhattan. In the complaint, the company said it had been a Luxottica dealer since late 2007 but the vendor ended the relationship earlier this year after an unnamed executive passed Provision’s brick-and-mortar store in the Borough Park section of Brooklyn. The suit alleges the executive later told others it was “not the kind of neighborhood” the company should be working in. A Luxottica spokesman rejected the accusations Tuesday and said the company has several other accounts operating in “that very same neighborhood....Neither Luxottica nor any of its affiliates discriminate against any retailer to which we sell our products based on religion or what neighborhood they are located in.” Provision is seeking $4 million in compensatory and punitive damages, legal fees and a declaration that it has the right to continue as a Luxottica distributor. The plaintiff’s Web site lists a number of brands in the Luxottica portfolio, including Burberry, Dolce & Gabbana, Donna Karan, Prada, Ralph Lauren, Ray-Ban and Versace.

Moissanite jewel manufacturer Charles & Colvard Ltd. said Tuesday it had settled a year-old breach of contract lawsuit with K&G Creations. The company did not release terms of the settlement but said they were “not material to the company’s financial position.” Charles & Colvard first brought a complaint against the jeweler and its parent company, Jewelnet Corp., in U.S. District Court in Raleigh, N.C., in June 2008. The suit alleged K&G owed the supplier $2.8 million plus interest for jewels it had ordered but not paid for. K&G hit back with its own counterclaim in July 2008. It alleged Charles & Colvard had interfered with its other business relationships and sought $40 million in damages. Charles & Colvard, the developer and supplier of the man-made jewel moissanite, said it entered the settlement to “avoid further litigation expenses and to dispose of the case.”

To Read the Full Article

Tap into our Global Network

Of Industry Leaders and Designers

load comments
blog comments powered by Disqus