PARIS -- A court hearing in the case of Jean-Louis Scherrer, the designer, v. Jean-Louis Scherrer SA, the company, over the couturier's abrupt 1992 firing was postponed last week, with both parties suggesting they are moving toward a settlement, apparently with the help of The Chambre Syndicale.

The Counseil de Prud'hommes, the French labor arbitration court, delayed the hearing until Sept. 15 in a closed-door session between the four judges and the attorneys for both parties.

"I am disappointed," Scherrer said after the postponement. "I have been waiting for this to be resolved for 13 months."

The two sides have previously resisted an out-of-court settlement, but attorneys for both parties confirmed Thursday that they are in negotiations.

Chambre Syndicale president Jacques Mouclier has been working with both parties recently to resolve the conflict, according to the designer, whose contract stipulated that the Chambre president act as mediator in disputes. Mouclier could not be reached for comment.

Jean-Louis Devolv, attorney for Jean-Louis Scherrer, said, "We are hoping that there will be a settlement."

The dispute dates back to December 1992, when the Scherrer firm stunned Paris with the announcement that it had fired Scherrer as designer. Erik Mortensen was named new couturier for the company.

Under French law, employers must specify why they are firing an employee. Scherrer was fired under the pretext of "faute lourde," meaning a serious transgression of duty. This clause is the most severe charge available and entitles an employer to take immediate action.

Scherrer is challenging that charge with this case, accusing Scherrer SA of having committed an "unlawful firing."

Scherrer's dismissal left him as a 10 percent owner of the firm he had founded, with the other 90 percent owned by Ilona Gestion, a holding company majority-controlled by Seibu-Saison with Hermes as the minority partner.

That structure has since changed. Hermes pulled out of Ilona, but now holds a direct 8.75 percent stake in Scherrer SA. Last year, Scherrer's 10 percent stake was diluted to practically nothing following a capital increase at Scherrer SA. The vast majority of the house is controlled by Ilona.The designer's attorneys said any settlement would involve payment of damages to Scherrer, although they declined to discuss specific amounts. They also said they are looking for a settlement that would end all litigation.

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