NEW YORK — Just when former Warnaco Group’s chief executive officer Linda Wachner thought she was off the hook in a shareholder class-action lawsuit, she might be hurled back into court again.
On Monday, a federal appeals court in Manhattan reversed a trial court’s dismissal of the lawsuit. The lower court dismissed the action last year on grounds that the shareholders waited too long to sue when they were alerted to possible inventory and accounting issues much earlier from the public firm’s regulatory filings. One filing in question was the 1998 revised annual report that Warnaco filed in April 1999. The shareholders filed their lawsuit in August 2000.
The appellate court found those filings did not place any notice on shareholders to inquire further about the possibility of alleged fraud. It noted that it was “reasonable for plaintiffs not to inquire into Warnaco’s statements because Warnaco had provided the seemingly benign explanation that it had changed accounting methods and revised its financial information for fiscal 1996 and 1997.”
Wachner will await the court’s review to determine if she must defend herself from the shareholders’ claims of securities law violations.
A legal source connected with the case said the lower court will have to redecide the timeliness issue. Also likely to be on the agenda, assuming that the procedural issue of timeliness is ruled in the shareholders’ favor, are legal issues raised by the defendants, such as whether the claims stated sufficient facts that would allow it to continue to trial.
Also named as defendants are Warnaco’s general counsel Stanley Silverstein and former chief financial officer William Finkelstein. The newly restructured Warnaco Group — formed when the operations part of the bankrupt firm exited Chapter 11 earlier this year — is not a party to the lawsuit.
Silverstein and Finkelstein could not be reached for comment. A Warnaco spokesman declined comment on behalf of its general counsel. A spokeswoman for Wachner said, “This is a groundless suit that she intends to contest vigorously.”
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)
@heriethpaul and @gracebol have a moment on the @victoriassecret fashion show 2017. See every look from the runway on WWD.com. Link in bio. (📷: @giovanni_giannoni_photo) #wwdfashion #victoriassecret #VSFashionShow
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia