Business
Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures
Under Armour announced on Friday that it has agreed to pay $434 million to settle a 2017 class action lawsuit. The lawsuit alleges that the sports clothing company deceived shareholders about its revenue growth to meet Wall Street expectations.
The proposed settlement, subject to court approval, avoids a trial scheduled for July 15 in Baltimore federal court.
Under Armour | Under Armour Image
Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures
The shareholder lawsuit accused apparel firm CEO Kevin Plank of purposefully deceiving them about the company’s financial condition.
In 2021, the Baltimore-based corporation agreed to pay $9 million to settle Securities and Exchange Commission (SEC) claims of misleading investors about its revenue growth.
The SEC’s inquiry discovered that Under Armour failed to disclose to investors that it used a sales strategy to accelerate or “pull forward” a total of $408 million in existing orders in the second half of 2015.
Under Armour | CNN Image
Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures
Mark Solomon, lead counsel for the shareholders and a partner at litigation firm Robbins Geller Rudman & Dowd, described the proposed settlement as an “important win,” highlighting pension funds’ critical role in keeping firms accountable.
Under Armour stated that it aims to pay the $434 million settlement with cash and rely on its $1.1 billion revolving credit facility.
Under Armour | Under Armour
Under Armour To Pay $434 Million To Settle Lawsuit Over Sales Disclosures
Under Armour stated that the company has repeatedly refuted the charges and engaged in this agreement in principle, which does not constitute an acknowledgment of fault or misconduct.
The business expects its total accrual in legal proceeding contingencies linked to the case to be $434 million in the first quarter of 2025, up from $100 million at the end of fiscal year 2024.
SOURCE – (CNN)
