ADAC Laboratories of Milpitas, CA, took a step toward putting the past behind it when it announced today an agreement to settle a class-action lawsuit related to the company’s restatement of financial results for three recent years.
ADAC said the plaintiffs in the case will receive $20 million for full settlement of their claims, pending approval of the settlement by the federal court overseeing the litigation. The company also announced that it has reached an agreement to settle derivative litigation filed against current and former officers of the company. ADAC said the settlement would result in a one-time pre-tax charge of $10 million to $11 million, to be taken in the company’s first fiscal quarter (end-January 2).
The litigation represents the consolidation of a series of lawsuits filed in early 1999, when the company announced that it would restate financial results for 1996, 1997 and the first three quarters of 1999. The restatement was due to the company’s revenue recognition practices, which have since been changed. ADAC is also the subject of a Securities and Exchange Commission investigation related to the restatement.
By AuntMinnie.com staff writers
January 13, 2000
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