Gildan Activewear Agrees to Settlement In Shareholder Class Action
November 2010 - All persons who purchased or otherwise acquired common shares of Gildan Activewear Inc. ("Gildan") during the period from August 2, 2007 to and including April 29, 2008, inclusive (the "class period"), other than excluded persons (the "class" or the "class members"); your rights will be affected by a proposed settlement of these lawsuits and you may be entitled to share in the settlement.
The parties (Gildan, certain of its officers and Glenn Chamandy Holdings Corporation) in the actions have reached a proposed settlement of all claims in the amount of USD $22.5 million funded by Gildan's insurers (the "Settlement Amount"), subject to obtaining approval of the Courts. More information is available in the Settlement Agreement and in the Notice of Proposed Settlement and Settlement Approval Hearings. The U.S. Court will hold a fairness hearing on March 2, 2011 for the Southern District of New York in New York, New York. In the hearing, the Court will consider whether to approve the Settlement Agreement as fair, reasonable, adequate and in the best interests of Class Members.
Gildan Activewear Inc. 06/02/2008:
On July 1 New York federal district court judge Harold Baer, Jr. granted a motion by defendants to dismiss a securities class action against Canadian sportswear company Gildan Activewear. To show scienter, the plaintiffs relied on the fact that Gildan CEO Glenn J. Chamandy and CFO Laurence Sellyn--who were also named as defendants--sold off their Gildan stock for $96 million during the class period. But Judge Harold Baer, Jr. ruled that those sales failed to prove scienter for a variety of reasons.
According to a law firm press release, plaintiffs filed a class action complaint against Gildan Activewear Inc. on June 2, 2008.
The complaint charges Gildan and certain of its officers and directors with violations of the Securities Exchange Act of 1934. Gildan supplies activewear for the wholesale imprinted sportswear market in the United States and Canada, as well as in Europe. The Company sells T-shirts, sport shirts, and fleece in large quantities to wholesale distributors as undecorated blanks, which are subsequently decorated by screenprinters with designs and logos. The complaint alleges that, during the Class Period, defendants issued a series of materially false and misleading statements concerning the Company’s financial performance and prospects. Specifically, the complaint alleges that these statements were materially false and misleading because defendants failed to disclose and/or misrepresented: (i) that sales of Gildan’s activewear were performing below internal expectations as a result of a shortfall in production from its Dominican Republic textile facility; (ii) that Gildan was failing to timely write down an impairment in the value of its inventories, thereby materially overstating its financial results; and (iii) as a result of the foregoing, defendants had no reasonable basis for their earnings guidance for fiscal 2008 and other positive statements about the Company and its business. Then, on April 29, 2008, Gildan issued a press release announcing that it was reducing its earnings per share guidance for the second quarter and full year of fiscal 2008. Upon this news, shares of the Company’s stock fell $10.99 per share, or 30%, to close at $24.93 per share, on heavy trading volume.