According to the Company’s FORM 10-K For the Fiscal Year Ended September 30, 2001, after the Court granted plaintiff's motion for class certification, the parties reached a settlement agreement in May 2000, which was approved by the Court in September 2000. The parties agreed to settle the litigation for $2,350, all of which was covered by insurance.
On January 11, 1999, the Court entered the Order consolidating several class actions, and further, appointed the Guilford Mills Shareholders as lead plaintiffs and appointed Executive Committee. On February 8, 1999, a Consolidated Amended Complaint was filed and the defendants responded by filing motions to dismiss the Consolidated Amended Complaint. On July 21, 1999, the Court entered the Memorandum and Order dismissing the action as to one of the individual defendants, and denying the motion in all other respects. On September 7, 1999, a Consolidated and Amended Class Action Complaint was filed. On March 22, 2000, the Court entered the Memorandum Decision granting the plaintiffs’ motion for class certification, and on July 14, 2000, a Stipulation of Settlement and Order preliminarily approving the settlement were filed.
Several purported class action lawsuits have been filed on behalf of
purchasers of the Company's common stock against the Company and certain of its
officers and directors. These lawsuits purport to allege claims under Section
10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, in connection with the Company's public disclosure of
accounting irregularities at the Hofmann Laces unit in fiscal year 1998.
Specifically, the actions allege that, during the class period (January 20, 1998
through October 26, 1998), defendants materially misrepresented the Company's
financial condition and overstated the Company's reported earnings.