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News and Press Releases |
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HEADLINE:
The Singing Machine Company Announces Settlement Of Class Action And Derivative Lawsuits
By: Staff Writer
Business Wire. April 13, 2004
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EXCERPT: The Singing Machine Company (AMEX:SMD) today announced a settlement of the class action and derivative lawsuits filed against the company in 2003. The settlement is subject to documentation and final approval by the Court. Terms include the issuance of up to 400,000 shares of common stock and a cash payment totaling $1,275,000, which includes $800,000 to be paid by The Singing Machine and $475,000 to be paid by the company's former auditor. The Singing Machine expects that its portion of the cash payment will be covered by its liability insurance. In addition, the settlement obligates The Singing Machine to implement certain corporate governance changes, including an expansion of its Board of Directors to six members with independent directors comprising at least 2/3 of the total Board seats, and may also involve other non-cash consideration. The court is set to hear a motion for preliminary approval of the settlement later this month. If granted, as the Singing Machine expects, the Court will direct that notices be given to shareholders of The Singing Machine who are members of the class action lawsuit about their rights to participate in the settlement or to opt out. Y.P. Chan, Interim CEO, said, "We are pleased to have entered into a settlement agreement in this matter. All of our efforts and resources now are focused exclusively on building our business." Separately, The Singing Machine announced the resignation of John Dahl, senior vice president of finance. Dahl had joined the company in November 2003.
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