Gemstar Settles Class-Action Suits2/12/2004 7:52 AM Eastern
Gemstar-TV Guide International Inc. said Thursday that it has agreed to settle shareholders’ class-action lawsuits pending in the U.S. District Court for the Central District of California.
The suits were related to charges against the company’s former management related to certain accounting practices and financial reporting.
The $67.5 million settlement will be paid in cash and stock.
Gemstar-TV Guide will pay an aggregate of $42.5 million in cash in a combination of direct payments and payments that may be made through the Securities and Exchange Commission.
In addition, the company will issue 4,105,090 shares of common stock, which was valued at $6.09 per share on the date the agreement was reached, or a total of $25 million. The number of shares will increase if the price per share at the time of distribution to the class is below $6.09.
The agreement also gives Gemstar-TV Guide the option to substitute cash for up to 2,052,545 of the shares at $6.09 each prior to the final settlement being approved.
"This settlement is a significant step in Gemstar-TV Guide's efforts to resolve the legal issues that have faced the company," CEO Jeff Shell said in a prepared statement.
"As we put the issues related to past management behind us, the new executive team can focus more completely on maximizing the opportunities for growth and development in front of us," he added.