Friday, John Thonet, chairman of the board for Herley Industries, Inc. (HRLY) said that the company has reached an agreement to settle all securities class actions originally filed in 2006 in the United States District Court for the Eastern District of Pennsylvania, consolidated at In re Herley Industries, Inc. Securities Litigation. The agreement has been preliminarily approved by the Court.
The company said that the proposed settlement resolves any and all lawsuits filed against it as a result of the indictment brought in June 2006.
As previously disclosed, the company and certain of its current and former officers and directors were named as defendants in a class action under which the lead plaintiff sought damages in excess of $80 million on behalf of a class of purchasers of the Company's securities between October 1, 2001 and June 14, 2006 for alleged violations of the federal securities laws.
The company and the individual defendants have maintained that the claims raised in the class action were without merit, and have vigorously contested them. As part of the settlement, the company and the individual defendants continue to deny any wrongdoing.
The terms of the settlement provide for the dismissal of the litigation against all defendants, including the company, and the creation by the company of a $10 million settlement fund. The fund will be allocated, after deduction of court-ordered expenses and counsel fees, among members of the settlement class who submit valid proofs of claims.
The settlement remains subject to the final approval of the Court, which will address this issue on September 13.
In connection with the settlement, Herley Industries will record a charge to operations of $10 million during its fiscal fourth quarter.
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