Canada’s Superior Court of Justice (Ontario) has ruled in the matter of costs regarding a class action trial conducted in 2004 against Danier Leather. The class action concerned information contained in a financial forecast issued by Danier during its initial public offering (IPO) in 1998. On May 7, 2004 the trial Judge concluded that two senior officers of the company had an honest belief at the time the IPO closed that the forecast prepared during the process could be achieved. The Judge further held that the forecast was, in fact, substantially achieved. However, it also found that a proper review had not been done on the date of closing and had it been done, the company should have concluded that the forecasted results were not achievable. The Judge ruled in favour of the plaintiffs and awarded damages to all Canadian shareholders who had purchased shares in the IPO.
However, the trial Judge did not deal with the awarding of costs at that time. A hearing in that regard was held in April 2005. In its decision, the Court awarded a portion of the costs claimed by the plaintiffs but referred the matter for assessment to determine the amount of costs to be paid, however, based on the information as of this date, Danier estimates that this award, if unchanged on appeal, would cost approximately $3 million to $4 million.
Danier’s appeal of the trial decision is currently scheduled to be heard in June 2005. Danier also plans to appeal certain aspects of the costs award.
Danier Leather is an integrated designer, manufacturer, and retailer of high-quality leather and suede clothing and accessories.
