Thursday, October 23rd9.3°C
23711
23129

Lululemon poised to defeat pant lawsuits, judge's draft decision dismisses cases

NEW YORK, N.Y. - Lululemon Athletica Inc. appeared poised to defeat a class action lawsuit filed against the company over a recall of its black Luon pants last year because they were too sheer.

U.S. Judge Katherine Forrest released a draft decision Friday that proposes the case be dismissed.

The lawsuit by shareholders accused the Vancouver-based athletic-wear company of failing to disclose the quality defects in its Luon yoga pants, which resulted partly due to cost cutting.

It also accused the company of making misleading statements and omissions that caused its stock price to become artificially inflated.

However, the draft decision by Forrest says many of the statements were "simple puffery" by the company and that no reasonable investor would base decisions on them.

"Statements too general to support a reasonable investor's reliance are not actionable," Forrest wrote in the draft.

She also agreed with Lululemon that some excerpts cited by the plaintiffs in the case as false were taken out of context, including a statement on the company's website that the quality of its products are the "highest in the industry."

"In context, it is unreasonable to read the website statement regarding 'highest in the industry' as a guarantee of no product defects," Forrest wrote of one example.

Lululemon took a beating in the wake of the recall last year and the sudden departures of both chief product officer Sheree Waterson and chief executive Christine Day.

Shares in the company fell more than 15 per cent after Day announced that she was leaving the yoga wear maker in June 2013.

Lululemon blamed the sheerness of their pants on a style change and production problems. It later hired a new team to oversee the manufacturing of the pants.

In court documents, Forrest also proposed dismissing a second lawsuit against 13 current or former Lululemon directors or executives for breaking securities laws.

In that case, the executives and directors including Day and chairman Chip Wilson are accused of breach of their fiduciary duty and gross mismanagement.

Forrest is expected to hold a hearing to review the proposed decisions before making them final.

Lululemon (Nasdaq:LULU) shares were up 12 cents at US$54.26 in trading on the Nasdaq market on Friday afternoon.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX14312.07-235.64
S&P CDNX808.00-14.28
DJIA16461.32-153.49
Nasdaq4382.847-36.632
S&P 5001927.11-14.17
CDN Dollar0.8890-0.0005
Gold1239.70-5.80
Oil79.92-0.21
Lumber330.40+1.70
Natural Gas3.656-0.003

 
Okanagan Companies
Pacific Safety0.12+0.02
Knighthawk0.01-0.005
QHR Technologies Inc1.15-0.02
Cantex0.055-0.025
Anavex Life Sciences0.198+0.006
Metalex Ventures0.05+0.005
Russel Metals32.53-0.56
Copper Mountain Mining2.10-0.07
Colorado Resources0.145-0.005
ReliaBrand Inc0.013+0.001
Sunrise Resources Ltd0.05-0.01
Mission Ready Services0.405-0.055

 



23433

FEATURED Property
1927239227-4205 Gellatly Road
2 bedrooms 2 baths
$445,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Keep it rubber side down

This time of year, I always worry about which friends of mine will get caught going off the road in adverse weather conditions. With a little preparation most accidents can be avoided. Having won the...


Big bank predicts rate hike

Photo: Thinkstock.comThe end of record-low rates is nigh, according to one major bank, which has taken a stance and predicted when the Bank of Canada will raise its long-standing overnight rate. &ldq...


Experts share strategies in Kelowna

The third week in October is “Small Business Week”, a week dedicated to supporting local, small businesses. The week was designed to bring awareness to Canadians about the role small busin...

_








Member of BC Press Council


22620