Xerox stumps up $670m to settle lawsuit
Cry me a muddy, grey river
Xerox is to pay $670m to settle a securities lawsuit which dates back to 2000, without admitting any wrongdoing.
The world’s biggest provider of grey copier boxes said yesterday that it had been granted preliminary court approval to settle the Carlson v. Xerox Corp lawsuit.
The case had been brought on behalf of investors who bought up stock and bonds in the company between 17 February 1998 and 27 June 2002.
Xerox spent a lot of time in the early Noughties hopping in and out of court over its book-keeping practices. In 2002 the firm paid a $10m penalty to settle US Securities and Exchange Commission charges that Xerox had fluffed its numbers to inflate less-than-pretty profits. Eventually, it was forced to restate half a decade’s worth of results.
The company said that it planned to take an after-tax charge of $491m in the first quarter of this year and added that it has put reserves in its piggybank for other pending securities-related cases. It will stump up the cash for the settlement in five instalments this year.
Former independent auditor and co-defendant in the lawsuit KPMG will pay $80m into the settlement fund.
Xerox boss Anne Mulcahy sought to ease shareholders' concerns about the painful settlement. She said: “Our strong financial position gives us the flexibility to resolve this issue while continuing to deliver shareholder value through share repurchase, dividends and acquisitions."
Last November Xerox restored its quarterly dividend after a six-year hiatus. ®