COCKEYSVILLE, MD--(BUSINESS WIRE)--June 28, 2001--Acrodyne Communications, Inc. ("Acrodyne" or the "Company") (ACROE) announced today that the proposed settlement of that certain class action litigation filed in the United States District Court for the District of Maryland in which the Company and two of its officers and directors were named defendants has been finally approved.
The settlement requires the Company to issue to the class plaintiffs in the aggregate five (5) year warrants to purchase One Million Six Hundred Thousand (1,600,000) shares of the Company's voting common stock at an exercise price of One Dollar ($1.00) per share and to pay the class plaintiffs Seven Hundred Fifty Thousand Dollars ($750,000.00) in the aggregate. The payment of cash portion of the settlement has been funded by the Company's officers and directors indemnity insurance policy. The Court, by Order and Final Judgement dated June 26, 2001: (i) found the settlement to be fair, reasonable, and adequate and in the best interests of the parties; (ii) settled, released, discharged and dismissed with prejudice the cases against the defendants; (iii) determined that the neither the settlement nor any of the documents or statements associated therewith are, or shall be construed as, a concession or admission by the defendants of the existence of any damages or wrongdoing; and (vi) awarded the plaintiffs' counsel 25% of the gross amount of the settlement fund as attorneys' fees, which amount is to be paid out of the settlement fund.
The Company also announced that its negotiations with Sinclair Broadcast Group, Inc. (NASDAQ:SBGI) its single largest shareholder and creditor, regarding a plan of recapitalization and the restructure of the Company's debt are again moving forward. While there is no final agreement at this time (and any final agreement is still contingent upon the occurrence of certain events, including the restructure of some of the Company's non-Sinclair debt and obligations), the Company reported that it is optimistic that the negotiations have resumed and is hopeful that it will be able to complete a fair arrangement that will afford the Company the financial stability to continue operations and build for the future. For more details regarding the negotiations with Sinclair on a proposed plan recapitalization and a restructure of the Company's debt, please see the Operations and Business Risk Section of Note 1 of the Notes to Consolidated Financial Statements of December 31, 2000 and 1999 that are part of the 1999 Form 10KSB/B and 2000 Form 8K filed with U.S. Securities and Exchange Commission on April 17, 2001.
The Company's Chairman and President, Nathaniel Ostroff, commented: "We are pleased that the Company has been able to finally resolve the shareholder litigation. This is another giant step for Acrodyne. As a result of the approval by the court of the settlement, the Company's demonstrated ability to build and deliver its new Quantum transmitter product line, and the receipt of new non-Sinclair Orders for Quantum Transmitters, the company is now in a position to plan and build for the future. If we are able to now restructure some of the Company's non-Sinclair obligations, the new credit facility and plan of recapitalization with Sinclair should become a reality. In this regard, we are hopeful of reaching an acceptable agreement with Sinclair on a new and expanded credit facility by the end of the third
fiscal quarter."
Sinclair commented: "The litigation settlement removes one of the most significant hurdles to any recapitalization of Acrodyne. It is great news for the Company and all its shareholders."
Acrodyne Industries, Inc., the operating subsidiary of Acrodyne Communications, Inc., and a publicly traded company, has been an established and respected manufacturer of television broadcast
equipment for over three decades. Acrodyne is a leading producer of technically advanced, high quality television transmitters.
Sinclair Broadcast Group (NASDAQ:SBGI) is a diversified broadcasting company that currently owns or programs 61 television stations. Sinclair's television group reaches approximately 25% of U.S. television households and includes ABC, CBS, FOX, NBC, WB, and UPN affiliates.
This press release may contain forward-looking statements, which are subject to certain risks and uncertainties that could cause actual results to differ materially from those expressed or implied in the forward-looking statements. Factors that could cause actual results to differ materially from those expressed or implied in such forward-looking statements include our high level of indebtedness and our ability to refinance our substantial debt and contractual obligations; our ability to make interest and principal payments on our debt and other contractual obligations; our ability to improve our operating performance; the outcomes of pending lawsuits and/or claims involving our financial reporting and other matters; our ability to manufacture and sell our new Quantum Transmitter product line in a timely manner; regulatory changes governing transmission platforms; general economic and marketplace conditions; interest rate fluctuations; access to capital; and our ability to develop, implement and maintain reliable and adequate internal accounting systems and controls. Consequently, all of the forward-looking statements made in this press release are qualified by these and other factors, risks and uncertainties. Readers are also directed to consider other risks and uncertainties discussed in documents filed and to be filed by the Company with the SEC.
CONTACT: Acrodyne Holdings
Ellen J. Rainey
610-917-1182
ellen.rainey@acrodyne.com
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