Cognitronics Settles Class-Action Lawsuits
DANBURY, Conn., Jan. 29 /PRNewswire/ -- In another milestone in its recovery, Cognitronics Corporation (Amex: CGN -
news) today announced that an agreement has been entered into to settle the consolidated class-action lawsuits filed against the
company in March 1993.
The company said that the settlement, which is subject to the execution of a stipulation of settlement and court approval,
provides for the payment of an aggregate of $2.3 million by the company and its insurer into a settlement fund. Further, in its
fourth quarter ended December 31, 1997, the company will record a one-time, pre-tax charge of approximately $900,000
(net of tax - $550,000, or $.14 per diluted share) for its share of the settlement and expenses related to these lawsuits.
Cognitronics and certain of its current and former officers and directors are named in the consolidated class-action lawsuits
filed in the United States District Court for the District of Connecticut on behalf of all persons who purchased Cognitronics'
stock during the period from October 29, 1992 through March 11, 1993.
Cognitronics denies the material allegations in the consolidated complaint and admits no wrongdoing or liability, but agreed to
the settlement to avoid the ongoing expense and management's distraction and time related to further extensive legal
proceedings. The settlement will result in a complete release of all claims related to this matter.
''This settlement is the last major factor in the company's restructuring and recovery, which began in 1994, and puts our only
legal problem behind us,'' said Brian J. Kelley, president and chief executive officer of Cognitronics. ''With it, we have
significantly lowered our legal expenses and increased the confidence of our employees, stockholders and potential investors.''
Statements contained herein which are not historical facts are forward-looking statements. The forward-looking statements in
this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve a number of risks and uncertainties including, but not limited to, variability of sales volume
from quarter to quarter, product demand, market acceptance, litigation, risk of dependence on significant customers, third
party suppliers and intellectual property rights, risks in product and technology development and other risk factors detailed in
the company's Securities and Exchange Commission filings.
Cognitronics is a leading manufacturer and supplier of voice information systems, including telephone network and call
management products, to telephone operating companies and original equipment manufacturers.
SOURCE: Cognitronics Corporation |
