July 14, 2024

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Council superannuation fund settles Under Armour’s legal claim

Council superannuation fund settles Under Armour’s legal claim

Image source, Getty Images

Comment on the photo, The clothing company’s market value is more than $3 billion

  • author, Craig Williams
  • Role, BBC Scotland News

Lawyers working for a pension fund representing workers on three Scottish councils have won a $434 million settlement from US sportswear company Under Armour.

The North East Scotland Pension Fund (NESPF) runs the scheme for 71,000 workers including Aberdeen, Aberdeenshire and Moray Council employees.

The fund invested millions of pounds in Under Armor shares but accused the company of making false statements about its products.

The proposed settlement, which is awaiting court approval, comes weeks before the start of a jury trial in the United States of America.

NESPF served as lead plaintiff in a class action lawsuit against Under Armour.

A class action lawsuit is a type of lawsuit in which one plaintiff brings a claim on behalf of a larger group of people who suffered a similar loss.

“An important win for investors”

The lawsuit was handled by the American company Robbins Geller Rudman and Dowd LLP.

Mark Solomon, a partner at the firm and NESPF’s counsel as lead plaintiff, said:

“This is an important win for investors and a strong message to directors and officers of public companies.

“Previous government enforcement efforts resulted in a modest penalty of $9 million. Obtaining a recovery nearly 50 times larger underscores the critical role pension funds can play in holding companies accountable.”

The company’s announcement of the settlement includes a comment on behalf of the Fund.

BBC News has contacted the fund for further comment.

“Not a confession”

Under Armor is headquartered in Baltimore, Maryland. It was founded in 1996 by former college football player Kevin Blank.

It is listed on the New York Stock Exchange (NYSE) and has a market capitalization of $3 billion (£4.74 billion).

A statement on the company’s website said it had consistently denied the accusations and “entered into this agreement on principle, which is not an admission or discovery of error or wrongdoing, given the costs and risks inherent in litigation.”

The statement confirms that the company will pay $434 million to settle claims filed on behalf of purchasers of the company’s publicly traded shares from September 16, 2015 to November 1, 2019.

It says the settlement, if approved by the court, “will resolve all claims against Under Armor and the other defendants in this matter.”

Chief Legal Officer and Company Secretary Mehri Shadman said: “We firmly believe that our sales practices, accounting practices and disclosures were appropriate, and we deny any wrongdoing in this case.”

“Today’s announcement allows us to move beyond this matter that is more than seven years old so that we can avoid the ongoing distraction of litigation and provide certainty to the business at a time when we are executing on important strategic priorities.”