Award Tripled in Fleetwood, Coleman Case
Friday, January 21, 2005
Fleetwood Enterprises Inc. announced today (Jan. 21) that a Kansas judge had nearly tripled the award for damages to The Coleman Co. in its case against Fleetwood Folding Trailers Inc.
According to a press release, the judge awarded Coleman approximately $14.6 million. Previously, the jury had ordered Fleetwood to pay Wichita, Kan.-based Coleman $5.2 million. Fleetwood said it would be appealing the decision.
Riverside, Calif.-based Fleetwood restated that the payment would be reflected in the company's fiscal third quarter, ending Jan. 23. Coupled with a slowdown in retail sales, Fleetwood had previously revised expectations for the third quarter, indicating the loss would be wider than anticipated.
The firm is still expecting to be profitable in its fourth quarter, but the recent ruling now "makes it less likely" that Fleetwood would be profitable for the full fiscal year.
"There is no basis for treble damages in a case of this nature, and there is no precedent for such an award," said Edward B. Caudill, president and CEO. "We fully intend to appeal this ruling."
Caudill added, "We will not be required to make any payments on this judgment until the appeal process is fully completed. We will be required to post a bond in order to pursue an appeal, but we reiterate our prior statement that we believe we have a sufficient combination of cash, borrowing capacity and access to other sources of external funding to continue to meet our foreseeable cash flow requirements."
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