According to the complaint, during the class period, the defendants knowingly or recklessly failed to disclose the following facts about Ashworth: (1) Ashworth's new, redeveloped infrastructure, including its increasing use of offshore factories, was extremely troubled with inadequate quality-control testing and insufficient supervision; (2) The new infrastructure, while generating short-term cost savings, would require dramatically higher costs in future periods to successfully manufacture, supervise and monitor manufacturing in these locations; (3) due to problems matching production with demand, Ashworth had accumulated large amounts of excessive inventories of its Basics product line; and (3) Ashworth's attempts to accelerate the relocation of larger amounts of its manufacturing operations offshore were resulting in significant operational inefficiencies and greatly increased expense.

The settlement will not be effective until the court grants it final approval. The court has not yet scheduled a hearing on the matter.