Stockholders v Enterasys Networks Inc., as Successor of Cabletron
Enterasys Settles Claims of Predecessor Cabletron for 10.5 Million
Enterasys Networks Inc. (NYSE: ETS) announced today that it has entered into an agreement in principle to settle shareholder litigation filed in 1997 against its predecessor, Cabletron Systems, Inc., and certain Cabletron directors and officers. The settlement, which is subject to execution of a final settlement agreement and subsequent court approval, is expected to be signed by the parties on or before January 25, 2005.
Under the terms of the agreement, Enterasys has agreed to pay $10.5 million. The Company expects all but approximately $500,000 of this amount to be recovered from proceeds of certain Company insurance policies. As a result, Enterasys expects to recognize a one-time net charge of approximately $500,000 in the fourth quarter of fiscal 2004.
The settlement resolves all claims made in nine class action lawsuits originally filed in the United States District Court for the District of New Hampshire against Cabletron Systems, Inc., and various individual defendants. The litigation does not involve any current executives of Enterasys Networks.
