Under Armour agrees to a substantial settlement of $434 million in a case alleging misinformation to shareholders.
- The lawsuit dates back to 2017, accusing the company of misleading shareholders regarding its financial growth.
- Settlement aims to avoid a trial initially set to commence in July at the Baltimore federal court.
- Under Armour plans to finance the settlement with cash and credit resources.
- The company denies any wrongdoing, focusing on moving past the litigation.
Under Armour has resolved to settle a long-standing lawsuit by agreeing to pay $434 million. The claim, which originated in 2017, alleged that the US sportswear brand, along with its CEO Kevin Plank, provided misleading information to shareholders concerning the company’s financial health in a bid to meet Wall Street forecasts.
By settling, Under Armour seeks to avoid a trial that was scheduled to begin in mid-July 2024 at a federal court in Baltimore. The proposed settlement, however, still requires court approval to be finalised, which would conclude all claims against the company and associated defendants.
The sportswear brand plans to cover the settlement payment using cash on hand in addition to leveraging a $1.1 billion credit facility. This financial strategy demonstrates Under Armour’s commitment to managing its liabilities while maintaining operational flexibility.
Mehri Shadman, Under Armour’s chief legal officer and corporate secretary, expressed the company’s position by stating that all sales and accounting practices were in compliance and denied any misconduct. Shadman highlighted that resolving the litigation enables the company to focus on strategic priorities without the distraction of ongoing legal challenges.
Previously, in 2021, Under Armour settled charges with the Securities and Exchange Commission for $9 million, which also involved accusations of revenue misrepresentation. This pattern of settlements underlines the company’s approach to resolving disputes without engaging in prolonged legal battles.
The resolution of this lawsuit allows Under Armour to concentrate on its strategic business goals, moving beyond legal distractions.
