Troubled Iwerks Agrees to Settle Investor Suits
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Iwerks Entertainment Inc. in Burbank said it has tentatively agreed to settle all pending shareholder class-action lawsuits against it.
The agreement calls for Iwerks to pay $1.75 million and to issue 250,000 shares of its common stock and 500,000 warrants to purchase common stock at an exercise price of $2 below the average trading price during a specified time period. The company said the cash amount would be covered by its insurance.
Iwerks said it took a charge against its fiscal fourth-quarter earnings to cover the cost of the settlement. The deal remains subject to a definitive agreement and court approval, it said.
Once hailed as a promising venture specializing in big-screen theaters, simulation rides and virtual-reality attractions, Iwerks has recently been plagued by problems related to acquisition costs, difficulties implementing its marketing strategy and competition.
In the fiscal year that ended June 30, Iwerks lost $13.4 million, and last week, co-founder Stanley Kinsey resigned as chairman.
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