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July 9, 1997updated 05 Sep 2016 1:01pm

WALL DATA PAYS $9M TO RID ITSELF OF CLASS ACTION SUIT

By CBR Staff Writer

Connectivity specialist Wall Data Inc says it’s simply too expensive to keep fighting a pesky class action suit filed against it way back in 1995 when its share price took a nose dive and is to pay out around $9m to the settle it, even though it continues to deny the shareholders’ claims. The full settlement is some $11.25m, the remainder being paid by Wall Data’s insurers. The company has taken the opportunity to bundle up other expenses it has incurred canning its Salsa line of object modeling tools, incorporating the technology into other products and restructuring some of its businesses and will take a charge of $10.7m against its second quarter which ended on June 30th. Combined with a meager 2% rise in revenue in the quarter to $35.5m compared with $34.8m last year, the company says it expects to report second quarter earnings between $0.17 and $0.20, essentially flat on the late year’s second quarter. Analysts surveyed by First Call had been looking for $0.35 before charges. $9.4m of the $10.7m charge is in cash. Wall Data says the lawsuit has been costing it upwards of $150,000 a month to defend, even before some of the more important parts of the case have been heard. But moreover, the company says it was simply taking up too much of management time, and that’s why it decided to cut its losses. Wall Data’s in the midst of a web and internet overhaul of its products lines in addition to driving its Arpeggio web publishing solution to market. Wall Data chairman and CEO Jim Simpson is retiring at the end of July with a $600,000 golden handshake and company founder John Wall, who succeeded Simpson as president last year, will assume chief executive duties. Simpson’s stock options will be accelerated to July 15th and the company says it may incur a further charge to cover other compensation. The $150m Kirkland, Washington-based company has 700 employees.

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