T-shirt maker Gildan Activewear Inc. May Face $500 Million Class Action Lawsuit
German institutional investor Metzler Investment GMBH has filed a $500-million class action lawsuit against the T-shirt maker Gildan Activewear Inc at the Ontario Superior Court late last week. However, the news was announced on Monday. The class action claims Gildan issued materially false and misleading statements concerning its financial performance and prospects. Metzler Investment, the leading plaintiff in the case has alleged to have lost around $900,000 after information about the problems at the plant was released. Gildan CEO Glenn Chamandy and a holding company in his name made $95.2 million US selling shares between Aug. 9 and Dec. 5, 2007.
The class action is filed by law firm Siskinds LLP. It was filed on behalf of all persons who bought Gildan securities between Aug. 2, 2007, and April 29, 2008, and who held those shares on April 29. In May 2007, Chamandy announced plans to sell 1.8 million of his 5.5 million Gildan shares over the coming year to seek asset diversification, attain personal liquidity and finance charitable projects in the community. The claim was filed under an untested section of the Ontario Securities Act changed in late 2005. Gildan shares, which plunged from $37 to barely $24 on April 29, closed Monday at $29.23, up 23 cents on the Toronto Stock Exchange.
Though Gildan is a Montreal-based company, the case was filed in Ontario, in part because Quebec class action law isn’t open to institutional investors with more than 50 employees.
Source: CBC NEWS
Filed under Class Action, Shareholder Lawsuit
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