Kaypro Settles Holders’ Suit on Stock Sale

Kaypro has reached an agreement to pay shareholders $9.3 million and settle a class-action suit that accused company officials of fraudulently inflating earnings projections before an initial public stock offering in August, 1983, it was announced Tuesday.

The settlement will be largely paid for by Kaypro’s insurance carrier and “will not have any significant impact” on the company, Kaypro Controller Robert Gorski said Tuesday.

The Solana Beach, Calif.-based computer manufacturer acknowledged no wrongdoing in the settlement, which still needs the approval of a federal judge in San Diego. That process is expected to take several months.

Kaypro’s auditors are expected to reissue “unqualified” reports for the company’s 1984, 1985 and 1986 fiscal reports. Peat, Marwick, Mitchell & Co. has been issuing qualified reports on Kaypro because of uncertainty about the company’s potential liability.

“Kaypro is pleased with the outcome of the settlement negotiations,” Chairman Andrew F. Kay said.

“It’s an excellent settlement figure for the plaintiffs, and Kaypro has ended its contingent liability,” said William Lerach, attorney for the plaintiffs.