Tandon Settles 5 Lawsuits Filed by Investors in ’86
Tandon disclosed that it settled five lawsuits filed by investors against the company and its officers in 1986 that alleged the Chatsworth company misled stockholders by failing to make timely disclosures of its business problems.
Under terms of the settlement, investors who bought shares from Jan. 27, 1983, to June 30, 1985, will receive a total of $8 million cash and 930,000 shares of newly issued Tandon stock. They also will receive $10 million worth of coupons that they can use toward buying Tandon personal computers or redeem for cash or stock at 35% of face value.
Tandon said the $8 million will be paid by its insurers. The company did not admit to any liability in settling the suit, adding that it still believes the suits are groundless. The company said, however, it settled to avoid legal costs and a disruption to its business.
The suits, filed in U.S. District Court in Los Angeles and Los Angeles Superior Court, accused Tandon of failing to disclose such problems as control of expenses and increased competition it faced in 1984. Plaintiffs also accused Tandon officers of profiting by selling stock before the company began reporting a string of losses in late 1984 and in 1985.
In 1984, Tandon was a manufacturer of disk-drive data storage equipment. It has since shifted to become primarily a maker of IBM-compatible personal computers. In December, it announced a tentative agreement to sell nearly all of its disk-drive business to Western Digital in Irvine in a deal valued at nearly $80 million.