Gateway to Settle Shareholder Lawsuits

Gateway Inc. on Friday said it had agreed to pay $10.25 million to settle securities lawsuits by shareholders alleging the personal computer maker had misrepresented financial performance.

Gateway said that it wanted to avoid prolonged litigation and that the settlement, which must be approved by a court, would not affect Gateway finances because it would be covered by insurance.

Gateway’s latest quarterly filing listed outstanding securities cases filed in 2000 and 2001 alleging variously that the company, its board and officers had misrepresented Gateway’s financial performance and wasted assets.

“Although we feel these claims are without merit ... settling this matter at this time and avoiding further prolonged litigation is in the best interests of our shareholders,” Gateway said.

Shareholders at several technology companies whose share prices have fallen to a fraction of their highs have filed similar suits alleging that executives misrepresented finances to bolster stock prices.

The main Gateway suits were on behalf of shareholders who bought stock from April 14, 2000, to Feb.28, 2001, when shares of the company traded in a range of $17.20 to more than $70. Gateway shares closed off 17 cents at $5.68 on Friday on the New York Stock Exchange, before news of the settlement was announced.