Computer products direct marketer CDW Computer Inc., Vernon Hills, IL, will pay a former company shareholder roughly $4.4 million to settle a lawsuit leveled against CDW and chairman/CEO Michael P. Krasny, who is also the company's majority shareholder.
The suit was originally brought against CDW and Krasny by an unnamed former director and executive officer of the company.
The plaintiff initiated the suit against CDW and Krasny in June 1993, seeking actual and punitive damages related to an earlier stock buyout. In July 1990, the company had redeemed the shares of the company then held by the plaintiff. The shares' purchase price totaled about $500,000, based on book value, in accordance with a buyout agreement.
In a prepared statement, CDW said the settlement amount was based on the difference between the fair market value of the company when the plaintiff's interest was redeemed and the $500,000 already paid to the plaintiff. CDW and Krasny asserted that their actions related to the buyout were “honest and proper,” and that the allegations were “without merit.”
However, the company agreed to dismiss pending litigation with the one-time, additional payment of $4.4 million. Because the money will be paid entirely by Krasny, CDW will suffer no cash flow impact from the settlement, the company said. For the 12 months ended Sept. 30, CDW's revenue totaled $1.6 billion.
