DANVILLE, Va., May 16 /PRNewswire-FirstCall/--
DIMON Incorporated (NYSE: DMN) today announced that it has entered into a
conditional settlement agreement to resolve its involvement in the DeLoach
class action litigation. The Settlement Agreement was signed today by the
plaintiffs, on behalf of themselves and the class of plaintiffs they
represent, DIMON, and all but one of the other defendants in the case.
Under the terms of the Settlement Agreement, DIMON will pay $6 million of
the approximately $210 million of cash settlement payments to be paid by the
settling defendants, and will not be obligated to pay any portion of the
plaintiffs' attorneys' fees or other costs or expenses awarded by the Court,
which will be paid by certain other settling defendants. In addition, certain
other settling defendants who are cigarette manufacturers have agreed to
purchase certain minimum amounts of U.S. grown tobacco over the next ten
years. In exchange, the plaintiffs and the members of the class will release
the settling defendants, including DIMON and its affiliates, from any and all
claims, damages, or liabilities of any nature whatsoever, known or unknown,
under state or federal law, that any plaintiff or member of the class has or
had, that was or could have been alleged as a class action in the DeLoach
litigation.
The Settlement Agreement expressly recognizes DIMON's continued denial of
wrongdoing and liability, and does not constitute an admission of any of the
claims or allegations made by the plaintiffs in the case, or any admission or
evidence of a violation of any law or other wrongdoing by any of the settling
defendants.
The Settlement Agreement has received preliminary approval from the Court,
and consummation of the settlement is subject to final approval of the Court
following a required notice to the members of the class of plaintiffs. It is
expected that any such final approval will occur in mid to late September.
Certain members of the potential class of plaintiffs may opt out of the
settlement in accordance with the rules governing class action litigation.
The DeLoach litigation will continue against the non-settling defendant.
Despite its good defenses to the claims asserted, and its continued denial
of any wrongdoing or liability for the actions alleged in the litigation,
DIMON believes it is in its best interests to settle the litigation in order
to avoid the further expense, inconvenience and burden of the litigation and
the diversion of personnel and resources, to put to rest the controversy with
valued suppliers of tobacco, and to avoid the risks inherent in uncertain
complex litigation.
Brian J. Harker, Chairman and Chief Executive Officer, stated, "Our
decision to settle at this time is based on pragmatic business judgment. We
believe that this settlement should result in a positive outcome for the leaf
industry given the commitments by the domestic cigarette manufacturers to
purchase certain minimum amounts of U.S. leaf tobacco over the next ten years.
Ultimately we are hopeful that these commitments may facilitate an acceptable
quota buyout that could make U.S. leaf tobacco more competitive in world
markets thereby eliminating the uncertainty surrounding U.S. leaf tobacco
exports."
DeLoach, et al. v. Philip Morris Companies Inc., et al., is a lawsuit
pending in the United States District Court for the Middle District of North
Carolina (Case No. 00-CV-1235). On April 3, 2002, the Court issued an opinion
and order certifying a class of plaintiffs. As certified, the class consists
of persons who, at any time from March 1, 1996 through February 28, 2001, held
a quota to grow or produced and sold U.S. flue-cured and burley tobacco. The
plaintiffs allege that the defendants, which include cigarette manufacturers
and leaf tobacco dealers, including DIMON, violated the antitrust laws by
conspiring to rig bids at auction and undermine the federal government quota
and price support program. The plaintiffs seek injunctive relief, treble
damages in an unspecified amount, pre- and post-judgment interest, attorneys'
fees and costs of litigation. DIMON and the other defendants have asserted a
number of defenses to the allegations made.
A copy of the Settlement Agreement is included with the Court's public
papers relating to the litigation.
This press release contains "forward-looking statements" as defined in the
Private Securities Litigation Reform Act of 1995. These statements are based
on current expectations of future events. If underlying assumptions prove
inaccurate or unknown risks or uncertainties materialize, actual results could
vary materially from the Company's expectations and projections. Risks and
uncertainties include changes in the timing of anticipated shipments, changes
in anticipated geographic product sourcing, political instability in sourcing
locations, currency and interest rate fluctuations, shifts in the global
supply and demand position for the Company's tobacco products, and the impact
of regulation and litigation on the Company's customers. A further list and
description of these risks, uncertainties and other factors can be found in
the Company's Annual Report on Form 10-K for the fiscal year ended June 30,
2002 and other filings with the Securities and Exchange Commission.
DIMON Incorporated is the world's second largest dealer of leaf tobacco
with operations in more than 30 countries.
SOURCE DIMON Incorporated
/CONTACT: Ritchie L. Bond of DIMON Incorporated, +1-434-791-6952/
/Web site: http://www.dimon.com/