Foamex reaches stockholder lawsuit settlements

LINWOOD, Pa. (Aug. 15)—Foam product maker Foamex International Inc. has reached ``agreements in principle´´ to settle all lawsuits brought by stockholders of the company during the past two years in Delaware state court and New York City federal court, the firm announced. The Delaware litigation relates to transactions made during the unsuccessful attempts by Trace International Holdings Inc. to acquire Foamex in 1998 and 1999, while the federal suit alleges that Foamex and certain of its directors and officers misrepresented and/or omitted material information about the company´s financial conditions between May 1998 and April 1999. The Delaware settlement calls for a special committee of the Foamex Board of Directors to nominate two independent directors to serve on the Board. It also requires that certain transactions with company affiliates be approved by a majority of the disinterested party on the Board. Under the federal settlement, shareholders who purchased Foamex shares between May 7, 1998, and Apr. 16, 1999, will receive payments—paid by Foamex´s insurance carrier—as defined in the agreement, to be mailed to all affected stockholders this fall, Foamex said.