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Motorhome manufacturer Winnebago has settled a lawsuit brought against the firm by current and former employees for a total of $7.34 million pre-tax.
In the suit, Sanft, et al vs. Winnebago Industries Inc., plaintiffs included 21 participants in the Winnebago Industries Inc. Deferred Compensation Plan and the Winnebago Industries Inc. Deferred Incentive Formula Bonus Plan. The plaintiffs wanted to negate certain amendments made to the plans in 1994 that reduced benefits which some participants would receive under the plans.
The settlement will result in a partial reinstatement of the alleged lost benefits and will have a present value cost to the company of around $5.3 million, Winnebago reported today (May 28).
Additionally, Winnebago voluntarily decided to provide the same benefit to an additional 22 nonplaintiff participants in the plans, which will create an additional present value cost to the company of around $2.04 million.
To account for the settlement, Winnebago, a New York Stock Exchange-listed company, will take a $7.34 million pre-tax charge against its earnings for its third fiscal quarter, which includes the current March-through-May period.
The after-tax cost of the settlement equates to around $4.59 million, according to the company.
Winnebago will pay around $1.3 million during its fourth fiscal quarter with the balance of the settlement to be paid out in monthly increments over a 15-year period.
Winnebago still believes it had “meritorious defenses to the litigation,” but Chairman, President and CEO Bruce Hertzke said the company also is “cognizant of the uncertainties of litigation and the undesirability of litigation between the company and current and former employees.
“The company is pleased to have reached a settlement of this matter and looks forward to continuing its good relations with current and former employees,” Hertzke said.