An earnings dispute dating back to 2004 has finally been settled but it’s cost the company a senior executive and quite a bit of money in the process. So how much of a bite will it take out of Red Hat over this case? Linux Planet gets the details.
Some lawsuits take longer than others to settle — just ask Linux vendor Red Hat.
Today, Red Hat (NYSE: RHT) announced that it had reached an agreement to settle a class-action lawsuit from some of its shareholders that started back in July 2004.
Settling the lawsuit will cost Red Hat $8.8 million, which the company said it would take as a one-time charge when it reports earnings later this month for the quarter ending Nov. 30.
The lawsuit stemmed from Red Hat’s earnings restatement in 2004 that followed the resignation of then-CFO Kevin Thompson.
At the time, Red Hat restated three years’ worth of earnings as it changed the way it recognized revenues from software subscriptions. The move led to a decline in the value of Red Hat’s share price, which dropped by as much as 22 percent after it first announced the restatement.
