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From Home Furnishing Business
Jury Issues $5.8M Ruling Against La-Z-Boy
March 21,
2016 by in Industry, Legal 
A jury has returned a $5.8 million verdict against furniture supplier La-Z-Boy (NYSE: LZB) in the U.S. District Court for the Southern District of Florida.
The lawsuit involves a dispute over whether a 2002 contract requires La-Z-Boy to pay royalties on some of its power products.
The court has not yet entered judgment on the verdict and has not yet ruled on the company's affirmative defenses.
La-Z-Boy said it complied with all contractual requirements and while it prevailed with respect to some products, the jury found the company responsible for royalties on others. Oral argument on the La-Z-Boy’s affirmative defenses has begun and is expected to be completed in April.
In June, La-Z-Boy will report financial results for the fiscal year ending April 30. If, prior to the filing, La-Z-Boy does not prevail on its defenses and the court enters a judgment based on the jury verdict, the company's financial results for the year would reflect a pre-tax accrual of $5.8 million, or approximately $0.07 per diluted share, in connection with this litigation.
The jury's award applied to certain products using mechanisms from Medgal Associates La-Z-Boy sold from calendar 2012 through early 2016. If judgment were ultimately entered based on the jury's verdict and upheld through post-trial motions and appeals, La-Z-Boy would owe royalties on future sales of those products through the end of calendar 2021.