Heelys Inc. said a federal judge has approved a $5.25 million settlement of a class-action lawsuit arising from its 2006 initial public offering.
“Although the company continues to believe that the claims asserted in these lawsuits were without merit and that defendants would have prevailed at trial, we are pleased to have resolved these claims and to continue to focus on Heelys' business initiatives,” Heelys chairman Gary L. Martin said in a written statement.
The class-action suit stemmed from a number of lawsuits filed in late 2007, contending that the company and certain former and current officers and directors breached their fiduciary duties by violating federal securities laws related to its 2006 stock offering.
Heelys' insurance policies funded most of the settlement and related legal costs. The company has already paid its share of the settlement and agreed to institute corporate governance changes.