Cutter & Buck Inc. announced that Helen M. Rockey, executive vice president for markets and products, has resigned from the Company, and that Pat Nugent, vice president of merchandising and design, also recently resigned. In addition, the Company formally announced its new director and officer insurance coverage, and the filing of a lawsuit against another insurance carrier for its actions in trying to rescind the Company’s directors and officers liability insurance.
Helen Rockey was appointed executive vice president for markets and products last November, but efforts to reach final language on employment documents were not successful. “We certainly appreciate all Helen has done and we wish her well,” said Fran Conley, Cutter & Buck CEO. The Company has initiated a search for her successor.
Separately, an internal reorganization eliminated one layer of management, and managers of the design and product planning departments now report directly to the group manager. The position formerly held by Pat Nugent was eliminated as part of that reorganization, and Nugent resigned. “Were sorry to lose Pat, but understand her decision,” said Conley. “She contributed greatly to the strong Cutter & Buck product line we enjoy today, and she developed the managers who now assume more responsibility for our product offerings.”
Cutter & Buck also announced it has obtained directors and officers (D & O) insurance underwritten by a member company of the American International Group. This new insurance does not cover the matters addressed by the current shareholder lawsuits, and the Company has filed a lawsuit to block Genesis Insurance Company from rescinding coverage following the Company’s restatement of earnings last year.
“The Company believes that Genesis Insurance Company is not entitled to rescind that policy coverage and asked Genesis to reconsider its decision,” said Conley. “Genesis chose not to change its position and the Company is pursuing its legal rights.”
If Genesis is permitted to rescind its coverage, then the Company would likely be responsible to bear the full consequences of the pending litigation. While suits of this type may be costly, these suits are still in preliminary stages and the Company is not in a position to provide any guidance on those costs or outcomes.
