Ailing and beleaguered Wespercorp, a Santa Ana manufacturer of computer peripherals, said Friday that it has agreed to a proposed settlement of a shareholder's 2-year-old class-action lawsuit alleging that the company omitted and misrepresented significant information in its 1982 and 1983 financial statements and in a 1983 stock offering prospectus.
Under terms of the proposed settlement, company shareholders who bought Wespercorp stock between Jan. 6, 1983, and Feb. 8, 1984, will be entitled to submit claims for money from a settlement fund which will be divided among qualifying stockholders based on the number of shares each bought, the company said.
Wespercorp officials refused to disclose the monetary value of the settlement, which must be formally approved by a U.S. District Court judge in Los Angeles and by the suit's plaintiffs. But the company said all but $40,000 of the total will be covered by Wespercorp's insurance firm.
Daniel Whelan, the company's chief financial officer said he did not know how many of Wespercorp's 700 shareholders of record qualify to receive part of the settlement.
"I would have liked to have seen this settled a long time ago," Whelan said. "We, as a company, are trying to get it off our backs."
The suit was filed in April, 1984, by Wespercorp stockholder Sam Wietschner on behalf of all shareholders who purchased Wespercorp stock on the open market between Jan. 6 and Oct. 12, 1983.
The suit alleges that various company documents, including a Wespercorp prospectus dated Feb. 8, 1983, misrepresented and omitted information about the company's financial results for the three-month periods ended Dec. 31, 1982, and March 31, 1983.
In October, 1983, after restating the company's second- and third-quarter financial results for that year, Wespercorp officials said they anticipated a lawsuit by disgruntled shareholders because of the worsened financial picture that the restated numbers showed.
"I don't think we're denying or admitting that (the allegations are true)," Whelan said. "We're a troubled company with a lot of lawsuits, and this is the last one we had to settle."
The company has lost $4.6 million in the past two years, and it recently began negotiating with its major bank lender to extend the Jan. 31 due date for a loan.
Wespercorp reached an out-of-court settlement last month on a $4-million breach-of-contract suit, and in September the company agreed to phase out production and sales of a printer controller as part of a settlement of a patent infringement suit brought against the company earlier in the year.