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Reebok Settles Supplier Lawsuit For $18.75 Million

Reebok International Ltd., the Stoughton, Mass., maker of athletic shoes and clothing, has agreed to pay $18.75 million to a one-time supplier to settle a contract violation lawsuit. Reebok admitted no wrongdoing in the settlement. Reebok will pay $2 million this year to Supracor Inc. and the remainder of the settlement during 2001. In its lawsuit, Supracor said Reebok purchased honeycomb cushioning material from a Supracor competitor in violation of a sole-source provision in the companies' contract. Reebok plans to account for the settlement by taking a one-time specialcharge in the 4th quarter of 1999 for the entire settlement amount, plus accrued legal costs of approximately $2.5 million.

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