Bar-code company Symbol Technologies Inc. announced that its wholly owned subsidiary Telxon Corp. will receive $18 million from PricewaterhouseCoopers to settle a case against its former auditor over the alleged mishandling of its books.
Telxon sued PwC in 2001 for the audit firm’s role in the company’s restatement for 1996 through the first half of fiscal 1999; the restatement triggered a shareholder class-action lawsuit that Telxon settled last year for $37 million. Symbol acquired the company in 2000.
Under the terms of a separate agreement between Telxon and the class, Telxon will pay up to $3 million of the proceeds from the PwC settlement to those shareholder plaintiffs. Further, if PwC reaches its own settlement with the class-action plaintiffs before certain motions are decided, the auditor will pay Telxon an additional $1 million.
A number of other issues have plagued Telxon and Symbol in recent years. In May 2004, Symbol announced that a judgment had been entered against Telxon in favor of Smart Media of Delaware Inc. for about $218 million plus interest. Smart Media argued in a 1999 lawsuit that it was harmed when Telxon failed to form a business alliance with it and provide funding to develop its product.
The following month, Symbol shelled out $138 million to settle criminal and civil investigations as well as shareholder lawsuits in connection with its years-long accounting scandal. Seven former executives, including onetime chief financial officer Kenneth Jaeggi, were indicted for their alleged roles in inflating the company’s reported earnings.
Jaeggi’s successor, Mark Greenquist, resigned “to pursue other career interests” last month following Symbol’s announcement that it was revising downward its second-quarter revenue projections.