Risk & Compliance

Judge Dismisses Suit Against Visteon

Charges against former and current executives — including CFOs — are also rejected.
Stephen TaubSeptember 8, 2006

A federal judge has dismissed a lawsuit against Visteon and four current and former executives, including two finance executives, according to Bloomberg News.

Visteon was sued in February 2005 after it restated earnings. Shareholders alleged that certain company executives failed to disclose the risks of being spun off by Ford Motor in 2000, explained Bloomberg.

In addition, said Bloomberg, shareholders claimed that Visteon had no chance to be profitable, and did not disclose that it was adversely affected by losing businesses inherited from Ford, price reductions promised to its former parent company, and high labor costs.

U.S. District Judge Robert H. Cleland, however, ruled there was no evidence that the company withheld information from investors, according to the report. “It is clear from numerous publications, both appearing in market analyst reports and in Visteon’s spinoff prospectus that the market was made aware of Visteon’s various deficiencies as an independent company,” Cleland reportedly wrote.

Visteon spokeswoman Kimberley Goode told the wire service: “We’re very pleased with the judge’s decision.” Bloomberg also pointed out that shareholders alleged that the company and four executives deceived them by issuing false financial statements.

The four executives sued were former CFO Daniel Coulson, current CFO James Palmer, former chairman Peter Pestillo, and current chairman and CEO Michael Johnston. The judge also dismissed claims against Visteon’s auditor, PricewaterhouseCoopers LLP.