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Warnaco faces more suits
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May 18, 2001: 8:09 p.m. ET
Fruit of the Loom sues for licensing agreement; investors want more info
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NEW YORK (CNNfn) - Fruit of the Loom Ltd. has sued embattled apparel maker Warnaco Group Inc. for allegedly breaking a licensing agreement to produce and sell underwear, or to pay $2.3 million in back royalties, according to court documents obtained on Friday.
In court papers filed on Wednesday, Fruit of the Loom also said Warnaco failed to pay for advertising support or keep and provide accurate financial records in the 11-year-old licensing pact.
Warnaco (WAC: up $0.04 to $0.71, Research, Estimates) does not comment on pending litigation, a spokesman for the company said Friday. The lawsuit was filed in U.S. Bankruptcy Court in Delaware Wednesday.
Separately, the apparel company was slammed with a shareholder lawsuit alleging management concealed certain financial information.
The suit alleged the defendants issued false and misleading statements about the company's operations and financial performance and the effect undisclosed conditions would continue to have on the company.
Shares of Warnaco have plunged from a high of $30.56 last May and were trading at 73 cents Friday on the New York Stock Exchange. The apparel maker blamed weak retail conditions for a much wider-than-expected fourth-quarter loss in March.
Warnaco Chief Executive Linda Wachner faced angry shareholders at the company's annual meeting in New York.
Although there was no mention of the Fruit of the Loom lawsuit, shareholders complained about the company's debt burden, Wachner's compensation and the stock's dismal performance of the last two years, among other things.
Wachner was straight-faced throughout, as a few shareholders resorted to name-calling, interrupting and applauded one man's suggestion that she be replaced.
Calvin Klein and Warnaco settled a trademark dispute in January, minutes before jury selection was to start in a battle over the sale of designer jeans to discount warehouse clubs.
Fruit of the Loom said it sought to end the pact in April, but Warnaco, which makes and sells Calvin Klein jeans and Speedo swimwear as well, has not stopped producing and selling the products.
- from staff and wire reports 
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