Trex Company Settles Class Action Lawsuit
31 Juillet 2009 - 9:29PM
Business Wire
Trex Company, Inc. (NYSE: TWP), the nation’s leading
manufacturer and distributor of wood alternative decking, railing,
fencing and trim, announced today that it has entered into a
Settlement Agreement that will resolve a class action suit filed in
California by a group of plaintiffs’ class action law firms
alleging certain product defects. The settlement was preliminarily
approved by the U.S. District Court for the Northern District of
California on July 30, 2009. The Court has set a hearing for final
approval on October 30, 2009.
In this suit, two customers of Trex decking product alleged that
their decks suffered from surface flaking and that Trex failed to
provide adequate remedies. In 2007, Trex fully and publicly
disclosed that a manufacturing problem affected a small percentage
of product manufactured in its Fernley, Nevada plant beginning in
2003. This issue was entirely isolated to parts of the West Coast,
only affected a small percentage of Trex decking materials produced
in the Nevada plant, and has since been remediated.
Under the settlement, Trex will continue to fully honor its
warranty by replacing product, and also will provide partial
reimbursement of labor expenses to affected consumers, the amount
of which will be dependent on the size of the deck. The claim
resolution process is described in the Settlement Agreement and
class notice.
Ronald Kaplan, president and CEO of Trex Company, stated, “Our
decision to settle the case is not an admission of any of the
allegations made by the plaintiffs but rather a way to avoid
expensive and time-consuming litigation. Trex has steadfastly stood
behind our warranty with respect to all affected product. Although
we were fully prepared to defend this action and we strongly
believe we would have prevailed, we were offered the opportunity to
settle on terms that we feel are a win-win for both Trex and our
consumers.”
Mr. Kaplan added, “Trex always has prided itself on customer
service. Although the product defect only affected a small
percentage of our product, we regret when any Trex customer has a
less than fully satisfactory experience with our product. We
believe that under these circumstances, providing partial labor
reimbursement and going above and beyond our warranty obligations
is a fair and reasonable settlement of this lawsuit. This
settlement will allow our company to quickly and efficiently remove
this distraction and continue to focus on delivering our
award-winning products and high-quality service to our
customers.”
Jonathan D. Selbin, a partner at Lieff, Cabraser, Heimann &
Bernstein, LLP, one of the co-lead counsel for the plaintiffs,
stated, "We commend Trex for stepping up to the plate and resolving
the surface flaking dispute."
About Trex Company
Trex Company is the nation’s largest manufacturer of composite
decking, railing, fencing and trim, with over 15 years of product
experience. Built on “green” principles and values, Trex makes its
products from a unique formulation of reclaimed wood and plastic,
combined through a proprietary process. Trex decking, railing,
fencing and trim offer significant design flexibility with fewer
ongoing maintenance requirements than wood, as well as a truly
environmentally responsible choice. In addition, Trex distributes
ultra-low maintenance PVC decking under the trademark Trex Escapes®
and PVC trim under the trademark Trex Trim™. For more information,
visit the Company’s website, www.trex.com. Trex®, Trex Escapes® and
Trex Trim™ are trademarks of Trex Company, Inc., Winchester,
Va.
The statements in this press release regarding the Company's
expected future performance and condition and its business strategy
constitute "forward-looking statements" within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the
Securities Exchange Act of 1934. These statements are subject to
risks and uncertainties that could cause the Company's actual
operating results to differ materially. Such risks and
uncertainties include the extent of market acceptance of the
Company's products; the sensitivity of the Company's business to
general economic conditions; the Company's ability to obtain raw
materials at acceptable prices; the Company's ability to maintain
product quality and product performance at an acceptable cost; the
level of expenses associated with product replacement and consumer
relations expenses related to product quality; and the highly
competitive markets in which the Company operates. The Company's
report on Form 10-K filed with the Securities and Exchange
Commission on March 12, 2009 and its subsequent report on Form 10-Q
filed on May 8, 2009 discuss some of the important factors that
could cause the Company's actual results to differ materially from
those expressed or implied in these forward-looking statements. The
Company expressly disclaims any obligation to update or revise
publicly any forward-looking statements, whether as a result of new
information, future events or otherwise.
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