Dallas, TX: (Mar-20-08) A class action securities lawsuit was brought against Mannatech Inc., a nutritional supplements maker, naming the company, and some of its officers and directors as defendants, in August and September 2005. The class is comprised of those who bought Mannatech stock between Aug.10, 2004, and Jul. 30, 2007. The suits, filed by shareholders stemmed from a May 2005 Barron's article, which questioned the legitimacy of some of Mannatech's business practices. The suits accused the company of failing to adequately supervise its sales staff and allowing false claims to be made about the effectiveness of its products.
As part of a settlement reached, sources on both sides stated that the class action dispute will be resolved with an $11.25 million payout by the company. Mannatech, based in Coppell, stated that it agreed to settle, so as to avoid the costs and risks of litigation. It did not admit any liability or wrongdoing. Officials claimed that barring any unusual developments, Mannatech said it expects the approval process for the settlement will be completed within four to six months. According to company sources, the deal will be funded by both the company's insurer and the company itself. [
